War . Appropriately , the pioneering first B corp bank was one in Minnesota . The largest B corp bank is a historic New York institution .
Androscoggin Bank was chartered as a mutual bank in Lewiston , Maine , in 1870 , just 50 years after the territory became a state . Before that Maine was part of Massachusetts , which became emblematic of the early industrial revolution in the form of large water-powered textile mills . Not surprisingly , the same mill complexes that lined rivers in the Bay State also arose in the Pine Tree State .
In the five years after the end of the Civil War in 1865 , the population of Lewiston , on the Androscoggin River , doubled to 12,000 . There was an influx of immigrants , including many French Canadians and Irish , to work in the textile and lumber mills , as well as other industries .
“ At the time there was only one commercial bank in Lewiston , and no consumer bank ,” said Neil Kiely , president and chief executive officer of Androscoggin Bank . “ Also , at that time the mutual form of bank was popular . It has since waned , other than credit unions , which are a form of mutual . But otherwise the publicly traded bank , or private structure , prevails today . Our founders could have formed a stock bank , but they wanted the profits to be cycled back into the community .”
That approach succeeded through the decades . Indeed , Androscoggin was one of the first banks in the country to petition to reopen after the 1933 Bank Holiday ( see article , page 18 ).
Even as mill closures after World War II devastated many textile towns , such as Lawrence and Lowell , Massachusetts ( See Financial History , Issue 140 , Winter 2022 ), the mills in Lewiston persevered into the 1960s .
Androscoggin Bank has expanded to 11 branches today . Not being publicly traded , the bank does not disclose full financials , but according to its annual report , it “ earned a record net income of $ 8.3 million in 2021 , which is nearly 2 % higher than 2020 . The bank is proud of the growth in our loan portfolio in 2021 of nearly $ 48 million ( 4.75 %). The bank ’ s capital position is strong , growing nearly $ 8 million in 2021 over 2020 levels .”
Kiely , an attorney by training , joined Androscoggin in 2010 as a director . He had been with a large national law firm in Washington , DC before moving to Maine
Neil Kiely , president and chief executive officer of Androscoggin Bank . “ There was a sense of urgency about what was happening in community banking . Banking is often perceived as a commodity business , so we chose to differentiate ourselves by building a culture that would attract and empower the best employees in the market .”
to be in-house counsel for a company . He left that role to become an entrepreneur , as well as a renewable energy developer . “ It became clear to me immediately upon joining the bank that the financial sector was going to change more in the next 10 years than it has in the last 50 ,” said Kiely .
Noting that 30 % of community banks in the country have disappeared over the last 10 years , Kiely recalled , “ There was a sense of urgency about what was happening in community banking . My instinct was how to differentiate Androscoggin . Banking is often perceived as a commodity business , so the way we chose to differentiate ourselves was by building a culture that would attract and empower the best employees in the market .”
Many companies in the retail sector have taken to calling their employees “ associates ” or “ partners ,” but Kiely knew that simply changing labels would not be meaningful .
“ We had to elevate our employees as stakeholders in practice ,” he said . “ That means a real culture of meaningful work . And it has made a difference by objective measures . Our engagement scores went up , our referrals went up , client satisfaction scores went up and eight out of 10
Courtesy of Androscoggin Bank new employees are being recruited by existing employees . That is very telling .”
Also telling was the need to find new metrics . “ Originally we turned to the B corp as a benchmark ,” said Kiely . “ In 2020 I asked my staff to take the B corp assessment as a way to find what gaps we still had . I was struck by how rigorous the process was . It involves about 200 questions . As a financial institution we are audited by state and federal regulators , and the B corp assessment was on a par with those in detail , rigor and integrity . By the time we were done we determined that we could actually achieve B corp status .”
There are about 5,500 B corps in the United States , of which Androscoggin became only the ninth bank . Androscoggin achieved its certification through B Lab , a non-governmental institution formed in 2006 .
In June 2022 , Androscoggin shifted its charter from a C corp to a PBC . All of the state and federal regulatory oversight remains , and the bank has to be recertified by B Lab and as a PBC every three years .
As part of the restructuring as a B corp and PBC , Androscoggin established a B corp steering committee , as well as several new employee-led teams , including diversity , equity and inclusion ; sustainability ; events ; and engagement .
About 40 % of all Androscoggin employees are involved in B corp activities in some way . All employees receive 24 hours of paid volunteer time that they may use as they see fit to support organizations and causes that matter to them . To achieve officer level within the Androscoggin organization , individuals must have a proven track record in the community and are asked to participate in board level opportunities to help support community partners .
The bank holds an annual week of Greater Giving in partnership with organizations aimed at tackling food insecurity in each of the communities where the bank has a branch . The week includes fundraising and food drives . There are also coordinated opportunities for teams to volunteer together , paid for by the bank as a part of normal work hours without requiring employees to use their paid volunteer time benefit .
“ That has become a draw even in the midst of the Great Resignation ,” said Kiely . “ Even during the shift from C corp to B corp , people commented to me that
www . MoAF . org | Winter 2023 | FINANCIAL HISTORY 33