James Lavoie, president and CEO of Middlesex Savings Bank, is pictured inside the bank’s new Boxboro branch.

Boxboro, a tiny rural town about 30 miles from Boston, had one bank. Citizens Bank closed its Boxboro branch last September, leaving the space on Massachusetts Avenue vacant and the community bereft of a bank until last week when Middlesex Savings Bank filled the void.

Across the commonwealth there are more than 80 municipalities that do not have a bank. Most of the communities without banks also get by without credit unions as well.

Town’s such as Boxboro do not have large populations or a lot of retail opportunities, making them less attractive for financial institutions to move into, said James Briad, director of marketing and senior vice president of Middlesex Savings Bank.

But Framingham-based Middlesex already had a strong customer base in the little town, which has a population of just under 5,000 according to the 2000 U.S. Census, and so took advantage of the larger bank leaving.

“We look for opportunities where we can be the dominant player in the town. Since we are so deep in Acton (the next town over), it didn’t make sense to leave Boxboro untouched,” said Briad. “We’ve been hearing ‘we would love to have you here.’ Until recently you [customers in Boxboro] had to drive a little further.”

Retaining a bank within the community’s borders is critical to Boxboro’s plan to create a real downtown, said Selectman’s Chairman Simon C. Bunyard. Though the concept and zoning are in place, the actual creation of a town center is still a ways off. He said he did not want to see the town miss out on having a local financial institution to anchor the process.

“I always hoped that another bank would come in here. Certainly, we need a bank in this community,” said Bunyard.

According to James Lavoie, president and CEO of Middlesex Savings, the bank already has business from 37 percent of the households and 47 percent of the businesses in town.

He said the branch should do well given the bank was already a household name in the community. The ice skating rink Zamboni has the bank’s name and logo on it, as does the scoreboard at the regional high school.

Briad said when larger banks consolidate or buy up some of the smaller players, they sometimes decide to close branches in smaller communities. Places from which larger banks might shy away, though, can be key growth spots for smaller banks.

“It’s an opportunity for a community bank to fill a niche,” Briad said.

He said the business model for Middlesex is to be the leading bank in a few towns rather than just another bank among many in larger municipalities. Still, Middlesex has become quite a large community bank pursuing this strategy, with assets of about $3 billion. The business model has helped the bank to grow in a stable and solid way. Briad said Middlesex is the No. 1 bank in 13 of the 19 towns in which it has branches.

Jim Jones, of First Wellesley Consulting, said towns and cities usually have something that draws banks in, such as a thriving business community or large population. He said every branch needs to do a certain amount of business in order to work. And bank leaders analyze the competitiveness of the area. However, up-and-coming towns are the perfect bait for new bank branches. He said people should watch the several dozen Bay State towns without banks and predicts many are not likely to remain that way.

“People are living further and further away from Boston. Rural towns are becoming high-growth areas,” he said. “Banks will [open branches in the untouched towns] if they have enough people to justify the investment,” said Jones. “The town has to have enough residents and business owners.”

Jones said as more and more people move away from city life due to housing costs and family situations, more businesses will also move into these rural areas. He said for every strip mall that is built, a bank will consider moving in.

“I see it as steady progress over the next decade,” he said.

Jones predicts about half of the municipalities in the commonwealth without banks will have at least a branch in the next 10 years, an many other will be served by a credit union. He said between 20 and 30 towns might still have nothing.

“This is simply an ongoing trend dictated by population growth,” said Jones.

But some small towns with very low populations already have more than one bank and have for years. Jones said that it depends on the history of individual communities since some smaller towns may have established cooperative banks decades ago when it was easier to create new banks.

‘Financial Decision’
According to a recent report released by the Federal Deposit Insurance Corp., banks in Massachusetts have been adding branches at a quicker rate than the national average. Over the past five years the total number of bank branches has increased by 8.1 percent. The national average for branch expansions is 7.7 percent and the regional is 4.6 percent.

Throughout the county, new branches tend to emerge where there is population growth, said Paul Driscoll, regional manager for the FDIC’s Division of Insurance and Research in Braintree, who helped to compile branch expansion data in Massachusetts. His research shows that fewer people are being served by each branch, and that the pace of branch expansion is not likely sustainable in the future.

But even with more bank branches popping up in the state, there are some areas that remain untouched.

“The banking business is like any other retail business. The experts in the business, they try to locate where there are more people and less competition,” said Massachusetts Bankers Association spokesman Bruce Spitzer.

Ken Cole, president and CEO of Milford National Bank and Trust Co., was not the first to bring a bank to Hopkinton, but he was the first to but one on the west side of town, which is an industrial area. While other banks gravitated to the town’s center, Cole saw opportunity elsewhere. The process took a few years and required some zoning relief, but last week, the new office opened on South Street. And just to make sure the new establishment attracts customers, Milford National has partnered with Dunkin’ Donuts and the two companies share a joint space.

Cole said he hopes the foot traffic from the coffee crowd will also attract new bank customers. After all, it is the only Dunkin’ Donuts in town and in an area that has several office buildings.

Driscoll said all banking professionals need to ask themselves an important question when planning expansions: “The question is who would come to the branch,” he said. “It’s a financial decision.”