Stoneham Bank has been a vital aspect in the Town of Stoneham since the demise of the once prosperous shoe industry that made Stoneham famous. The Executive Vice President Ed Doherty sat down with Stoneham Patch to talk about their relationship with the community, the history of the bank and the town and helped explain the difference between a big bank and a cooperative bank.
SP: How long has bank been here?
ED: 126 Years. It will be 127 in January.
SP: How did it get started?
ED: This whole area used to be a big shoe making community. A lot of the townsfolk, it was the haves and the have not’s and people didn’t have the right of home ownership back then because they didn’t have the money. So a bunch of people gathered together, pooled their money and opened this bank. So that is around 1885. So townsfolk started investing their money and they got a big piggybank’s worth of money. So people from town could come and say “Hey, I’d like to buy a house,” and the bank could lend them money. So that’s what started the bank. And I think that leads to the big question, which is the difference between a cooperative bank and a big bank.
We don’t have a fiduciary responsibility to show stockholders to show profits at the end of the year. We don’t have a private family who owns this bank. The people who own this bank are the people who make the deposits and have accounts here. We have a responsibility here.
Banks, believe it or not, are in the business of making money. We have to make money to pay the employee salaries and keep the lights on. But at the end of the year, we’re not responsible to show profits. We need to maintain expenses and be practical so when we lend money to you to buy a house or make a loan to your company, we underwrite it very soundly. We’re less on the risky side of any kind of lending or depositing side of things. Cooperative banks belong to the SIF and are enrolled in the FDIC program as well. That’s the Shared Insurance Fund. So all of you’re money is insured here even if the bank fails. So if you had reservations about banking with a small bank because you didn’t want to put all your eggs in one basket, you’d be safe here. So we partner with cooperative banks nation wide, which keeps the investor’s money safe.
SP: So keeps you guys accountable in case there is another Great Depression collapse or a collapse like in 2008?
ED: There’s a lot of stuff like that, a depression or that mess with Target or identity theft. Anything like that can happen. Let’s say someone got into our system and electronically drained our accounts. Because nothing is in cash these days, it’s all electronic. That money would be covered. That’s the good thing about SIF. But in general, we provide all of the amenities of a big bank in the style of a community bank. You can do everything like manage your accounts on your phone or your computer, you can take a picture of your check and deposit it. All of that. But, the only drawback is, there isn’t an ATM on every corner.
But because there is only one Stoneham Bank in town, there is so much of a reliance on what the bank has done and what it will continue to do in the environment of donations to the schools, donations to the Little League, the youth hockey league, and the other civic things the bank is involved in.
SP: Are these donations annual?
ED: Yes. Five percent of our after tax profits, at the very least, go to one of 155 groups like the Boys and Girls. All of our charitable work is up on our website. We pride ourselves on knowing that if somehow, someway, if we’re not able to make enough money, that the community is affected. Whether it’s the tree lighting ceremony or Town Day, we know we’ve been able to give back to the community. We believe that if we don’t give back, the town wouldn’t be as nice a place as it is. We’re proud of what we do here.
There are a bunch of employees here who grew up in Stoneham, this was one of their first jobs, they know the community, they take pride in being a part of the town and they like providing a service. So each of us donates 10 hours to the Boys and Girls Club, to Read Aloud, to any activity that benefits the community. We feel proud of the organization that we represent.