Carol A. Hamilton  
Title: First Vice President, Asset-Based Lending, Rockland Trust    
Age: 61
Experience: 40 years total, 30 in banking   

The phrase “work ethic” almost isn’t sufficient to describe Carol Hamilton’s career trajectory. The Revere native admits that she got the lowest possible score on her SATs, but eventually graduated magna cum laude with a distinction in sociology. After a few years working for then-Boston Mayor Kevin White and later the state on juvenile delinquency prevention programs, Hamilton decided to pursue an MBA and was recruited into BayBank’s loan officer development program. Since then, she’s accumulated several decades of experience lending to businesses in the Boston and Providence markets, and she’s also cultivated a specialty in lending to agricultural businesses.

Q: How has business changed during this most recent recovery?

A: I think there has been an intrinsic change in the way we do business. We have low inflation, low rates, but you still have pressure on costs. Right now what’s going on, is a lot of people got hit on revenue, but the worst part is, we are sort of in a recovery, revenues are somewhat returning, but margins … have not returned.

What’s happened with this recession is there has been a change in how people have to operate their business to make money. I’ll give you an example: if you want to supply a [big-box retailer], you have to be able to operate under their terms. Usually when supply goes down, price goes up. During this recession, demand and price went down … people stopped shelving or storing product, so now a lot of the large buyers started slowing how much they keep on hand, just in time. That to me is an intrinsic change in business.

Q: What does all of that mean for you as a lender?

A: For lenders, the implication is we have a tougher time assessing what the challenges are for that business for us to make a lending decision so we have to get smarter, do more due diligence, more work.
I think banks, because we risk rate on people based on performance, we tend to make people try to make money in the short term because we want them to cover their covenants. But I think what would be better would be when people look forward long enough … and little companies never did this before – tell us what you think you’re going to do. Because we need to understand, can they achieve that?

Banks are not patient money, so that’s one part of it. The other part is, I think we have to get more creative, or we have to have customers get more creative, so maybe the banks do a lesser amount of money and we might want to direct people to other sources that help them achieve what they need to do. You hear of patient money, sub-debt, maybe share the money. I think that’s one thing that will probably change. Even though we’re crazy-competitive on rates, I don’t think we’re crazy on how much we lend.

Q: Among other things, you specialize in lending to agricultural businesses. Can you tell me about some of the trends you’re seeing in that space?

A: You know, commercial banks in Massachusetts, we don’t have a great big farming community. We do have some, but historically, about two-thirds of the lending for agriculture comes from the farm credit system.
When you do agricultural deals, and this is where I think it’s difficult for commercial banks, there’s a lot of risk. There are inherent risks. You have volatile pricing because you never know what Mother Nature’s going to do with crops or with animals. You have things that are outside your control and not just normal competition.

And when you have unknown pricing … you still have rising costs because whether you’re agricultural, commercial or industrial, you still have to run your business. I think for agricultural deals, because it’s considered so much higher risk, most commercial banks have shied away.

Commercial banks will do it, but only when they understand it or they’ve known somebody a long time. That gives you some kind of balance for the risk because it’s still banking and it’s still competitive. It’s not an easy industry. I think some banks would never touch it.
I would also say in order for banks to do it, we probably would look for enhancements or partners. Some banks want to do the whole deal and that makes it harder to compete.

If you only have to do a piece of it, now there’s a higher interest to do it. You’re going to share them, you’re going to indulge in that industry knowledge, and last you look for enhancements because the risks are just so high right now given this last recession and that point I told you about the margins. Just like everybody else, they have the same issue. Costs are really hard to control and profit margins are still squeezed everywhere.

Hamilton’s Top Five Priorities:

1. I really want to travel more.
2. I work out like a fiend, four or five times a week.
3. I love doing new things. I started tennis lessons this summer. Scuba diving is also on the list.
4. Encourage my sons to be more independent – and good men.
5. I now only do things I like. It sounds funny, but we don’t always do what’s best for us. I move on when it’s the right thing to do, and I stay focused on things that are good for me.