Everett Co-Operative Bank has spent about 125 years as a one-branch operation that prides itself on old-fashioned service – but Elizabeth Jones, its CEO, says she doesn’t balk at big changes. And change might be necessary: In her 10 years at Everett, she’s pushed through some major revisions to the bank’s technology capabilities, and says the changing banking environment might prompt Everett to make acquisitions for the first time in its history.

Title: President & CEO, Everett Co-Operative Bank
Age: 58
Experience: 35 Years; 10 at current position

How’d you get to Everett in the first place?

I grew up in Everett. I started my banking career in Bay Bank, so I stayed with Bay Bank until Bank of Boston acquired us back in 1996, and then I stayed through November of 1999… What I did bring with me [from Bay Bank] is a sales and service culture. This bank had a great reputation for sales. People downstairs are fabulous – I couldn’t have inherited a better group of people. … What I did was brought a sales culture to it, and with that sales culture I was able to convert service into sales and enhance the bottom line. So the profitability of this bank skyrocketed, and we’ve had some very good success for years.

Lots of community banks have recently been touting a “flight to quality” in the past year, as depositors flee the big banks and pour their money into their community banks. Have you seen much of that?

I’ve seen deposits grow, but I believe it’s almost a lack of people spending. I don’t see it shifting from the larger banks – now, I might have a portion of that [money] that people aren’t investing, because this stock market’s performance has been so poor … but that’s what I’ve seen in deposits growth.

Community banks all brag that they’ll survive against big banks because of their emphasis on personal service, but I’ve also heard some consultants talk about how lots of customers don’t care about friendly faces nearly so much as whether the bank has online or technology perks. What’s your take on that?

That has merit, and I’ll tell you why: About 5-6 years ago we introduced online banking. It costs the bank about $55,000 to run online banking a year. … Now, 10 years ago, this bank was maybe $120 million. We’ve grown twice as big in 10 years. We wouldn’t have grown if we didn’t have, or we didn’t keep up with, the technology. We’re never going to be a leader in technology, but there’s so much that you have to keep up with. We probably have about 1,500 customers on online banking. If we didn’t take that measure, if we didn’t take that step in introducing it, even though it’s a cost to the bank, we wouldn’t have grown.

Do your peers get it, you think?

I think everybody understands the technology. The smaller banks right now, if you’ve got a $50 million bank, to spend that kind of money, it’s getting more and more difficult. I really believe there are opportunities out there for acquisitions and for mergers because I think that the economy of scale will make so much sense.

Let me just give an example. A year ago, we spent about $95,000 for FDIC insurance. This year, the number’s going to be about $325,000-$350,000. So those kinds of expenses, along with online banking, along with developing a new Web site, along with e-statements – this is all cost. It’s going to be so much more difficult for smaller banks in the future to maintain this ever-growing cost increase. It’s just going to be tough.

So you’d go for a merger?

I wouldn’t mind looking at an acquisition of a bank of my size or smaller. Because there would be an economy of scale, and there are banks out there with a one-bank location that would make a lot of sense.

Top Five ways Jones worked to keep the bank running smoothly:

1.) Started online banking: if you don’t go online, you’ll never snag customers from the younger generation.

2.) Put together a service package that includes a line of credit, online banking, ATM cards and more to “cross-sell.”

3.) Her first order of business 10 years ago: give the ATM a prominent location up front. Transactions increased by 4,500 in the six months following.

4.) Hired a good senior loan officer: she made the hire a couple months after she arrived on the scene, and he’s been there ever since.

5.) Contracted outside watchdogs: Jones firmly believes in hiring consultants to scrub through Everett Co-op’s portfolio.