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Chelsea Groton president enjoys seeing customers as the bank's owners

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B. Michael Rauh Jr. likes that his bank's customers are also his bank's owners.

As the new president of Chelsea Groton Bank, Rauh says he remains committed to the bank's mutual ownership, which means it's owned by its depositors.

"There's something to be said for a company whose customers essentially own the bank," says the former longtime executive with the Westerly-based Washington Trust Co. who has been at the helm of Chelsea Groton for about a month.

"And this bank's board is very committed to mutuality," he adds.

That's important to Rauh because Chelsea Groton Bank is one of this state's largest mutual savings bank, and its longtime president and chief executive officer Duncan Stoddard - who will officially retire early next year but remain aboard as a consultant through the spring - has been a strong advocate for mutual ownership. That won't change under his tenure, pledges Rauh.

The bank that he now heads is a strong one. Chelsea Groton is this region's largest locally owned mutual savings bank, with assets of $813 million and 14 branches stretching across southeastern Connecticut. During 2009, the Groton-based bank saw its assets rise 7 percent and it boosted its capital position - basically its financial cushion - to more than $114 million, bringing its capital to more than 15 percent of its assets, reflecting its superior financial strength. Rauh, in fact, calls the bank a "super capitalized" institution, whose 15.3 percent capital-to-assets ratio is well above all regulatory requirements.

Total deposits also grew 11.1 percent this past year, and its business-banking portfolio saw healthy growth of 7.8 percent, with 126 new business accounts.

Rauh comes aboard Chelsea Groton with two decades of banking experience at Washington Trust, Rhode Island's largest locally based independent bank - it's now among the Ocean State's top three banking institutions. He also has broad experience in marketing, advertising and publishing. Before joining Chelsea Groton, he served as the executive vice president for sales, service and delivery at Washington Trust responsible for about 200 employees at the bank's 18 branches, as well as oversight of its call center, e-commerce operations and cash management and lending divisions for small business.

He joined Washington Trust in 1991 as its vice president of marketing and was later promoted to senior vice president and then to executive vice president. Before his banking career, the University of Rhode Island graduate worked as an executive with the Chaffee-Bedard advertising and public relations firm in Providence and Viking Technologies, a software development and sales firm in Newport, R.I. He's also worked with a monthly arts magazine in Rhode Island and a Newport tourism organization.

The Washington Trust Co. is the principal subsidiary of Washington Trust Bancorp Inc., a $2.8 billion institution with operations in Rhode Island, Massachusetts and southeastern Connecticut.

Like Chelsea Groton, which was founded in 1854, Washington Trust has a long history of banking in Rhode Island, beginning its operations in 1800.

The 51-year-old Rauh is a native of Alexandria, Va. His two younger siblings, a brother and a sister, still live in the nearby Washington, D.C., area. Rauh is fit and trim and says he's an enthusiastic outdoorsman and athlete who enjoys hiking, mountain biking, boating and skiing.

During Stoddard's tenure as president, his institution's assets more than doubled as it expanded its branch network, grew its residential and commercial loan portfolios and boosted its profits. The 64-year-old Stoddard announced his retirement in January. He won't serve on the bank's board in his retirement, preferring to leave the bank's future direction in the hands of Rauh, who is married to Annette DeSilva, an administrator at the University of Rhode Island. Their son, Benjamin, is a high school freshman in Rhode Island in Narragansett, R.I. The couple will celebrate 25 years of marriage next September. Besides his family home in Narragansett, Rauh now has an apartment in Mystic, which he and his family enjoy as they get to know southeastern Connecticut.

He says the transition from a publicly traded institution like Washington Trust Bancorp, whose stock trades over the Nasdaq electronic stock exchange, to a mutual, or depositor-owned, institution like Chelsea Groton was seamless.

Rauh says he knows his role as a community bank president isn't just about the bottom line. He intends to build his public profile in the region. That won't be hard for him, since his community affiliations in Rhode Island are already lengthy. Like Stoddard, he's been lauded as a "citizen of the year" - Stoddard gained the honors from the Chamber of Commerce of Eastern Connecticut while Rauh was feted by the Greater Westerly-Pawcatuck Area Chamber of Commerce.

Rauh pays sincere tribute to Stoddard, and to the entire Chelsea Groton banking staff, for their sincerity, hard work and ability that's made Chelsea Groton Bank a strong, well-respected community bank. He doesn't plan to rock the boat, but will, of course, bring his own signature to the institution as its top executive.

"It's been absolutely wonderful," says Rauh of his first month.

Stoddard and the bank's directors praise Rauh, as well, saying he was a superlative candidate during the extensive search-selection process. He's experienced, respected and understands the delicate banking formula that nimbly mixes growth and profitability with good customer service and community involvement.

Rauh pledges that Chelsea Groton will continue to expand its services toward small business, its retail customers and its commercial clientele. "As a mutual, we have a responsibility to this local market," says Rauh, "to the people who live here, and to the businesses here."

Business snapshot:

Name: B. Michael Rauh Jr.

Title: President, Chief Operating Officer

Institution: Chelsea Groton Bank

Headquarters: Groton

Assets: $813 million

Branches: 14



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