TD Banknorth: New CEO, new structure
by Glenn RittWhile some rivals are expanding their operations on the Cape, TD Banknorth is contracting. It’s part of a companywide evaluation of its branch network across the entire Northeast and Mid-Atlantic after years of rapid-fire acquisitions that included Cape Cod Bank & Trust.
As a result, TD Banknorth has laid off about 400 employees companywide, including seven on the Cape. Among 24 branch closings are two in Massachusetts – one in Marion and one at 3206 Route 6A in Barnstable.
Growth has been challenging on the Cape since TD Banknorth acquired CCB&T more than three years ago. It has lost its No. 2 market share for deposits to Citizens Bank. Meanwhile, community-based banks have picked up share despite an overall shrinking market. Also, a chunk of its wealth management business moved to other banks, particularly Cape Cod Five Cents Savings Bank, which hired several key CCB&T trust and asset managers two years ago.
TD Banknorth’s consolidation comes as banks are facing a bevy of challenges – some unprecedented. In Massachusetts, consumer deposits are down across the marketplace as people move money from savings accounts and CDs back into the stock market.
More significantly, banks are confronting an inverted yield curve, which is severely pinching profits at a time when residential mortgage and refinancing businesses are suffering in the midst of the housing downturn.
Meanwhile, branch operations are particularly expensive at a time when banks must also invest heavily in technology.
The layoffs come, ironically, at a time when TD Banknorth had begun to stabilize after substantial adjustments in the wake of the CCB&T acquisition.
While its share of deposits declined each year, TD Banknorth has been making strides recently in its wealth management and commercial lending operations on the Cape. It also has worked hard to tie its insurance arm more closely to a corporate brand that signals “full service” for businesses.
“It’s obvious to us that as more time goes by, the acquisition is working in our favor,” said Larry Squire, co-president of the Cape region, in an interview two weeks before the branch consolidation and layoff announcement. TD Banknorth is the No. 1 wealth management bank in Canada, and Squire sees that expertise spreading to the Cape’s wealthy marketplace.
“We are beyond being defensive about whether we are community bank. There’s virtually nothing we can’t do in the financial services business,” he emphasized. “There is an expert somewhere in the company to rely on.”
“It’s no secret that all banks are facing a challenging environment,” noted Co-President Bert Talerman, who focuses on commercial lending. It’s particularly so on the Cape, which has one of the most concentrated markets nationwide of bank branches per capita.
“It’s hard to make money on one individual piece of business,” he observed. That gives larger institutions like TD Banknorth a potential advantage because it can offer customers the widest selection of services.
“We are much better prepared now to serve customers whether as consumers or businesses,” said Talerman.
“We view ourselves increasingly as a general practitioner does in medicine,” said Squire. “We build up a relationship and point that client to one of our specialists – all under one roof. The environment on the Cape speaks to multiple relationships between home and work” – mortgages, investments, insurance, business payrolls.
Talerman points to another advantage beginning to pay dividends: The TD Banknorth brand is pervasive through much of New England and the Mid-Atlantic, where tens of thousands of Cape Cod second-home owners have their primary residences.
“When people move or retire here, they recognize our brand and are encouraged to bank with us,” said Talerman. “And many folks buying second homes here already do business elsewhere with us, and there is no need to change the banking relationship.”
Beyond commercial lending, TD Banknorth is emphasizing business services. Talerman and Squire point with particular satisfaction to the way their company markets products to relate specifically to the daily challenges encountered by companies, especially small businesses.
The idea is to emphasize the team approach to filling customer needs, utilizing the various business lines to do so.
Most products are available at most banks, they concede. The key increasingly is to frame them around the concept of business services – and then deliver.
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. 
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