The careers of Washington Trust’s outgoing CEO and his successor look eerily similar.
Joseph MarcAurele and Ned Handy entered banking together in 1986 as executive trainees at Fleet Financial Group in Boston. Handy was fresh out of college, while MarcAurele had been a high school teacher and coach before switching professions.
Both served as regional presidents at Citizens Bank in Rhode Island and Connecticut. Each had stints as president and chief operating officer at the $4.4 billion-asset Washington Trust, posts Handy has held since November 2013.
So it makes sense that Handy, who will replace the retiring MarcAurele, 66, as the $4.4 billion-asset Washington Trust’s chairman and CEO in March, has no plans for any major changes — with one exception.
Handy, 55, will focus on bringing in more deposits, especially in Providence, R.I., a market dominated by Bank of America, which bought Fleet in 2004, and Citizens. Washington Trust's loan-to-deposit ratio was 106% at June 30, meaning it has relied on other funding sources to support its loan growth.
Washington Trust held about 7% of Providence's deposits in mid-2016, based on the most recent data from the Federal Deposit Insurance Corp. The company holds about a tenth of Rhode Island’s $29 billion in deposits.
“We’ve got our foot in the door and we’re getting some traction,” Handy said.
Still, any other changes should be tactical with no plans for sweeping reforms or course corrections.
“Barring any big changes, we do have a little running room,” Handy said. “I’m inheriting a strong staff that’s all pulling in the same direction, and the credit situation is very strong. We’ll be able to be methodical and strategic as we approach things.”
MarcAurele lured Handy to Citizens in 1995 and then Washington Trust 18 years later. MarcAurele “had to prod me a few times before I left Fleet to join Citizens, but ultimately I couldn’t resist,” Handy said. The same scenario played out before Handy jumped to Washington Trust in 2013.
In another case of overlapping paths, MarcAurele, who became Washington Trust’s chairman and CEO in April 2010, was recruited to the Westerly, R.I., company by his predecessor, John Warren, in September 2009.
Under MarcAurele’s leadership, Washington Trust’s assets have increased by 50%, and its annual profit has more than doubled, jumping from $16.1 million in 2009 to $46.5 million last year. Through June 30 the company’s 2017 profit totaled $25 million.
“Washington Trust is a one-of-a-kind institution and I am truly honored to have led our 217-year-old company during a period of tremendous growth and profitability,” MarcAurele, who will remain on the company’s board after retiring as an executive, said in the press release naming his successor.
Washington Trust also announced that David Devault will retire as chief financial officer in Jan. 31. He will be succeeded by Ronald Ohsberg, who is treasurer. Mark K.W. Gim, the company’s chief strategy officer and executive vice president of wealth management, will replace Handy and president and COO.
The company has developed a reputation for recruiting and training executive talent.
“One of the notable qualities of the bank has always been its deep management team,” Damon DelMonte, an analyst at Keefe, Bruyette & Woods, wrote in a Tuesday note to clients.
Handy and Gim “bring a strong working knowledge of the bank and its strategy while externally, in recent years, both have had increasing visibility with the investment community, which should allow for a seamless transition process,” DelMonte said.
While Handy believes he has some “pretty big shoes to fill” following MarcAurele, their past experience shows it can be done.
“I’ve actually filled them one or two times before,” Handy said. MarcAurele has “been more than a friend. He became a mentor and he’s been one ever since. He’s a person for whom I have the utmost respect.”