By Karen M. Kroll
When Eastern Bank opened in 1818, its first customer was a woman. At the time, few banks welcomed women as clients. “This was one hundred years before women could vote,” noted Paul Alexander, chief marketing and communications officer. “Eastern Bank provided a place for people who weren’t wealthy ship merchants or industrialists to put their money, rather than bury it in their property.”
“We’ve done things many companies, and certainly many banks, wouldn’t have,” Alexander added. Is that a risk? If so, it seems to be paying off.
Since its founding, the Boston-based bank hasn’t shied away from controversy in its drive to make financial services available to all—and to support the causes in which it believes:
- Opening branches in areas often ignored by financial institutions.
- Advocating for transgender legislation and pay equity.
- Earning recognition on the Corporate Equality Index as one of the “Best Places to Work for Lesbian, Gay, Bisexual and Transgender Equality.”
Each year, the Eastern Bank Charitable Foundation offers targeted grants to organizations that support a specific cause. In 2017, the Foundation contributed $1.5 million to nonprofit organizations working with immigrants. Eastern Bank also worked with the Chamber of Commerce to provide seed capital, consulting advice, and other services to early-stage women- and minority-owned businesses.
“Good is something you do.”
Eastern Bank’s community initiatives derive from its mission: to do good and help individuals and communities prosper. This also was the catalyst for the Join Us for Good marketing campaign launched in March 2017.
“We want customers to join us for long time and do good things, and we want to do good things for our customers, communities, and employees,” Alexander said. The ads feature a heart-tugging montage of individuals and groups of people working, volunteering, and playing, to the song Join Together, by The Who.
To kick-start the campaign, the bank asked people to submit selfies of themselves engaged in positive actions, such as volunteering at a school or collecting and distributing bikes for those without. In return they could be one of 500 individuals to win $200.
“As a community bank, Eastern Bank’s success depends on a vibrant and prosperous community,” said Bob Rivers, Eastern Bank chair and chief executive officer.
To help build vibrant, prosperous communities, Eastern employees give about 50,000 volunteer hours each year. Among other activities, they assist at community events, serve on boards, and advocate in support of legislation.
The bank allocates 10% of its net income to charity, an amount that’s totaled more than $100 million since 1999. It’s the fifth most charitable organization in the state of Massachusetts, according to Andy Ravens, public relations and internal communications director. “We punch above our weight,” he said, when it comes to philanthropy.
One reason: as a mutually-owned institution, Eastern Bank doesn’t answer to shareholders. That provides leeway when deciding which causes to support, and to what extent.
Focus on financial services and products.
Of course, a strong social conscience doesn’t eclipse the need to provide customers with quality products and services—at a fair price.
One example: Eastern created an express business loan that allows customers to receive a decision within minutes on loans of up to $100,000. “We need to make sure our products are being upgraded and improved to meet the needs of consumers,” Alexander explained.
For seven years, Eastern has been the top SBA lender in Massachusetts, and it’s one of the top ten in the nation. The bank has branches in about a dozen gateway cities—urban centers that face social and economic challenges.
Along with traditional commercial loans, Eastern Bank also makes numerous community development loans to nonprofits and other organizations. With the right expertise, such loans can be profitable, Alexander said. Because it’s local, Eastern Bank can bring a “level of understanding and service” few other banks can. According to the banks’ financial statements, its allowance for credit losses was less than 1% of loans and leases in 2016 and 2017.
Eastern Bank’s unconventional methods are working. It boasts $10 billion in assets and more than 120 locations in eastern Massachusetts and southern and coastal New Hampshire. It’s the largest and oldest mutual bank in the U.S.
That’s not to say it hasn’t faced backlash. Alexander noted that the bank’s ads include demonstrations of affection between both heterosexual and gay couples. “We’ve received blowback, from outside and from employees,” he reported. Most employees, however, along with the board and management team, support the bank’s approach.
Eastern Bank isn’t “trying to finger wag,” Alexander said, nor does it presume it has all the answers. “When customers complain, we respond respectfully and hopefully have meaningful dialogue,” he said. The goal is to retain the customers’ business. “But if we don’t,” he added, “we understand.”
Before launching the Join Us for Good campaign, Alexander spent a year talking to Eastern employees. He pointed out that most customers’ first interaction typically is with a teller, business banker, or customer service representative. “If they’re not on board, that can be big miss in terms of activation of the brand,” he said.
The reaction from employees? “Many said, ‘That’s my company. That’s why I’m proud to work at Eastern.’”
Karen M. Kroll is a business and financial services writer and content marketer based in Minneapolis-St. Paul. Email: [email protected].