Following a two-year campaign to obtain a federal charter, Leader Bank celebrated the opening of its branch at 141 Massachusetts Ave. in Arlington last week.

Count the executives of recent start-up Leader Bank among those who believe the spate of mergers and acquisitions in the industry have opened new niches for financial services at the community level.

But while the opportunity may be there, building a new customer base is a challenge for any de novo bank.

Based in Arlington, Leader Bank celebrated its public grand opening on Tuesday, although the bank already has been open for some weeks. Led by Chairman and Chief Executive Officer Sushil Tuli, the bank, located at 141 Massachusetts Ave., hopes to make its mark by providing personalized customer service combined with competitive banking products.

Tuli, also chairman of Leader Mortgage in Arlington, said he decided to open Leader Bank after being approached by a number of customers about their desire for a community bank following the absorption of many local banks by larger institutions. The bank, which had its soft opening earlier in May, has opened more than 50 bank accounts for new customers.

“My goal is to provide quality services and products to customers with small business, large business, and personal needs while slowly growing the bank to profit over time for our shareholders,” said Tuli. The bank has 85 shareholders and eight full-time employees.

As the bank grows, Tuli said he hopes to open additional branches throughout the area.

Tuli said he hopes to accomplish those goals and lure customers to Leader Bank through a variety of methods, including lower fee structures and loan rates.

“Since we’re a smaller community bank and our overhead is lower, we can pass on all of those savings to our customers through lower loan and mortgage rates and higher interest rate returns on deposits than our competition,” said Tuli.

Additionally, Tuli said that personalized customer service will be the highest priority at the new bank and that customers who call during business hours will speak with a live person as opposed to being queued through an automated answering menu.

Tuli plans to institute a number of programs, including “workplace banking,” where employees at participating companies will receive fee-free checking accounts and the option of direct deposit of their paychecks. Other benefits of “workplace banking,” said Tuli, will include preferred rates on savings and consumer loans as well as overdraft protection on checking accounts.

Another bank program will help apartment building managers avoid the aggravation of collecting rents and completing monthly paperwork. Participating tenants will be given the choice of having their rent deducted from their bank accounts each month.

Tuli, who immigrated from India and began his banking career more than 25 years ago, first developed the idea for a new bank in 1994 when community banks in the surrounding area were either closing down or being absorbed by larger banks. He received verbal approval for a national bank charter from the Office of the Comptroller of Currency last February and completed his $6.5 million fund-raising campaign for opening the bank last December.

Table Talk

Steven Kane, co-founder and chief executive officer of Revahertz Networks in Boston, was initially approached as an investor for the bank. Kane said he decided to join Leader Bank’s board of directors because he was intrigued and enthusiastic about the idea of fulfilling Tuli’s vision for a new community bank in Arlington.

“We want to be a real success business for ourselves and for the community because the bank should really be a fundamental asset to the community,” said Kane.

Kane added that as a member of the board of directors, he sees his job as one with meticulous responsibilities, helping to manage the bank both ambitiously and carefully.

Tuli said that despite the country’s economic recession, he believes now is the perfect time to introduce a new bank.

“It’s a great time because interest rates are lower and consolidated banks are growing more and more, so people are feeling that there really should be a local bank,” said Tuli.

Anil Mehrotra, president of Exel Management in Hanover, said opening his business and personal banking accounts at Leader Bank was a natural step since his company’s mortgage is held by Leader Mortgage and he already had an established relationship with Tuli.

“It’s easier for a person with a small business to go to a smaller bank where you know someone who will sit down with you across a table and answer your questions,” said Mehrotra. “Bigger banks are too much of a hierarchy and aren’t always better. People like me are often ignored.”

Edwin Whittemore, an attorney with his own law offices in Arlington and Concord, said that being able to talk with a real person on the phone is one of the most appealing aspects of Leader Bank.

“The personal touch of taking the time to know their customers and answer their questions is the biggest difference from other banks,” said Whittemore. “Also, I feel like small banks tend to hold their employees longer, so you’re not always dealing with different people every time you call or go to the bank.”

Whittemore said the proximity of Leader Bank to his offices also attracted him as a customer.

If Tuli’s vision about the way a community bank should be run is followed, said Kane, then customers will be happy and the bank will achieve its goals.

“Our goal should be to provide products and services that can make local customers feel good and that they have an ally at the bank,” said Kane. “If we do that, we will be successful.”

Leader Bank Marks Opening, Ready to Build Customer Base

by Banker & Tradesman time to read: 4 min
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