Two western Massachusetts mutual thrifts are showing that competition and cooperation aren't mutually exclusive.
City Savings Bank in Pittsfield and Lenox Savings Bank have joined forces to open a limited-service trust company.
Trust Company of the Berkshires, which opened this month with $1.2 million in capital and $29 million in assets under management transferred from Lenox's year-old trust department, will serve customers from both institutions through its office in Pittsfield.
It is the first stock trust company jointly owned by two mutual thrifts without a holding company involved, according to the Office of the Comptroller of the Currency, which regulates the trust company.
"By doing it cooperatively, we both can feed our customers," said Michael A. Christopher, president and chief executive of Lenox. "This way we avoid duplicating costs. We have more potential customers to bring to the table, and having two banks supporting this gives it greater credibility and strength."
The company will operate independently of both thrifts, which are equal owners but will leave day-to-day management decisions to Trust Company chief executive Paul B. Leavitt, a former Lenox senior vice president.
Trust Company officials already have been meeting with potential clients to develop relationships, Mr. Christopher said.
Officials have set goals of $33 million in assets under management by yearend and $75 million by the end of 1997. Mr. Leavitt said the break-even point for the company is about $100 million in assets.
The concept of the joint charter developed after City Savings began to look into starting its own trust department, which would have competed with Lenox.
The two executives realized "there's only so much business to go around, so why don't we maximize our resources and share," Mr. Christopher said.
"Having an independent company that's dedicated to trust services in Berkshire County would be very successful, more successful than either one of us would have been with our own trust departments," said J. Williar Dunlaevy, president and chief executive of City Savings. "It is very unusual, but you hear and read a lot about strategic alliances and finding ways you can work together and still compete and maintain autonomy. To us, this seemed like the ideal situation."
