1st NH mutual bank in a century has sustainability focus

Walden Mutual Bank, the first New Hampshire mutual bank to gain a charter in more than 100 years, plans to serve food and agricultural businesses in the New England and New York region with an eye toward environmental sustainability.

Walden Mutual applied for a bank charter and Federal Deposit Insurance Corp. insurance in September 2021, and regulators accepted both applications by early March. The bank officially received its conditional bank charter from the state of New Hampshire on May 18. CEO and founder Charley Cummings said it hopes to open in August, barring any unforeseen delays, with initial capital of $25 million.

Cummings thinks the mutual structure, in which the bank is owned by its depositors, will allow Walden Mutual to help address systemic challenges like climate change, agricultural sustainability and inclusivity in lending that are not operating on a typical five- to seven-year investor timeline.

Charley Cummings, CEO and founder of Walden Mutual Bank Source: Walden Mutual Bank

"It allows our board to consider a holistic assessment of what we're trying to accomplish in the world beyond obtaining a profit," Cummings said in an interview. "There are a number of non-financial metrics that we are looking at to understand that impact and the mutual structure enables us to focus on those things."

Cummings started his career working at venture-backed clean energy companies and helped found Clean Power Now, a Cape Cod, Mass., organization advocating for wind power, which helped him understand some of the sustainability problems in the existing agricultural system. He later founded a sustainable local meat company, Walden Local Meats, in 2013. Cummings still serves on the company's board but is no longer involved in its day-to-day operations.

The idea for the bank was influenced by the experience of building the meat company's supply chain, when it became clear that "there were some gaps in the existing lending structure," Cummings said.

"I think a lot of regulators were excited at the idea of trying to reinvigorate this age-old form that frankly has served depositors and communities really well for a long, long time, but has sort of fallen out of favor in the age of shareholder value above all the other considerations," he added.

Walden will aim to lend to borrowers that are part of a "larger sustainable ecosystem," including companies that meet certain environmental, social, transparency, and accountability standards, in addition to other businesses that traditional commercial banks have overlooked like small farms, locally run and managed businesses and those owned and operated by women or people of color, Cummings said. Borrowers may include farms as well as other businesses in the food supply chain like food processors, distributors, consumer brands, trade brands and even renewable energy developments that use farmland in the region.

Walden plans to ask borrowers to take an impact evaluation at the beginning of each lending relationship and every year thereafter to assess impact over time and across the company's entire borrower portfolio.

"We want to work with all types of businesses that are at various points of that journey," Cummings said. "The journey of trying to think more holistically about how your business affects all of your stakeholders."

Senior Lender Christine Bascetta-Gath called the business an opportunity to be creative with an old model and refresh it for the modern marketplace.

"It gives us an opportunity to say, 'What do we want community banking to look like in a 15- to 20-year timeframe, and can we make sure that we are inclusive of all businesses?'" Bascetta-Gath said.

Walden's focus on a sustainable food niche comes as climate change, more severe weather and the proliferation of food deserts are making sustainability an increasingly salient concern, Bascetta-Gath said.

While Walden has a hub in Concord, the company is a digital-first bank, according to Bascetta-Gath. For now, retail lending will not be a part of Walden's loan portfolio, which will consist of farms and businesses, though Walden will accept deposits from both consumers and businesses, Bascetta-Gath said.

The mutual model means there is less pressure to constantly search for M&A opportunities, Cummings and Bascetta-Gath said.

"Mutual banks have been able to sustain — more so compared to your traditional stock institution — the test of time and longevity, because there is not the pressure for stocks to perform," Bascetta-Gath said.