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Main Street’s Mr. Fix-It

Rheo Brouillard knows how to roll up his sleeves

Part of Rheo Brouillard’s recipe for improving Savings Institute has been increasing loans to small firms, such as Ken Cardinal’s (r.) bakery cafes and Sweet Peas food boutique. Cardinal’s son Tory serves up some delicacies. Part of Rheo Brouillard’s recipe for improving Savings Institute has been increasing loans to small firms, such as Ken Cardinal’s (r.) bakery cafes and Sweet Peas food boutique. Cardinal’s son Tory serves up some delicacies.

Don’t let Rheo Brouillard fool you. He can seem so laid back that he can make a job look easy. You would never label him a “Type A” personality. He speaks in a New England drawl, reminiscent of NBC newscaster Edwin Newman. Even on a rough day, when one of his tasks is to let a long-time employee go, he manages to not spend the morning under a cloud.

“I’ve never yelled at anybody,” says Brouillard, 60, president and CEO at Savings Institute Bank and Trust Co. and its parent, SI Financial Group, Inc., Willimantic, Conn. “I’m pretty easygoing. I don’t let things bother me.”

He likes to keep things loose, he says, when he’s out among the employees of his $1.35 billion-assets bank. “When I meet everybody, I answer questions straight, and I will tell folks what I can tell them. We’re a team,” he says. “We work together.”

Work gets it done

Pretty much from the cradle, Brouillard—current chairman of ABA’s Community Bankers Council—learned what a day of work was. He tends to be a hands-off manager, but he’s always been a hands-on guy. His mother ran a nursing home in Massachusetts, his native state, when he was young. One of his chores was buffing the home’s floors. Another was helping his father, who had turned the home’s property into a farm for vegetables that residents helped raise and harvest.

Other hands-on jobs followed. There was a summer in a cardboard box factory, and there was a job during college at Savage Arms, a gunmaker. “There was a lot of milling and drilling there,” says Brouillard. And he made a conscious decision about work while watching some of the union workers around him.

Quitting time was 3:00 p.m. for Brouillard’s shift. Daily, one of his coworkers would stand by the time clock at 2:50 p.m., hands in his pockets, waiting to punch out.

Finally, a supervisor said, “Can you go stand around somewhere else? It looks too obvious.” The worker shrugged.

“That really turned me off,” says Brouillard.

Pulling one’s weight is part of his approach to life, and it’s a principle he applies to his ABA role. Brouillard believes it’s critical for banking’s future that more bankers become activists for the industry’s causes and needs.

Traditionally, many became bankers because they felt it fit their personalities, he says. Bankers tend to be conservative types, who quietly go about the affairs of their banks and communities. At a fork in his early career, Brouillard had a shot at an insurance sales job, and he chose banking—even though the pay was much lower—because he didn’t see himself as a salesman.

But over time, he realized that part of the job has to be activism. “I’ve always had the inclination to let my voice be heard,” says Brouillard. But now he sees it as a duty. Now is a prime time to be an activist.

“I guess you could say that it took me a long time to realize that that’s what I am,” says Brouillard, who is intensely interested in politics. “I’m a salesman.”

Fixing up troubled banks

But before that, he learned to be a bank mechanic. In 1995, Brouillard came aboard when regulators had, after many travails, told Savings Institute’s board that the old CEO had to go. Brouillard stepped into a situation that no one could envy. Significant financial trouble was only part of the challenge. The bank had grown dysfunctional, in part in ways that, in more innocent times, used to be described as “not appropriate for a family publication.” Yet the scandals had started to make the local press anyway.

Extreme as the challenges were, Brouillard was no stranger to the labors of bringing back a troubled bank. He’d been through it before and arrived in Willimantic on the strength of his first such bout.

Brouillard began his banking career in 1976 in the management training program at Massachusetts’ BayBanks Corp., which gave him exposure to every area of the bank. After that, he worked in various BayBanks jobs, including managing a customer care center and an operations center. He stayed about seven years and might have stayed longer. But as the company consolidated operations, his next opportunity would have been in Boston, and he and his wife, Faith, didn’t want to live there. Brouillard moved to a regional bank processor, Connecticut Online Computer Center (COCC), where he was vice-president, customer service.

In time, Brouillard realized he wanted to be a banker again. In 1989, he was hired to turn around Connecticut’s Danielson Federal Savings & Loan Association.

Looking back on that, he says, with a grin, “I was a 35-year-old go-getter who was going to set the world on fire.” At Danielson, he had to extinguish a fire.

The thrift had gotten in over its head with bad loans, some of them the result of an out-of-market auto leasing operation it bought paper from. “It wasn’t long after I arrived that I found myself asking, ‘What am I doing out here?’” confesses Brouillard. But the young banker dug in, frequently traveling to the Atlanta, Ga.-based leasing operation to protect the thrift’s interests—sometimes having to do his own repo work.

Along the way, he had to write off about $1 million. But by 1994, he’d cleaned things up sufficiently to attract a buyer. Having worked through one comeback, Brouillard was ready when Savings Institute called.

Rebuilding in Willimantic

Turning around SI’s problems would be a bigger challenge, Brouillard quickly found.

When he arrived at the bank, he encountered a demoralized staff, with some folks not sure whom to trust anymore. One employee, who grew to be one of his right-hand people, flatly declined Brouillard’s request to become his assistant, initially.

Simply clearing up the multiple lawsuits facing Savings Institute chewed up much of the first few years of Brouillard’s time there. A handful of layoffs—including a family member of the ousted CEO—began to put the bank back on track. Brouillard saw the need to shepherd the very traditional mutual savings bank toward a model more like a commercial community bank. Gradually, he brought aboard talent for senior positions where he felt the savings bank lacked ability or depth.

His broad-based training at BayBanks gave him a good idea of what needed to be done, says Brouillard, and how to get it done. He’d not set out to become a bank-fixer, “but I’ve never shied away from any challenge.”

Evolving the business model

The road to recovery had twists, turns, and potholes, and  took five years to accomplish.

In 2004, a gradual corporate metamorphosis began when the state-chartered mutual savings bank under FDIC became a federally chartered thrift under OTS. At the same time, a mutual holding company was formed, which was an OTS preference. From 2005 to 2008, Brouillard began working on the bank’s distribution network, building new branches, rebuilding others, and moving others to better locations. A traditional New England design was adopted to reflect Savings Institute’s long history, dating back to 1842. (Today, SI Financial Group trades on the NASDAQ Global under “SIFI.”)

During all this time, the bank added more commercial banking activity to its mortgage lending mainstay. Brouillard explains that, historically, commercial banking has had higher margins, and Savings Institute needed to add more earnings.

The bank made it through the financial crisis—not without difficulties—and by 2010, growth had outstripped capital, and the bank needed to raise more. Brouillard had persuaded a reluctant board in earlier years to adopt the mutual holding company, a step away from traditional mutual roots. Now, it was a shorter step to full stock, and the bank raised millions in new capital through a public offering.

Building out into Rhode Island

The latest step in Savings Institute’s reformation came last year when the company acquired Newport (R.I.) Bancorp, a traditional thrift. The merger helped the bank on multiple levels. Newport serves higher income and higher net worth markets than does Savings Institute, which will open additional opportunities for the company’s trust and brokerage operations. A good 30% of Newport’s costs were knocked off early in its assimilation—$4 million in savings. Geographic diversification has been strengthened as well.

A bonus, according to Brouillard, is that the combined company addressed a growing squeeze on its portfolio mix that could have blown through federal qualified thrift lender tests. Newport generally holds mortgages, while Savings Institute has mostly followed a mortgage banking model in recent years. The latter has helped increase fee income to supplement narrow margins. Now, the commercial mortgage balance has been restored, forestalling thoughts of a charter change.

Brouillard anticipates that 2014 will mark a return to something like normality for the company, with the costs and financial statement noise of the bank’s various adjustments finally leveling off. It’s been a long ride, with the challenges including culturally moving beyond mutuality, a significant shift for board members.

Having made the move, the company runs the potential risk of being pushed into a sale by an investor. Brouillard says staying independent and continuing to serve the communities where the bank grew up means watching out for opportunities for profit and for growth, such as future merger partners.

“Unfortunately,” he says, “bank size does matter.”

Meeting community bank challenges

As befits such a background, Brouillard is by no means shy. He and some other community bankers recently met in the office of a member of Congress whose district contains the head offices of 13 community banks and not one big bank headquarters. Yet that member has not supported community banks in their struggle with the likes of the Dodd-Frank Act and its aftermath.

The bankers met with an aide. He told them the congressman had not supported their preferences because he thought the legislation they backed would help big banks, too.

“You’ve got to stop that stuff,” Brouillard declared, in response to this “divided industry” comment. While banks may scrap with each other in the free market, using every advantage they can muster, he’s convinced unity is critical on the Hill.

Brouillard has seen the results of disunity. Chris Dodd, a Democrat and former chairman of the Senate Banking Committee, came from Brouillard’s state, and left his name on Dodd-Frank.

Brouillard says he could never make a dent with the senator. “During the creation of the legislation, I met with Dodd and with his staff,” he says. “Dodd kept saying, ‘We’re not going to do anything here to hurt community banks.’” Unfortunately, too many people in banking believed him.

“It’s very frustrating for community bankers to have all this regulation thrust upon us,” says Brouillard, “when we’ve done our jobs and supported our communities all these years.”

This has hardened his resolve to devote his energies to one of the Community Bankers Council’s prime missions: advocacy. In addition to direct banker involvement in events, such as ABA’s upcoming Government Relations Summit, Brouillard favors concentrated advocacy efforts, such as the association’s 501 (c)(4), Financial Education and Advocacy Initiative, which his bank supports.

“FEAI can help the industry by providing information and education to lawmakers and their staffs,” points out Brouillard. “These people are pulled in hundreds of directions, and they don’t have time to become experts in banking.”

Brouillard sees a waking up among bankers after many have been low key for too long. “We are all feeling the impact of what happened over the last five years,” he says. “We now see the need for advocacy.”

Steve Cocheo

Steve Cocheo’s career in business journalism has taken him to all 50 states and nearly every corner of banking in institutions of all sizes. He is executive editor of ABA Banking Journal, digital content manager of, and editor of ABA Bank Directors Briefing. He coordinates the popular Pass the Aspirin and First Person features and wrote the booklet series Focus On The Bank Director. He is the only journalist to have sat in on three federal banking exams, was a finalist for the Jesse H. Neal national business journalism awards, and a winner of multiple awards from the American Society of Business Publication Editors.

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