DAVE KORP
Variety of tasks

When Arlington-based Leader Bank first opened two-and-a-half years ago, the idea was to serve communities and woo customers caught in a wave of bank mergers and acquisitions. In the wake of almost any big bank merger, there are dissatisfied customers who open accounts at community banks as a result. Now, however, it’s not just customers shed during mergers that is helping Leader to expand and open a second branch, but skilled bank employees.

Approximately half of Leader Bank’s staff is comprised of employees that migrated from banks that merged or were acquired by another bank in recent years. They have filled both senior- and junior-level positions at Leader.

“This starter bank has had 50 percent of its employees come in out of a merger with a wealth of experience and knowledge,” said Sushil Tuli, president and chief executive officer of Leader Bank, a $140 million institution that opened its second branch in September.

Tuli said he does not intentionally seek out employees from among those involved in bank mergers and acquisitions.

“My idea is to find the most qualified person,” Tuli said.

He said bankers exiting an acquired bank tend to look for a few things in a new institution, like stability. Tuli, who has owned the bank’s sister operation, Leader Mortgage, since 1986, said he has had opportunities to sell the company, but has chosen not to do so.

“They [prospective employees] look at my track record,” Tuli said. “They see stability in my style,”

Dave Korp, operations manager at Leader Bank, previously worked at Medford Bank for a decade as the senior vice president of operations. Korp was in charge of deposit operations, systems and security and was the main liaison between the bank and the bank’s data processor.

The bank was sold to Citizens Bank in 2002 and Korp stayed on.

“I was there during the conversion,” said Korp, who acted as main liaison between Citizens Bank and Medford Bank.

But he did not want to stay with the larger, Providence, R.I.-based bank. Korp said he had seen how larger banks operated and feared he would be “pigeonholed” into one area.

“You had an area of expertise [at Citizens] and I like to do different things,” said Korp, an opportunity – or necessity – for most bankers at community institutions.

At Leader Bank, Korp’s duties have included helping move the bank’s corporate headquarters and working with vendors to set up the newest branch in Arlington Center.

Korp said he decided he no longer wanted to work for an institution that was large enough to be a prime candidate to be sold in the future.

‘Interesting Challenges’

Kevin Handly, a bank attorney and partner at Boston-based Goulston & Storrs, said the recent increase in bank mergers has had an impact on the banking industry.

“The wave of consolidation had huge side effects,” said Handly.

Handly said not all the movement of bank personnel following a merger is voluntary. But whether choosing to leave or being laid off, bank employees who leave tend to describe themselves as “victims” of a merger.

However, that is sometimes good news for community banks that are seeking talented banking professionals.

“It does provide for broad distribution of experienced banking talent,” said Handly.

Brian Taylor, chief financial officer at Leader Bank, also experienced a merger in his banking career. Taylor worked at MetroWest Bank for five years until Portland, Maine-based Banknorth purchased the institution and planned to move its operations north. Taylor said he had no plans to move so he began a new job search.

“[Leader Bank] was a startup bank,” Taylor said. “That creates some interesting challenges.”

As Leader Bank developed and its needs increased, Taylor said he had his eyes on two employees from his former bank that later joined Leader Bank.

Handly said many times, bankers will come from a larger bank and secure a higher position at a community bank. Those in middle management at larger banks will migrate to other banks and may become bank presidents.

Taylor said he appreciates Leader Bank’s “old-style savings bank” approach to doing business, saying branch managers know their customers well.

Branch Manager Marc Sannizzaro, who spent eight years at Cambridgeport Bank, heads Leader Bank’s newest branch located at 449 Massachusetts Ave. in Arlington. Sannizzaro worked his way through the ranks beginning as a teller and was an acting branch manager when Citizens Bank acquired Cambridgeport in August 2003. He stayed on until December that year. During his time at Cambridgeport, Sannizzaro said the bank had grown from four branches to 11.

“It was a small neighborhood bank and it was a nice place to work,” he said.

Sannizzaro said despite the merger and his frustrations with certain aspects of a becoming a larger bank, he was content.

“I was in a good branch for Citizens,” said Sannizzaro, adding that revenues were good and goals were met.

But Sannizzaro said he enjoyed certain qualities of a community bank better.

“It is so much easier Â… at a small bank [to] make decisions at a local level,” said Sannizzaro.

When Sannizzaro heard Leader Bank was looking for new employees, he met with Tuli, who he described as “sincere and genuine.”

“I was really interviewing him,” Sannizzaro said. “I wanted to know the plans for the bank.”

When Sannizzaro came to Leader, he brought two bank tellers with him. Since opening the new branch in September, Sannizzaro has established 70 accounts as part of a kid’s bank club.

The new branch has a base that has grown to just over $5 million since its opening in September. Sannizzaro said the growth has occurred because some customers have followed him and his tellers to Leader Bank.

Korp and Sannizzaro said they are not the only ones who have moved from an acquired bank to a community bank.

“I’ve seen people move to other organizations,” said Korp.

Korp said he knows people who have gone to banks that were similar in size to Medford Bank. But he has heard others say they want to work at a small or mutual bank.

Sannizzaro said he has heard from people in the local banking industry that are looking for positions at community institutions, like Leader Bank.

Handly said he expects the wave of consolidation to continue and bank employees will continue to migrate to different institutions as banks merge.

“Consolidation and migration is thought to be healthy [in the banking industry],” said Handly.

This is one reason it is rare that banks have employment agreements with their staff, Handly said.

He also predicted that even smaller banks will merge because they may lack sufficient management talent. Handly said community banks sometimes have difficulty paying qualified executives. If two banks merge, they can acquire a more complete team and achieve sufficient size to maintain a strong contingent of managers.

In other instances, mergers may take place even with a full management team, which usually results in layoffs, Handly said.

“Part of the motivation for bank mergers is expense cutting,” Handly said.

Banks often do not cut expenses unless they cut personnel. Handly said if banks do not cut employees, the result can be a “bloated bank.”

When layoffs occur, Handly said there is less fear that bank executives won’t find a job at another bank.

“It makes it easy to make cutbacks that business requires if you know executives can get a job elsewhere,” Handly said.

Jennifer Jope may be reached at jjope@thewarrengroup.com.