4 O


n December 1, 2010, Michael Rauh, Jr.


B. be- came President and Chief


Executive Offi cer ofChelsea Groton Bank taking over the helm from Duncan Stoddard, an icon within the banking and business community. After a thorough search for Duncan’s replacement by Chelsea Groton Board of Trustees, Michael, a former Washington Trust


executive for


almost 20 years, was selected for his solid banking experience and his advocacy of community banks. the Resident


Recently,


sat down with Michael to discuss his new position, his management approach, his thoughts on the banking industry today, and his plans for the


future of Groton Bank. Alexis: Welcome


Chelsea to


Chelsea Groton. You know, it


choose a bank. Suddenly, being the biggest bank in the world isn’t so important any more. Knowing the people you’re doing business with is important. Knowing that


February 16 ~ March 1, 2011 the Resident 860.599.1221 www.theresident.com


residentPresident B. Michael Rauh, Jr., Chelsea Groton’s New President -


buy a business, expand their business.... All the money we generate stays right here.


local people.


This is local money supporting Alexis: You’ve got a marketing


and administration background and now you’ve left your home at Washington Trust. What was that like? Michael: It


Michael Rauh, President & CEO, Chelsea Groton Bank, says “Our goal is not to get bigger. It’s to get better. If we get better, the growth will take care of itself.”


was my fi rst bank. I started a business checking account in February, 1982. When I incorporated, Mark Turner gave me a loan using my 1979 blue metallic VW Bug convertible as collateral.


Michael Rauh: And now, you’re a media mogul! Alexis:


Let’s talk about


community banking. It seems to be the trend, going back to old-fashioned community banking. Michael: In some respect, there’s never been a better time. If there’s anything we’ve learned as a society over the last two years, it’s that big isn’t necessarily better so there’s been a real shift of what people look for when they


the amount you invest is staying in the local communities and with local businesses, knowing there’s someone you can talk to when you have a problem, face-to-face, not on the phone -- All the things we once took for granted are important again. Alexis: Good, old-fashioned


service.


Michael: It’s service and being local and being known. Alexis: And supporting the


community? Michael: Yes, supporting the local


community. Every dollar that comes in to Chelsea Groton as a deposit gets loaned out to someone in the community to buy a car, buy a house,


was a diffi cult decision. I’d been at Washington Trust for almost 20 years, missing 20 years by only six or seven months. I’d never really thought about leaving. I was very happy doing what I


was doing. I’m still far enough away from retirement that I never thought about retiring. Then, I got a call from the folks hired to fi nd a replacement for Duncan. So, we spent a couple of months talking.


As our conversations progressed, I realized that this position was an incredible match. Chelsea Groton is very similar to Washington Trust with a focus on customers, a focus on service, and a focus on people. It was a great opportunity to do what I’d always wanted to do, to achieve a goal of mine. I’ve always been a very entrepreneurial person. I’ve always appreciated people like you, Alexis, who hung themselves out there as a business person. I started a couple of businesses when I was in college. I ended up with a degree in economics from URI, not because I wanted to be an economist, but because I really liked understanding microeconomics, businesses and markets. I’ve always been fascinated by how people make money.


That’s what’s great about


America. There are so many different ways to make money.


During my earlier career in marketing and advertising, I really enjoyed meeting business owners and helping them to be more successful. At the end of the day, that’s what banking’s all about. How can I help you be a more successful business person? In order to make a loan, I have to understand a business. What is the upside of a business? How does the business make money? This is just something that’s always fascinated me.


I knew I wanted to run my own business someday. Now, 30 years later, it just happens to be a bank. But I’ve always pictured myself as a business person.


Alexis: What was Chelsea Groton looking for in Duncan’s replacement


(l-r) Duncan Stoddard, past President & CEO, Chelsea Groton Bank, and Stan Cardinal, President & Owner of Cardinal Honda and Chelsea Groton Bank Corporator, enthusiastically welcome Michael Rauh to Chelsea Groton Bank.


and why do you think they chose you? Michael: Duncan is a very, very good, nice person. He loves the people he works with and he loves the bank. It’s very hard coming in and replacing an icon like Duncan. First and foremost, Chelsea Groton was looking for someone who shared the same values that Duncan had for the bank. We’re a mutual bank so our owners are our depositors.


They started by asking if I was of the same mind that employees and customers are the most important. Even though Washington Trust was a stock company, the atmosphere was very similar there so that part of it was kind of easy for me.


That was job number one. Then my practical experience kicked in. During my tenure at Washington Trust, deposits grew from $400M to $1.8 billion. My responsibilities as Executive Vice President, Sales, Service & Delivery, included running the branch system, bigger than Chelsea Groton’s but not so big that it was an apples to orange comparison. Chelsea Groton, today, has assets of $813 billion. Our goal is not to get bigger. It’s to get better. If we get better, the growth will take care of itself. Alexis: How do you grow? Michael: In any business, you have to understand who your customers are, what they need and what they want. And, you have to do that better than anyone else. In some respects, I’m kind of the master of oversimplification. It’s one thing to philosophically know what you want to do. It’s another thing to figure out how to do it. And, you have to do it without it costing an arm and a leg. Answer the question - What is it that we can do better than anyone else? Alexis: And, to have the freedom


to do it? Michael: We have lots of capital.


We didn’t do any of the crazy things that got other banks into such deep holes. We’ve got lots of happy customers. There’s nothing here that needs to be fixed. There’s nothing here that needs to be turned around. My first inclination was to go to our customers and get


their opinions. So, we’re launching a customer survey now. Then, we’ll do one with all our employees.


I’m a believer in fundamentals.


Where’s the gap? What’s missing? And, then we’ll figure out how to solve it better than anyone else. We can’t do everything. But, we’ve got to do something better than anyone else. Alexis: What do you think of all these regulations? Michael: Our challenge is to deliver great products in a great way and still meet all the requirements from the regulators. I don’t think the industry or a bank should say, “we can’t do that because of the regulations.” Do I think many of them are stupid? Yes. Do I think many of them are redundant? Yes. Do I think many are pointless? Absolutely. But I don’t have a choice. I have to live with the rules they’ve established. I wish there were fewer of them and I wish they made more sense, but they don’t. We have to do the best we can. It’s interesting; the Chamber of


Commerce of Eastern Connecticut recently ran a survey. Paraphrasing one question, “Has the legislature helped, hurt, or had no effect on business,” the responses were telling. One third of responders indicated “no effect” and two thirds said “hurt.” No business replied that the legislature has “helped” their business. Alexis: What do you think about the conventional wisdom that banks aren’t loaning now? Michael: It’s not all about the


banks. It’s a natural part of a down economy. People don’t want to take on additional debt to expand or start a new business, so demand goes down. That will change as people get more confidence in the economy and as the housing crisis starts to stabilize. Confidence will build, but it will all take time. I don’t care how much money the Federal Government pumps into it, it just takes time to work your way out of the hole.


Alexis: How do you feel about the Government pumping money into the system?


photos by Alexis Ann


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