Cape Cod Cooperative Bank: Moving to bigger headquarters
by Glenn RittThis spring, Cape Cod Cooperative Bank moves into its new operations center in Independence Park, making Hyannis its headquarters – and selling its smaller, longtime Willow Street location to the Bilezikian family, former owners of Christmas Tree Shops.
Despite shrinking deposits for all banks across the marketplace, Cape Cod Cooperative has managed to slightly improve its share of consumer business over the last year – studiously sticking to a relatively conservative growth plan. Its bottom line: Do what it does well, and hold onto loyal customers.
“We actually have been able to maintain growth while others were losing it,” said CEO Joel Crowell. “I cannot tell you we were that much smarter than the rest of the world.”
That self-effacement comes with the understanding that the banking industry is struggling on many fronts. Overall profits are down slightly among most banks.
“We are still growing, dollar-wise. But as a percentage, [profits] are slightly less,” Crowell said. “We were in the high .80 range in return on assets. We are into the .70 range, and we see a large percentage of the competition in the .60 and .50 range.”
While his and other banks continue to experience a weak residential mortgage market, Cape Cod Cooperative’s commercial loans are growing at what Crowell calls “a pretty strong pace.”
With its new operations center and a growing branch network to the west, Crowell is most intent on maintaining Cape Cod Cooperative’s strong reputation as a local bank that can still match the services of his larger rivals.
“We would like to continue to sell ourselves as a bank that is both high-tech, high-touch. What we are doing is selling relationships and trying to make sure we are expanding with our existing customers, while continuing to introduce ourselves to new people.”
To make his point, Crowell points to the way Cape Cod Cooperative reacted to the recent credit and debit card security breach involving TJX, parent company of T.J. Maxx and Marshalls.
In January, TJX confirmed an unauthorized intrusion into its computer systems that process and store information related to customer transactions. Banks of all sizes immediately began to reissue cards to customers affected by the breach.
“We attempted to personally call every customer affected – there were about 2,000 – and, in essence, reissued their cards. I recently returned from a conference where I learned some regional banks were just not dealing with the issue at all. Others simply prepared call centers for concerned callers. We think we are ahead of the curve on these customer service issues.”
The hometown touch, however, can go only so far in this highly competitive market, conceded Crowell. Thus, Cape Cod Cooperative is moving on several fronts:
• It is reaching out to new markets, especially in Mashpee, which is close to its Sandwich office. It is also moving into parts of Yarmouth that it had not served before. Expect additional branch development in coming years.
• It recently established a holding company that should pay dividends in the future. This strategy should position Cape Cod Cooperative to borrow enough money in the future to bid for other banks’ branches – if and when there are new acquisitions and mergers and some offices must be divested.
• It has hired Mary Miller from TD Banknorth to improve both its visibility and marketing on the residential lending side. “We were hearing on the street that people thought our pricing was higher than we believed it was. That is a function more of how we have presented ourselves,” said Executive Vice President Steve Lowell. (Its residential portfolio has grown from $165 million to $200 million over the last four years.)
• Like many of its competitors, it has substantially expanded its commercial lending business. Four years ago, it reported about $70 million in commercial lending; by March, it had nearly doubled to $125 million.
“Over the last few years, we have seen an annual growth rate of 16 percent,” Crowell said. “This year, we see about 8 percent. We went from two to four commercial lenders to stay ahead of the demand. We doubled our capacity before we were really ready to, because of market consolidation and because people were not satisfied. The business takes patience. It is one knock on the door at a time. Sometimes, you get a call back right away. Sometimes, it will take six to eight months.”
With his long history at Cape Cod Cooperative, Crowell recognizes that success will depend at excelling in the basics and not getting ahead of its $450 million asset base.
“We have looked at the insurance business, for example. Candidly, I am not convinced it has been done successfully in many places. The cultures of the two organizations are often very different.”
On the other hand, he looks admiringly at Rockland Trust’s recent acquisition of a 1031 Qualified Intermediary agency to help grow income and support clients selling commercial property – including second homes – without suffering immediate capital gains taxes.
“I hope I am smart enough not to rule out this or other similar possibilities in the future,” Crowell said.
Like other smaller banks, Cape Cod Cooperative has been very aggressive on the technology front, Lowell reported. “We have 8,000 debit cards in the market. We have 3,000 customers who are heavy electronic banking users. We are constantly looking to add services and improving our online services. Customers want to have more convenience. On the commercial side, we have deposit image capture.”
More than 50 percent of its customer transactions are done electronically, ranging from transfers between accounts to automated payments to vendors. Compare that to 5 percent or 10 percent of all transactions five years ago.
At the end of the day, however, customers want to know they can talk directly with managers. “That means [even] call center personnel must be empowered to deal directly with customer concerns,” said Crowell.
Published in Cape Business May/June 2007
Glenn Ritt Glenn Ritt is editor and co-publisher of Cape Business Publishing LLC. He is the former publisher of Cape Cod Community Newspapers and editor of The Bergen Record in New Jersey. 
Cape Business Newsletters
Keep up with the latest issues affecting your business and your life! To sign up for any of the Cape Business newsletters, click here.