Cape Cod 5's Welfleet branch. Banker & Tradesman file photo

The top executive at Hyannis-based Cape Cod 5 foresees a “better than expected” drop in profits for the bank this year, given the current economic turmoil pressuring all banks’ finances.

“We’re ahead of where we want to be, both in terms of earnings and deposits,” Cape Cod 5 CEO Matthew Burke said. “Our forecast to finish the year is ahead of where we projected to be. It is a modest decline from last year, but it is ahead of where we want it to be.”

In the first half of 2023, Burke said the bank said its net income reached $11.75 million, while its net interest income totaled to $60.3 million. Total loans ended at $4.65 billion, while total assets amounted to $5.51 billion.

The bank did not disclose figures for the first half of 2022, but according to its 2022 annual report, net income for the whole of 2022 was the bank’s “second highest earnings level on record” at $39.5 million. The bank’s count of total assets ended 2022 at $5.3 billion.

Burke said the bank was aggressive in seeking deposits mainly through offering attractive interest rates in the first half of the year, more so earlier as the state’s banks raced to gather deposits and before the spring’s bank failures which propped up its deposit growth.

“I think all or a very large majority of U.S. banks are living on a lower level of earnings based on the nature of this tightening cycle, but we’re having we’re having a good year,” the Cape Cod 5 CEO said.

Despite the total dollar volume of deposits at American commercial banks dropping 2.23 percent percent from January to June, according to Federal Reserve data, Cape Cod 5 saw deposits grow 4.9 percent in the same six-month period, Burke said, driven by businesses and consumers opting to keep their money safe amid the uncertain economic landscape.

Regulators responded to the spring bank collapses by pushing for higher capital reserves at the largest regional banks, while the high interest-rate environment caused lukewarm demand for loans leaving U.S. banks stuck with high funding costs amid intense competition for deposits.

Burke said Cape Cod 5 continues to engage customers in its focus areas in Southeastern Massachusetts – Cape Cod, Martha’s Vineyard, Nantucket, Plymouth and Wareham – while opening up banking services to all of Eastern Massachusetts area through its digital platform.

The bank has two Plymouth branches which it expects to be operational in the first quarter of next year – one new branch in Commerce Way, and a relocated branch in Pine Hills.