Fertile Financing: Walden Mutual Applies Old-School Banking to Modern Needs
Illustration by Michael Piazza
Farming, local food production and mutual banks share a few things in common, including New England roots that go back centuries. In the spirit of “everything old is new again,” a new bank, Walden Mutual, is reaffirming those ties. Walden Mutual is a new depositor-owned financial institution focused on supporting New England’s farms and food producers.
Throughout the 19th and into the 20th centuries, farms and mutual banks dotted the New England landscape. The region’s tradition of small farming continues, and is thriving as of late. But the banking system has changed significantly.
Long ago, the trend shifted from local banks serving local communities toward large, shareholder-owned regional and national banks. While megabanks have served many purposes, they may not be as attuned to the unique financial needs of New England farms and food businesses as some of their local predecessors.
That’s where the Walden Mutual comes into the picture.
The Walden Mutual website describes the new bank—so new they are expecting approval of their charter any day—this way: “We’re creating an online bank for everyone who eats, makes, grows, cooks or just loves our local food. We’re lending to sustainable food innovators across New England and New York while creating savings accounts that directly support those ventures.”
The mutual bank model Walden Mutual is reviving is similar to the old Bailey Brothers Building and Loan in It’s a Wonderful Life. Like George Bailey’s outfit, mutual banks are owned by depositors, not shareholders. They use the deposits made by local customers to fund loans in the local area. Walden Mutual updates this model by taking it online, and focusing on providing loans to the region’s sustainable food businesses.
The mutual bank structure has been around New England for over two centuries, beginning with Provident Institution for Savings, chartered in Boston in 1816. Massachusetts still has 92 mutual banks, the most in the country. However, many depositor-owned banks have converted to a shareholder-owned model over the years.
Walden Mutual represents a first-in-a-generation new charter for a mutual bank. It will be headquartered in Concord, New Hampshire, and serve depositors and borrowers throughout New England and parts of New York.
Charley Cummings, founder of Walden Local Meat Co., is also responsible for starting Walden Mutual. Although the two companies share similar names, they’re separate entities. Cummings left his position at Walden Local in 2021 to become CEO at Walden Mutual.
Cummings was drawn to farming when he and his wife relocated from California to the Boston area in 2013. After an MBA, a stint in management consulting and work with a nonprofit dedicated to creating the country’s first off-shore wind farm, Cummings created Walden Local. The sustainable meat share company now partners with farms across New England and New York and delivers pasture-raised meat to homes from Portland, Maine, to Central New Jersey (and, in the interest of full disclosure, acts as the distribution service for Edible Boston and Edible Worcester. Chances are, the copy you’re holding in your hands right now was delivered by a Walden Local driver).
“I’ve always been pretty passionate about sustainable energy, agriculture and waste and how those intersections can contribute to climate change and other environmental problems. That’s the lens through which I started Walden Local. It was really the opportunity to utilize available land in the Northeast for its most productive economic and ecological use,” Cummings says.
When he was working first to establish, then to grow Walden Local, Cummings came to understand the financial gaps that exist for small farmers and other local, sustainable food businesses that operate outside of the industrial food system.
“It became clear that there’s not a lot of infrastructure to support farms and farmers. That’s true from a financial perspective. It’s true from a physical infrastructure perspective. It’s true from a market perspective,” Cummings says.
As Walden Local expanded and matured, Cummings used his experience and knowledge to begin lending to supply chain partners. He sees the new depositor-owned bank as means to extend that same financial support to many kinds of local food businesses, filling a gap created by commercial lenders. He hopes that Walden Mutual will support the local food system broadly, lending to all kinds of agriculture and food businesses that connect farms and consumers.
“Our intention is not just to support production farms, it’s to support the functioning of the whole ecosystem,” he says.
That could include lending to next-generation farmers who need a mortgage to purchase land or convert an existing farm to organic; a pet treat company looking to buy underutilized food and save it from waste stream; or a company providing solar power generation for farms. Walden Mutual is also looking to help businesses with more everyday financial needs such as borrowing for working capital, new equipment purchases or inventory. Cummings says Walden will look to make loans in the $50,000 to $3 million range.
“There are a lot of things that make the food business unique. And a lot of those elements are things that existing commercial banks can be fearful of. But being comfortable with the ins and outs of the food business allows you to come in with a differentiated level of credit understanding,” Cummings says.
The team Cummings has assembled brings experience both in banking and running food businesses. Dealing with co-packers or perishable inventory is familiar territory for these bankers and will help Walden Mutual better assess the risks associated with sustainable businesses.
Cummings’ team includes Tim Joseph, who founded Maple Hill Creamery. Joseph is a member of the Walden Mutual board. Like Cummings, he has firsthand experience in the industry. Joseph remembers that starting Maple Hill, he was in a difficult position. He was an inexperienced farm owner holding down an off-farm day job and needed to deal with lenders to help keep his business moving forward.
“People who are in organic, regenerative, natural, B Corp businesses, we’re kind of the weirdos and don’t get the same respect or interest or attention from typical ag lenders as a big conventional dairy farm milking 2,000 cows,” Joseph says.
In his role with Walden Mutual, Joseph will use the experience he’s gained running Maple Hill to assess loans and help build a portfolio of borrowers in the region.
“The idea that Walden is totally focused on these sorts of operations makes people feel good about borrowing here. You want to be around like-minded people,” Joseph says.
Another veteran of the New England food business who serves on the Walden Mutual board is Bob Burke. He runs Natural Products Consulting, a business that helps bring natural, organic and specialty products to market. He also worked as vice president of sales and corporate development in the early days of Stonyfield Farm when the organic food legend was still struggling to break even and make payroll.
“We would have killed for something like this,” Burke says.
Burke will also be helping assess risk factors with Walden Mutual clients. He likens the way that they will consider the impact of their loans to the ways that B Corporations focus on meeting the highest standards for social and environmental performance, and balancing profit and purpose.
“In a B Corp, you’re making business decisions based on impact on the community, the environment, employees, suppliers, all that. I think we’re going to be doing the same thing. Not just considering, ‘Can this can be a profitable loan?’ If we think we can be making a broader social impact on the local economy or economic development area, that’s going to be a key part of everything,” Burke says.
Cummings agrees that positive impact is an important part of the bank’s mission, and that it marries well with the depositor-owned model. He sees the opportunity to make an environmental and social contribution as a big potential draw for the depositors Walden Mutual will be courting in southern New Hampshire and the greater Boston area.
For now, the bank is raising capital the same way a predecessor might have done 200 years ago. They are approaching special depositors who agree to keep their money invested in the bank for a period of time. Those deposits, plus some seed capital, are what the bank will use as it begins making loans.
“I love being able to say to a potential depositor, ‘Hey, there’s nobody else here. We work for you, period.’ And if we’re profitable, we want to find ways to deliver those profits to our owners, whether that’s in the form of higher interest on your savings, lower fees, a year-end dividend or any number of other ways,” Cummings says.
All three agree that characteristics of the New England and upstate New York local food market make it distinct from other parts of the country and an especially receptive location for the depositors and companies Walden Mutual seeks.
“I’m anxious to see how we can utilize the cross section between the farming, agriculture and food production side and people who want to let their money sleep at night in a place aligned with their values,” Joseph says.
Proximity to large markets in Boston and New York has always been an advantage for the region’s farmers and producers. Cummings notes that after years of decline, New England has seen a resurgence in agricultural activity over the past decade. Unlike other parts of the country the average age of farmers in New England is declining and the number of farms increasing.
New England’s tradition of smaller farms has remained somewhat consistent, providing the size of business that works well for the mutual model. As Joseph notes, “There’s a lot of baked-in size in New England. This farm had 160 acres since 1765, so that’s what it has now.”
These factors helped businesses like Walden Local, Maple Hill, Stonyfield—and more—succeed. With the help of Walden Mutual, more may be following in their footsteps.
Joseph imagines a future company picnic where Walden Mutual depositors can see and taste the progress their investments have produced.
“Come and eat a hamburger from the farm that Walden Mutual is helping. I think this is going to be really interesting to watch. I think there will be a lot of surprises in what it will do,” Joseph says.
This story appeared in the Spring 2022 issue.
