Q&A: Rick leads Vermont National to bigger and bigger things

Vermont Business Magazine, Mar 01, 1997 by Andrews, Richard

VBM: So you're not ceding residential mortgage lending to the non-bank banks.

HASHAGEN: Absolutely not. Because not only do you make money on the mortgage loans, but for most individuals a mortgage is their most important financial transaction. If we can get their home mortgage, they usually feel pretty good about it, and are more likely to do their other business with us. We're not going to give up anything there without a fight.

VBM: Do you know how many branches you might close, and how many jobs that might affect?

HASHAGEN: We're just in the process of deciding branch closures. There is an overlap in some towns, and some branches will be closed. Right now our best guess is eight duplicate branches will be closed. No town will be left without either a Vermont Federal or a Vermont National.

On the numbers of employees, we just haven't tried to put a number on that yet.

As people leave in the meantime, we're either juggling around to cover or bringing in temporary help. So when we merge two branches, say, in Bennington, we will not have to let people go. There should be a minimum number of people losing jobs. Realistically, there will be some, but we're going to try to minimize it.

VBM: What are the significant trends and events in banking in Vermont?

HASHAGEN: What's really interesting about Vermont is the local control of banking. I don't know of any other state where the three major banking companies are locally controlled. We have ourselves, Chittenden and Banknorth, all roughly the same size, all based in Vermont, and all expanding outside of Vermont.

In the next tier you have Key Bank, which is obviously out of state. and Merchants, which is local. So Vermont banking is largely locally controlled. I think you'd be hard pressed to find more than three other states like that.

VBM: The activity in interstate banking has been underwhelming after all the hoopla that preceded it, and certainly Vermont banks have been a lot more aggressive outside Vermont than vice-versa. Why?

HASHAGEN: That is interesting. When they passed interstate banking, the assumption was that all the Vermont banks would be gobbled up. The prices jumped up in the late '80s. anticipating people would come in and pay a big premium. Didn't happen--I imagine because some of the big banks were doing things in other areas where there were more people and more money.

Then the recession hit New England. As it turned out, Vermont banks came out of it better than the rest of the New England banks. So even though we were smaller, we were in better condition than some of the big banks that might have wanted to buy us. I think that kept some apart.

And right now, some of the larger banks in the region, like Bank of Boston, have pulled out of Vermont. They're probably not going to come back. Fleet has been busy buying banks in New Jersey and New York. Maybe they'll come to Vermont at some point, but so far they haven't. And Key Bank's strategies nationwide seems to be curtailing the number of branches they have, so maybe they're not going to come back into Vermont and want to buy a bank with a lot of branches.