Title: Former Executive Vice President, Bank of New England and President, Middlesex Bank
Industry experience: 40 years
During his four-decade career in Greater Boston’s banking industry, C. Bernard “Bernie” Fulp saw a lot of “firsts,” including the 1968 launch of Unity Bank & Trust, Boston’s first primarily Black-owned and -managed bank and a predecessor of today’s OneUnited Bank.
A native of Winston-Salem, North Carolina, Fulp started his banking career in the mid-1960s at Wachovia Bank. At a branch staffed by African Americans, the bank saw opportunities to offer more lending products to the community. Former classmates from Winston-Salem State University recommended Fulp to manage the lending function, which included going through Wachovia’s management trainee program. Fulp said he did not get to rotate through all the departments like the program’s white participants, concentrating instead on lending for a few months before being assigned to a branch.
This interview has been edited for length. A full version of Banker & Tradesman’s conversation with Fulp can be found at bankerandtradesman.com.
Q: How did you end up in the Boston area?
A: I had gone to University of Connecticut for graduate work. I attended a banking conference in Boston and had contacted another former employee of Wachovia, Betty Cook. She told me that State Street was interested in the possibility of bringing on someone with loan training. She introduced me to someone from the [human resources] department, who liked my training and my approach and thought I would be a good fit for their executive management training program at State Street. It was a clear path to an officer position, and it paid substantially more money. I took the opportunity and went to work for State Street, and I actually became their first Black officer, elected by the board of directors in November 1967. When I was made an officer, it didn’t make a big splash in Downtown Boston, but it made a big splash in the African American communities in Boston.
Q: How did you get involved with Unity Bank?
A: Unity came to my attention while I was at State Street via several phone calls, including one from John Seiler from the Harvard Business School. Unity was the idea originally of a graduate student at Harvard Business School, John Hayden, who thought that a bank serving the inner-city communities of Boston and providing some cash flow in the neighborhood was a time that had come. He wrote his thesis about starting a bank in the Black community owned and managed primarily by Blacks. The thesis, I believe, was spot on. I still believe that to be the case today.
I joined the bank, and there were some issues early on that came up in running the bank. The issues centered a lot on disagreements between directors from the community and some of the professionals, including people from Harvard Business School. I have described in the past that it ultimately became “Harvard versus the ’hood.”
Starting a bank, at least in terms of creating the idea and getting enthusiasm, is a different skill base than making the regulators happy and making good loans and operating according to the rules of the game. The Harvard guys wanted to bring policies and practices and learnings from the business school, and the community people said, “You’re acting just like the other banks, and we don’t see things quite that way.” And this gap didn’t close. After a couple of years, I didn’t see being reconciled with the people who didn’t see eye-to-eye with the regulators, and I took a position with New England Merchants Bank.
I believed then and I believe now that the inner-city market in Boston is a good banking market. I think the entrance of Chase into that market pretty much proves that is true. That’s a long way from the way things were in the ’60s. It doesn’t provide the ownership or management originally proposed in John Hayden’s thesis, but the delivery of services and, hopefully, significant improvements in lending will now continue to grow and change ownership in the inner city.
Q: What was what was your experience like at New England Merchants National Bank and Bank of New England?
A: That was a long banking experience. I joined in October of 1970. New England Merchants – this is long before the merger that created Bank of New England – was a fascinating financial institution. I did well in the small business lending function. My opportunities at New England Merchants continued to grow. I had done well and eventually ended up rotating through all of the branch system. I was now vice president and looking to move into upper management at the bank.
This presented a hurdle.
As some people saw it, they thought that I had done quite well and risen quite high in the organization, and there were mumblings. I had a colleague in HR that said, “We think that sending you to the Harvard Business School to one of the executive programs is what the bank should do at this point.” After some wrangling and questioning, they finally decided to sponsor me into one of the programs at the Harvard Business School that grants you alumni status. When I returned to New England Merchants, not too long after, I got a call around 1:30 in the afternoon saying that the chairman of the board would like to meet me in his office at 4:30 that afternoon. This is a Friday.
So, I went up to his office and after the usual pleasantries, he asked the president to join us. He said, “We’re making further changes in the bank because of deregulation, and we want you to be a part of those changes. We know you’ve been happy on the lending side of the bank; you’ve done well and we know your reputation on that. But this bank needs to diversify and expand its retail and small business deposit base.”
Of course, I took it.
Q: What did that role involve?
A: I became the head of retail banking, and this entailed the branches, the ATMs, the money center. Some of the other big banks had gotten in trouble because of having too high a concentration of loans with a few large depositors, which was very similar to the case at our bank. They said they needed to expand and diversify the deposit base in the bank, and they wanted to double the size of the deposit base in four years without increasing the noninterest cost of funds.
It turned out to be a very good, very exciting assignment for me. We accomplished that goal and exceeded it. This was a period where the regulators in Washington were deregulating interest rates on deposits, and so low-cost deposits had a much greater value to the bank than previously, and it also increased competition. No longer could you simply win by having bricks and mortar and passively wait for people to walk in the door. I actually ended up engaging an outside firm to come in with sales training programs and we taught people on the retail side of the bank that you will be [both] bankers and salespersons. There had to be a shift from passive order takers to saying this is how our products will benefit you and to assertively looking at new business.
I did very well at that. I was at Merchants for the longest period of my banking career. My performance there probably ended up being the greatest contribution to confidence that later on I would be able to run a small institution on my own. It also got me the opportunity to be [an executive vice president], the first Black EVP at that bank.
Q: How did the opportunity come about to start your own bank?
A: It goes back to New England Merchants. The management group that I ran when we were in retail banking was a very good group. During the five or six years that we were competing with the giants around town – Bank of Boston, Bay Bank, State Street – we did very well. We became confident that we could compete, and we could run an institution. We eventually settled on Newton because Newton at that time had no commercial banks headquartered within its boundary. I saw that as an opportunity. I presented the business plan to a professor at the Harvard Business School, Jim Cash. He is also African American. He said, “I think it’s a very well-crafted business plan. I have two concerns.” He said the plan is a little bit thin on technology. There was a pause and I said, “What’s the second one?” And his response was: “Bernie, there will be a cataclysmic” – and I will never forget that word – “a cataclysmic reaction to you opening a bank in Newton.” I understood what he was saying. It turned out he was right. I had regulatory approvals, the management skills to run a bank of this size, good wishes from the mayor and the governor of the commonwealth, but there were people who said they weren’t sure that I should be president of the bank. That sort of innuendo was harmful.
The process of founding Middlesex Bank I found to be easier from the point of view of writing the business plan, getting the approvals of the banking commissioner and the FDIC. Those things were not easy, but they were not as hard as raising the capital to begin operations. The bank opened on June 2, 1997. The company that had capitalized the bank saw a business opportunity, and they took it. That placed me and the bank in the position of looking for capital once again. The bank had other changes in ownership after that and was acquired by Eastern Bank. Altogether I was involved with Middlesex Bank for seven years.