Spotlight On: Steven Larochelle, CEO, Enterprise Bank
November 2024 — In an interview with Invest:, Steven Larochelle, CEO of Enterprise Bank, shared why they are investing in AI-driven fraud prevention and enhancing mobile banking services, how they differentiate themselves with a combination of commercial sophistication and personal, accessible service, and how they are deeply integrated into the community.
What have been some of the highlights of Enterprise Bank in Greater Boston in the past year?
From a corporate perspective, we were recognized among The Boston Globe’s Top Places to Work rankings for the 12th year in a row, which is a big achievement. We were also recently ranked No. 2 in Massachusetts for the highest average volunteer hours per employee (32.94) at the Boston Business Journal’s Corporate Citizenship Awards and ranked No. 47 for charitable giving in Massachusetts. As for bank milestones, January 3rd marked Enterprise Bank’s 35th anniversary and June 30 marked our 139th consecutive profitable quarter — a remarkable achievement for any financial institution.
What is your overview of the community banking sector in Boston, and what are some of the biggest opportunities?
The New England banking market has benefited from a strong local economy, even during some of the recent downturns. Credit quality remains strong and I would say it is normalizing. The housing market, for instance, has slowed from being in hyperdrive — where we were seeing twenty offers on the first day — to a still strong but more normal market., Sellers still hold more market power than buyers, but it is getting closer to equilibrium.
In terms of employment, Massachusetts’ unemployment rate has been around 4.3%, and New Hampshire, where we also have a strong presence, is at 2.5%. That is very strong. We are finding good candidates for positions after a couple of years of a tight labor market, which is a positive sign of normalization in the employment market.
From an economic perspective, we are seeing a healthy regional economy with good growth. We are also seeing strong loan demand, especially in the commercial real estate and commercial & industrial sectors, which we are able to effectively serve and support thanks, in part, to our strong cash management capabilities.
How has Enterprise Bank managed to maintain its growth trajectory despite broader economic uncertainty?
Most of the economic uncertainty I have seen has been on TV. In the field, we are not seeing anything too dramatic. Our loan growth has been strong; we have grown by 5.6% year-to-date through June, and that was on track for 11% full-year growth.
We are focusing on maintaining and growing our core relationships, ensuring high service levels, and actively lending to our client base. Our delinquencies remain very low, we have only had one piece of Other Real Estate Owned (OREO) in the last few years, and none right now. Overall, the market is healthy, especially in the multifamily housing sector, where rents continue to rise.
What would you say is the key to providing better service and financial advising to your clients?
From a service perspective, we have a couple of key philosophies. The first is the “Sundown Rule.” This has been a core value from the day the bank opened in 1989. It means that all communications are returned the same day, either with an answer or an acknowledgment that the message was received and is being worked on.
The second principle is that “The Buck Stops Here.” Any customer communication or issue is yours to resolve or make sure it is handled properly by the right person. It is not about fixing the problem yourself if it is not your area of expertise, but about ensuring that the customer gets their response and resolution.
These two philosophies have been the foundation for our success in customer service. They underpin the high level of customer service our bank is known for, consistently creating experiences that exceed our customers’ expectations.
How is Enterprise Bank contributing to the local community, particularly in terms of supporting small businesses and local development initiatives?
‘Community’ is one of our core values and it’s something that’s woven into the fabric of who we are and how we operate. Everyone at the bank is involved with nonprofit organizations in some capacity, whether by serving on boards, supporting and volunteering at their events, or fundraisers. Collectively, we engage in thousands of volunteer hours every year, a practice that is encouraged across the bank. We also have a dedicated community relations team that facilitates community involvement by matching team members with organizations that align with their passions, ensuring that the involvement is meaningful for everyone involved. In addition, Enterprise Bank had made charitable contributions to more than 450 nonprofit organizations in the past year.
Small business and local development lending has been, and always will be, an important component of our business. Small businesses are often the backbone of the communities we serve, uplifting the local economy and enriching the communities they serve. To augment our efforts to support small businesses, we work extensively with the Small Business Administration’s (SBA) 504, 7A and Express Loan programs.
As the newly appointed Chief Executive Officer, what are some major initiatives or projects you are excited to push forward in the next couple of years?
There are several ongoing initiatives, particularly related to technology and security. We are constantly working on ensuring that our security measures are the best they can be, which is a never-ending task. Additionally, we are evaluating new products, especially in areas like mobile banking and fraud prevention. In fact, we are currently working to bring in AI-driven fraud prevention programs to enhance our capabilities.
Beyond that, I do not foresee any dramatic changes. Having been with the bank for almost 28 years and reporting to the former CEO for around 15 of those years, I believe we are on a steady path. We have consistently grown by around 10% annually in assets, deposits, loans, and profitability. Our focus is on maintaining that growth, which requires more personnel, resources, and thoughtful territorial expansion.
We are also focusing on succession planning. Both short-and long-term succession plans are being prioritized, as we ensure that the right people are in place to lead the bank forward. The changes we pursue are evolutionary rather than revolutionary. Revolutions can be messy, while evolution happens gradually and steadily.
In what ways is Enterprise Bank leveraging technology to better serve its clients?
Our technology and digital banking teams are constantly evaluating how we can improve our customer’s experiences as well as our operational efficiency. They are focused on working with vendors to ensure that our systems are not only secure but also user-friendly. Facilitating a best-in-class user experience while maintaining the rigorous security standards our customers expect from us is a challenge, but our talented team has done an excellent job and is always looking for ways to better marry the two.
Fraud prevention is another area where we are making significant investments. We are implementing new software to help identify suspect activity, particularly regarding check and ACH transactions. Check fraud, in particular, has increased dramatically over the past couple of years. It is surprising because, as checks become less common, you would expect fraud to decrease, but that has not been the case. Therefore, we are focusing heavily on bringing in tools to mitigate this growing risk, both to protect our clients and to manage the bank’s profitability and risk exposure.
What is your outlook for the Boston banking sector overall for the next two to three years?
We are always watching the market closely. As a bank primarily focused on credit, managing our loan portfolio is crucial. We are always paying attention not just to what the Wall Street Journal says, but to what our clients are experiencing on the ground. Right now, we are seeing continued strength in the market, but as a lender, there is always a healthy level of concern that the economy will turn. We stress-test everything, whether it is occupancy rates or cash flow projections, so that we are prepared for potential downturns.
Corrections in the market will happen, but predicting the exact timing is impossible. We plan for the downside while continuing to stay active and prudent in our markets. We do not want to be overly cautious and miss opportunities, but we are mindful of the risks. That is a balancing act we maintain in all aspects of our operations.
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