Cape Cod Five Cents Savings Bank, the dominant regional bank on the Cape, is taking steps to enlarge its foothold on the Island with plans to open a full-service branch in Vineyard Haven by next summer. The move comes less than two months after Martha’s Vineyard Savings Bank opened its second outpost on Cape Cod, near the Steamship Authority parking lot in Falmouth. The bank has had a Woods Hole branch since 2009.
Cape Cod Five announced Monday that it had purchased 412 State Road in Vineyard Haven, the old Coca Cola bottling plant located between Radio Shack and Shirley’s Hardware, and plans to convert it into a banking center. Property records show the bank bought the building last week for $2.6 million from Elio Silva, owner of Tisbury Farm Market, who as recently as two years ago had plans to turn it into a larger grocery store.
In June, Cape Cod Five named well-known Island banker Richard Leonard as regional president for Martha’s Vineyard. Mr. Leonard, a West Tisbury resident and a longtime community banker, was president of Martha’s Vineyard Cooperative Bank before it merged with Martha’s Vineyard Savings Bank in 2007. He retired last year as the savings bank chief operating officer.
With more than $2.5 billion in assets and 17 full-service branches from Marion to Wellfleet, Cape Cod Five is the region’s largest independent bank, although the national giant Bank of America has a strong presence on the Cape. Cape Cod Five opened its first branch on Nantucket in 2011 and opened a new branch there last year
While Cape Cod Five already operates a small loan office in Vineyard Haven, the new branch will provide a full range of banking products, from small business loans, residential and commercial mortgages, wealth management and retail banking services for individuals, said Robert Talerman, the bank’s executive vice president in charge of lending.
“Looking at the competitive landscape, we think that what we offer is unique enough that there is a spot for us in the marketplace,” Mr. Talerman said in an interview Wednesday. “We base our decisions on growing into new areas where we already have customers, so we aren’t just throwing a dart and saying we want to have an office here.”
In terms of assets, Cape Cod Five dwarfs Martha’s Vineyard Savings Bank and the other community bank on the Island, Edgartown National Bank. According to the most recent FDIC reports, the savings bank had total assets of $554 million as of March 31 and Edgartown National had assets of $161 million. Santander Bank, a global bank that formerly did business in the U.S. as Sovereign, maintains five branches and one ATM machine on the Island. Bank of America does not have a formal branch, but maintains an ATM machine in Edgartown at the Triangle intersection.
Paul Falvey, president and chief executive officer of the Martha’s Vineyard Savings Bank, said being smaller has its advantages. Federal banking laws give more flexibility in loan approvals to community banks with less than $1 billion in assets, he said. For more than a year, the savings bank has retained 100 per cent of the residential and commercial loans it originates, rather than reselling them, so that the bank keeps a direct relationship with its local customers.
And Fielding Moore, president and chief executive officer of Edgartown National Bank, which opened a new Oak Bluffs branch on Circuit avenue in June, noted that the Island economy is well suited to small local banks.
“It’s a function of what the marketplace requires,” he said. “The makeup of the commercial business on this Island is small businesses. You don’t need to be a three billion dollar bank to accommodate their needs.”
In a telephone interview, Mr. Leonard said he joined Cape Cod Five in part because it has “a set of values that matches” the community needs of Martha’s Vineyard. The bank was founded in 1855.
Philanthropy and community service figure prominently in the bank’s ethic, said Mr. Talerman, who noted that Cape Cod Five and its community foundation gave nearly $1 million to community organizations last year in towns where it does business. The bank also prides itself on providing educational programs for students and consumers, he said.
“Banking is a competitive business,” he said. “We think we offer a form of banking that is good for the customer, good for the community and good for our employees.”
Mr. Falvey noted that Martha’s Vineyard Savings Bank has been “competing very heavily” in Falmouth. “They are certainly aware we are competing, and we’re doing very well,” he said of Cape Cod Five.
Still, the Vineyard remains its stronghold.
“There is no bank that is close to being as imbedded in the community as we are,” Mr. Falvey said. “We have 110 employees, about 100 of which are Island residents. We’re not trying to force people to go to ATMs or online banking. We have a customer base that really enjoys coming and going and doing their banking face to face. You just can’t duplicate that.”
Mr. Talerman said Cape Cod Five has just begun to assess what it will take to convert its new Island property into a branch office, but hopes to open by next summer. The new branch will likely add more than five new jobs to the Island, he said.
“We understand the challenges of a seasonal economy,” he said. “Ultimately it’s about empowering people to make the best decisions for themselves.”
Jane Seagrave contributed reporting.