When Berkshire Hills Bancorp's president and chief executive, Michael P. Daly, asked Lawrence A. Bossidy to be the thrift company's chairman in 2002, Mr. Bossidy set one condition. The former General Electric vice chairman and Honeywell chairman and CEO said he had no interest in being part of a sleepy community bank - even if it was in his hometown of Pittsfield, Mass.
Sleepy is probably the last word anyone would use to describe Berkshire Hills since Mr. Daly took the helm that October.
It quit the subprime auto-lending business and cleaned up a related asset-quality mess; sold a data processing firm it had bought in the late 1990s; pursued its first out-of-state expansion, opening three branches near Albany, N.Y.; and doubled its size by buying the $912 million-asset Woronoco Bancorp Inc. of Westfield, Mass.
Mr. Daly says all that has been a prelude to what the company expects to accomplish between now and the end of 2008.
The $2 billion-asset Berkshire Hills, which has long held the top market share in Berkshire County, is on a mission to transform itself into more of a regional player. It plans to build more than two dozen branches over the next three years and to significantly increase deposits, loans, and assets under management.
In a presentation to analysts and investors this month in Boston, Mr. Daly said Berkshire Hills wants to capitalize on a scarcity of midsize banks in its three primary markets - Berkshire County, the capital region of Albany, and Pioneer Valley in southwestern Massachusetts, where Woronoco used to operate.
"In these particular markets, there is a real need for strong, service-oriented regional banks," Mr. Daly said. "These markets have substantial opportunities, and we're going after them."
In an interview Friday he said the parent of Berkshire Bank is also eyeing expansion into southern Vermont and northern Connecticut.
It is especially focused on the Albany area, where last year it opened three Berkshire Bank branches and a separately chartered commercial bank that solicits municipal deposits. (New York law bars thrifts from accepting commercial deposits, and to get around this a handful of thrifts have established commercial banks.)
Of the 26 branches Berkshire Hills wants to open by the end of 2008, 18 would be in the Albany region, which is growing faster than most in the slow-growing Northeast.
According to Federal Deposit Insurance Corp. data, bank and thrift deposits there jumped 29% from July 1, 2004 to June 30, 2005. By comparison, deposits in the Pittsfield area rose less than 4%.
In November the company hired a longtime area banker, Thomas C. Crowley, to lead its expansion in the Albany region, and Mr. Daly said loan officers have begun a "relentless" calling effort to drum up new business.
"We're comfortable with cold calling," he said. "We do not have desk huggers."
Mr. Daly, 44, joined Berkshire Hills 20 years ago and headed its commercial banking division before taking over as CEO. Though he would not rule out acquisitions, he said the plan for now is to build the company organically.
Over the next 33 months, Mr. Daly said, Berkshire Hills wants to increase deposits nearly 50%, to $2 billion; loans by about 64%, to $2.3 billion; and assets under management by about 90%, to $795 million.
Thomas Doheney, who covers the company for Sandler O'Neill & Partners LP in New York, said Wednesday that Berkshire Hills' growth targets are ambitious, but he said they were decided on after "a thoughtful look at the opportunities around them."
Still, he said it would not be easy.
Mr. Doheney noted that the company is building branches at a time when deposits are getting harder to come by. "Deposit growth is slowing," he said. "If you look at the industry as a whole, it is facing some challenges. Bankers will tell you, the current environment is as competitive as any time in recent history."
Rockwell Clancy, the director of planning and development for Sheshunoff Management Services in Austin said Berkshire Hills could realize its goal if it establishes a reputation for doing more for its customers than other community banks while providing better service than its money-center competitors.
"They've got to be able to say, 'You, as a company with $50 million in sales, are going to be the big guy around here and get all my attention,' " Mr. Clancy said in an interview Thursday. "At the end of the day, it all comes down to execution."
Though it remains to be seen how Berkshire Hills will manage its growth program over the next three years, Mr. Doheney said it aced its latest big test - integrating Woronoco, which it bought in May. The company projected cost savings of 30% and delivered 36%, Mr. Doheney said. What's more encouraging, he said, is that it ended 2005 with its largest loan pipeline ever.
To be sure, it helps to have a chairman like Mr. Bossidy, who has written a book on executing business plans.
Mr. Bossidy played amateur baseball with Mr. Daly's father growing up in Pittsfield, and Mr. Daly said Mr. Bossidy has been an invaluable help, providing counsel and strategic direction.
"I'm not just a titular chairman," Mr. Bossidy said at an investor conference in New York in December. "I don't lend my name to these things casually. I'm involved in the strategy of the bank and I'm interested in its progress."
Mr. Doheney said "it is very clear that" Mr. Bossidy's connection to Berkshire Hills "isn't just superficial." He said that "having access to interaction with Lawrence Bossidy is an incredible asset for a company the size of Berkshire Hills."
