Jeff Sattler, president of Nuvo Bank in Springfield, has spent his entire career in banking. Immediately after graduating from college, he entered the management training program at Third National Bank. Since then, he’s worked for some of the biggest names in the business. But in 2006, he started his own bank. Earlier this year, Springfield-based Nuvo Bank turned its first quarterly profit, and its brisk revenue growth has caught the attention of the Western Massachusetts business community. Sattler spoke to Banker & Tradesman about the founding of the bank, the challenges facing the industry and the region, and technology’s role in banking.

Jeff Sattler

Title: President, Nuvo Bank; Springfield

Age: 53

Experience: 27 years in banking, 5 years at Nuvo Bank.

What gave you the idea to start Nuvo Bank?

About five years ago, I was with TD Bank, which is a great bank, and TD was growing and growing and I looked at the banking climate and decided it was time to start a new, local commercial bank. The last one that started was around 20 years ago, which was then merged into Bank of Western Massachusetts, which is now People’s United Bank. So, there was opportunity for a local small business bank to establish itself in the marketplace.

How big is Nuvo in assets and branch locations?

We have one location right here in downtown Springfield. We believe in having [more] locations eventually. We now have approximately $80 million in assets. We had a three-year business plan to be on budget and break even in April. We did. We are profitable and we continue to grow. You look at the marketplace here in Western Mass., and we’re probably less than 1 percent market share. We’re the fastest-growing, smallest bank in Massachusetts.

What was the biggest challenge when it came time to launch Nuvo?

Well, the biggest challenge was market saturation with the number of banks in the market. We’ve got four of the biggest [Massachusetts] banks [in the Springfield market] and we’ve got a number of super-regional banks. But the banking climate continues to change and evolve. So, we thought that there was room for a small business lender, really, for all of Western Mass. We’ve got a lot of manufacturers, distribution, doctors, doctors groups… we’re a very diversified economy. And we’re also into Northern Connecticut. Hartford, really, is very close to Springfield. We felt that that market niche was not being served by a true, commercially oriented bank.

Where do you see Nuvo 5, 10, 20 years from now?

Honestly, my goal, our goal is we want to be the most profitable bank. And what that means is, we don’t want to be the biggest. You need big banks to support big companies, but Western Mass. is a lot of singles, a lot of small, average deals, half-a-million [dollars] and lower. The businesses are owner-operated or by the family and that’s what we’re keyed into. And it’s about relationships, not transactions. So, we’re using technology to reach our customers. For example, remote deposit capture, five years ago, was in its infancy. But what remote deposit capture gives to the customer is the convenience of being connected to their computers, swiping their checks that encrypted, it goes to the Fed and the next day, it’s in their account. You look at how technology can be used to save the owner time. They’re not wasting time driving to the bank every day. It’s in their account. I have almost 90 customers throughout Western Mass. and Connecticut who are my customers, never having to come into the bank, but have a direct relationship with me.

How big a challenge is technology adoption for the industry?

All of a sudden there’s this explosion of platforms we can choose from. There’s credit analysis platforms to underwrite commercial loan deals. It took us a year, literally, to come up with what we thought was the best, most advanced platform that’s good for the customer and would be accessible. So, we started with today’s technology and we have people who work with that technology rather than having to retrain people who have been bankers and won’t accept technology. And we don’t apologize to a customer who says, ‘Well, I don’t want to use that.’ You know what? I’ll go out and make a demonstration with a laptop and a blackberry tied to the Internet and show them a demonstration that takes two minutes. What’s your time worth? After a couple times of my calling, they don’t call us anymore. We call them and say, ‘How’s it going?’ And they say, ‘We love it. We can’t believe we didn’t do this years ago. It saves us so much time.’

Does being new offer any advantages as far as regulation is concerned?

No. It’s even worse. We’re a state-chartered bank and we’re also an FDIC-insured bank, so we’ve got both regulators looking at us. The key is credit quality. That’s the most important foundation for growing the bank.

Earlier this year, you turned your first quarterly profit and soon, you’ll be recognized for revenue growth. Did those things happen as quickly as you thought they would? Are they on target?

When we started, we hit right in the smack of the recession. A lot of businesses had tough years, as well. We didn’t grow the loan portfolio as fast as we originally budgeted for. But at the end of the day, putting out one bad loan in a recession can cripple a bank, so rather than grow fast and stay on budget, we decided to maintain credit quality. And the key to maintaining our budget was our ability to keep expenses low by watching every penny going out the door. So, we employ 13 people and we want to hire two more now that we’re profitable. Our expectation is when the recession ends, and our customers start seeing growth, I’ll look back to my long, long-term plan. And I’m starting to see some of my customers grow a little bit. They’re buying equipment, they’re buying vehicles. They’re not making the big purchase, they’re not really that confident, but they are seeing a little more settling out. They haven’t seen a lot of growth, but they’ve pared down their expenses to remain profitable and now they’re considering reinvesting.

What’s the biggest challenge facing the business community as a whole in Western Mass.?

Complete political uncertainty. It’s national uncertainty. There’s a lot of money on the sidelines waiting to make an investment. Think about it, we have a paradox right now. We have the lowest values in real estate in 25 years, the lowest interest rates in the last 100 years and a government that wants to try to promote business and get business going. You have all three of these, but still you don’t have market demand. What does that tell you? They’re not confident in the return on their investment because they don’t know where to put it to get the return. You see growth in the stock market, it’s been a great month, that gives a little wealth back to those who might take part of that and making a risk, but there’s just not enough confidence in the business community to make that investment. They just don’t see the long-term return right now.

Five Things People Don’t Know About Springfield:

• Quality of life. A lot of people come back to Springfield for that.
• The cost of living is incredible.
• The access to major distribution points: Albany, New York City, Boston and Providence are all within two hours.
• There’s a lot of arts and culture surrounding Springfield. Northampton, Amherst…There’s more Ph.Ds in this area than there are in most parts of the country.
• There’s still a good industrial base here, and it’s not just old industry, we’re talking highly computerized, world-class technology.