Cape Cod Five Cents Savings Bank: Working to stay No. 1 in Cape market
Dorothy Savarese had barely began her tenure as CEO of Cape Cod Five Cents Savings Bank before encountering the brew of challenges facing her entire industry. She also has had to maneuver within an increasingly competitive market that includes not only arriving mega banks, but also a new community bank whose CFO once worked with her at Cape Cod Five.
Despite all that, Cape Cod Five has managed to extend its No. 1 position in consumer banking at a time when overall bank deposits are shrinking across the market. Part of that success is attributed to recent branch expansion into Falmouth, Sandwich and Eastham.
Next year, Cape Cod Five will open its first branch in Dennis, joining a growing number of competitors around Exit 8 of Route 6.
It also has substantially grown its commercial, government and trust/asset management businesses – good news considering that the bank’s historic strength in residential lending has eroded some due to competition from mortgage brokers and loss of volume during the housing slowdown. At the same time, the bank has maintained its No. 1 market share position in this increasingly competitive environment.
Commercial lending, an important and growing part of the bank's business, has seen 18 percent growth year-to-year and now represents a quarter of all lending.
Maybe the most significant development at Cape Cod Five in the last three years has been its growth as a wealth management adviser, buoyed by recruitment of several former CCB&T executives when that bank was acquired by TD Banknorth.
Its Trust and Asset Management Building at 20 West Road in Orleans opened in November 2005 – Savarese’s first year as CEO after she succeeded Elliott Carr, who held the job for nearly a quarter-century. Assets under management at that time were about $325 million. Currently, they stand at approximately $450 million.
Customers usually are those with $500,000 and above; for those with less money to manage, Cape Cod Five continues to offer brokerage services through its Investment Services division, which is more transaction-oriented, focusing on stocks, bonds, mutual funds and annuities.
Since Savarese became CEO, she has recruited key executives to lead technology, residential lending and finance.
Staying ahead of the pack, Cape Cod Five has relied on several key strategies:
• Marketing its community roots and independence, in part by managing its own charitable foundation that nourishes nonprofit activities across the Cape.
• Investing heavily in technology and Internet banking, a key necessity for any community bank intent on holding off rivals like Bank of America and Citizens. Like most banks, that also includes remote check deposit for businesses – a service coming online shortly.
• Building expertise in the wealth management arena as the Cape’s population of well-heeled retirees and second-home owners continues to grow.
• Identifying the second-home owner as a potential customer, especially in the Lower Cape, where they represent one out of every two residences in most towns. That includes serving snowbirds heading to Florida, who increasingly rely on ATMs and Internet bill paying to avoid using different banks.
• Capitalizing on its Cape identity and a management structure that can be more nimble than rivals that are managed across large geographic footprints.
“People like being associated with a bank that is committed to community,” said Savarese. “Customers say, ‘That is my bank,’ not, ‘The bank that I do business with’ or ‘The bank where my checking account is.’ They have a personal relationship with our institution. Perhaps it is partly emotional, since we are so intimately tied to the community.”
For example, Savarese points to her bank’s engagement in the area of affordable housing. It is the No. 1 lender on Cape Cod for utilizing MassHousing mortgage products that provide reduced closing costs and below-market rates for lower-income homebuyers.
Cape Cod Five has felt the impact of the housing downturn, and before that the invasion of mortgage bankers and out-of-state home lenders. Now, only one in four mortgages is originated at a local bank on the Cape.
“At end of day, residential lending still is very important,” said Savarese. “We see it as a service we provide to customers. We emphasize our knowledge of the market, and we work to make sure our lenders are well equipped to handle the mortgage,” she explained.
“Our ultimate goal is not to just make the loan, but to make the right loan,” she emphasized.
All that makes commercial lending all the more important.
“There was a little lag in business lending at the end of last year,” noted Savarese, “but there has been no real slowdown here, as opposed to the residential side. Businesses are growing, finding new and larger locations – and that represents brand-new customers. In other cases, longtime customers at other banks are unhappy and are switching.”
Savarese points to commercial lending activity in the hospitality arena as well as small entrepreneurs in the service arena.
“Many of them are tapping into changing demographics on the Cape – health care, property management and services folks need as retirees and second-home owners,” she noted. West of Bass River, commercial lending is more business-to-business and construction.
As a community bank, Cape Cod Five serves businesses needing a few thousand dollars to millions. Beyond simply dollars, “we feel we are an important part of a team of strategic partners for that business,” she said. “We like to make our business development officers as accessible as possible.”
Published in Cape Business May/June 2007
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