Ryan Bailey recently began work as Cambridge Savings Bank's new CEO with a mandate to revamp the 190-year-old depositor-owned institution's retail franchise.
"Our commercial-and-industrial lending, that's the crown jewel," said Cambridge Savings Bank Chairman Robert Reardon. "We do a great job on that already. We just needed someone with more retail experience to make sure [consumer] customers were getting the full benefit of what they needed."
The $6.9 billion-asset Cambridge Savings in Massachusetts conducted a national search with the help of an executive recruitment firm before anointing Bailey, who had worked nearly three years as head of retail banking for USAA, to succeed the retiring Wayne Patenaude. That is a step not every community bank is comfortable in taking when finding its next leader. But in Cambridge Savings' case, the board thought it was critical to find an outside candidate with experience in areas it wants to bolster.
Prior to joining USAA in May 2021, Bailey served as head of the consumer bank for Bank of the West and as TD Bank's head of retail lending. From September 2022 to September 2023, Bailey chaired the Consumer Bankers Association.
"With that background, we thought he was a perfect fit for what we need going forward," Reardon said.
A digital focus
Though Cambridge Savings is a mutual bank with roots dating back to 1834, home loans make up less than a third of its $5.7 billion loan portfolio.
At the top of Bailey's to-do list will be figuring out the best way to refresh Ivy Bank, the digital banking division
"Ivy has been great at gathering deposits and has a high adoption of financial wellness tools compared to industry average, but we know there are other products and services that can be built with a digitally-focused lens that our customers could benefit from." Reardon said.
Bailey's experience, particularly the 33 months spent at digital-only USAA, made him a natural candidate to follow Patenaude at Cambridge Savings, said B.J. Berrettini, New England recruiting manager of AJ Consultants in Kingston, Pennsylvania.
"Sometimes the strategy behind the succession plan is clear once the hire is announced," Berrettini said. "Hiring an executive from a super regional bank with extensive experience spearheading complex digital transformation initiatives following a career in deposits, payments and products makes perfect sense."
To be sure, retail banking won't be the only issue Bailey will be called upon to address as Cambridge Savings' new CEO. The company is also open to expanding via the merger-and-acquisition route, according to Reardon. "I think there almost has to be consolidation going forward," Reardon said. "We're certainly looking out there, talking to other banks. … Hopefully, if the time comes when they decide they want to merge, they'll knock on our door."
"Cambridge Savings Bank's goal of improving and enriching the lives of our neighbors in the communities that our bank serves resonates with my relationship-driven approach to leadership," Bailey, who joined the bank on Wednesday, said in a press release. "With a steadfast commitment to innovation, integrity, and client-centricity, I am eager to collaborate with our talented team."
Inside versus outside
Bailey's arrival at Cambridge Savings comes about two months after the $13.3 billion-asset NBT Bancorp in Norwich, New York,
Similarly, the $1.5 billion-asset TAB Bank stayed in-house in selecting replacements for President and CEO Rick Bozzelli, who retired in January. On Thursday, TAB, headquartered in Ogden, Utah, announced Chief Strategy Officer Austin Strong will take over as CEO. Chief Credit Officer Tyler Heap is moving up to president. Both Strong and Heap have been at TAB more than a decade.
While succession decisions are generally too idiosyncratic to discern trends favoring either an in-house or outside choice, Cambridge Savings' process, which included hiring an executive search firm to assist, is unusual, said Kevin Stein, managing director at Klaros Capital in Washington, D.C.
Smaller institutions "are very sensitive about their expenditures," Stein said. "Most can't afford to hire a search firm with search fees typically amounting to a year's salary for the position being filled."
Boards and management teams typically lean in favor of an in-house solution when considering succession, Stein added. An in-house candidate "understands culture and understands the needs of the organization," Stein said. "They may be able to achieve a level of success, performance and acceptance among the board and management team a lot faster than an unknown outside candidate.
"Let's be honest, every board and every bank CEO would prefer to promote their successor from within," Berrettini said. "Sometimes the right successor does not exist internally and the board has a fiduciary responsibility to take all necessary steps to ensure the best candidate is chosen."
