Photo courtesy of First County Bank

Nitin Mhatre
CEO
Age: 51
Industry experience: 31 years

First County Bank recently celebrated its 175th anniversary and the bank remains committed to serving customers in Fairfield County. Now, under a new CEO, it’s looking to its next years ahead.

While the bank now has over $2 billion in deposits, the large majority of bank employees reside in the community and all the bank’s branches are located in the county. Additionally, nearly 85 percent of the bank’s organic deposits reside in Fairfield County.

The bank has grown with the local economy and is committed to mutuality and serving Fairfield County residents. Additionally, the bank is embracing its local ties while also looking to compete with large institutions when it comes to the digital experience and technology,

Q: The bank has grown a lot over the course of 175 years with assets currently at $2.3 billion. How has the bank been able to remain a pillar of Fairfield County while still being able to grow deposits and gain new customers?
A: We have really grown with Fairfield County and not away from it. 100 percent of our branches are in Fairfield County, and I believe over 95 percent of our employees reside within or around Fairfield County. That makes us hyperlocal-focused, right? Our growth has been truly tied to the county, and even while we’ve expanded our capabilities and products and solutions and technology, we truly are locally governed, locally managed and focused on the needs of the local communities. Almost 85 percent of our organic deposits are from this county, and we commensurately lend in this market as well. We are a bank of Fairfield County and Connecticut broadly, and yes, we will serve clients when they move around the country but I think the core focus remains in Fairfield County. We have 13 branches, all of them in Fairfield County. Always remaining focused on what’s good for Fairfield County, that comes first, and being locally governed, locally managed, having bankers who understand the markets well, the [know] clients well and know them for generations. All of that has kept us focused on the core market, which is Fairfield County.

Q: How does the focus on Fairfield County allow for the bank to stand out among competitors?
A: The simplest way I can explain is what I call “digi-touch,” which is our approach to this. What I mean by that is the “digi” part is creating the exceptional digital experience that the clients expect because that’s what they get from the JPMorgans and Bank of Americas of the world. With the technology becoming so democratized, we have access to it, and we’re leveraging that technology to create an exceptional digital experience. It’s a journey, it’s going to be an ongoing process but we believe we can compete with the largest of banks providing the best possible digital experience.

What we also offer along with it is a personal touch of a local community bank. So when you combine the two, that’s not something the large banks can offer. They could have a good digital experience, but they don’t have the locality and the local connectivity that we have. That “digi-touch” approach absolutely helps us.

We’re also heavily focusing on small businesses, which is another area where most of the small businesses don’t get served by the medium- or large-sized banks because they are not big enough for those banks.

The third part is we have a wealth management business that provides traditional advisory business and retirement planning and trust and estate planning, all of which is available at the large banks, but you need to have thresholds. It could be $20 million at minimum whereas we are able to do that at much lower thresholds. It could be as small as $100,000. That’s a typical average resident, and we’re able to provide those services to them.

Q: How does the bank view mutuality and how does it go hand in hand with a continued growth strategy?
A: Since 1851, we have stayed mutual. We’ve operated without shareholders since our founding. We are not beholden to shareholders. The previous three banks that I ran, they were public companies, and nothing wrong with being a public company. What that means is, anywhere between 30 percent to sometimes 90 percent or more of your profits get plowed back to the shareholders. As a mutual, you absolutely don’t have to do that because there is no shareholder. You can plow those back into your customers, your communities, and the bankers who support those customers and communities. That’s a huge advantage being a mutual.

The other thing it does is it just provides that clarity of purpose. We are not working for shareholders. We are working for our customers and communities. We’re working for the long-term good. I don’t have shareholders and analysts and investors and activists breathing down your neck every quarter saying ‘Hey, show us the money’. This is a long-term franchise that is committed to serve the communities for a long time, and that allows us to know manage through every economic cycle and changing regulations and all of the advances that are happening in technology and client expectations. At a high level, mutuality really gives us the freedom to take a long-term view and invest in technology and strengthen the bank and serve our customers without being driven by short-term shareholder pressure, so I think that’s a huge advantage. I have zero desire to turn this into a public institution. I like the model; it works for us. Our clients love us for it so there’s no reason for me to change that.

Q: Where can these funds that would go to shareholders be reinvested into the bank?
A: I think a big part of it will be in technology, and that is supposed to improve the client experience because client expectations are changing. They are just changing not from their bank, but from every experience they have. Whether it’s Amazon or Netflix or Apple, they are resetting the bar on expectations. Expectations are rising every day, and technology allows us to deliver those. The second part of the investment in technology is to improve the employee experience who are either serving the customers directly or serving internal customers. We’re investing in that. We just hired a head of data and AI. We hired a head of client experience. We hired a head of digital marketing in the last two months. For that reason, to elevate our experience and delivery to our clients. The majority of the investments will go into technology, employees, and marketing. That’s where the money that I would have to give back to the shareholders through dividends or buybacks are going to get reinvested into those categories: bankers, customers, communities, technology.

Mhatre’s Five Favorite Podcasts

1. Harvard Business Review’s “Ideacast”
2. Backbase’s “Banking Reinvented”
3. Shankar Vedantam’s “Hidden Brain”
4. Steven Bartlett’s “Diary of a CEO”
5. McKinsey & Company’s “The McKinsey Podcast”