Based in Harwich Port, the 150-year-old Cape Cod Five Cents Savings Bank has 12 branches located throughout Barnstable County.

The 1800s were a different time on Cape Cod.

Horse-and-buggies crowded the streets, parasols and top hats accessorized fashion, five-and-dime stores adorned the streets of Barnstable County and welders, ironworkers and farmers made an honest living.

The 1900s saw two World Wars, the Depression and an unprecedented upsurge in technology. One bank on the Cape witnessed it all.

After 150 years of service, Cape Cod Five Cents Savings Bank retains its community focus, serving a clientele that is now as likely to be part of the region’s thriving tourism trade as any other industry.

But now, in the midst of a wave of bank mergers and acquisitions that has seen large banks establishing footholds that extend to the most insular, remote and parochial regions of New England, including southeastern Massachusetts, even the most established traditional institution must wrestle with the realities of survival in a vastly changed landscape.

According to Cape Cod Five executives, commitment is the key to preserving the tradition of community banking in an area suddenly beset by banking behemoths.

“It’s about history,” said Ronald E. Reed, treasurer and executive vice president of the $1.3 billion-asset, state-chartered mutual bank. “We talk about mutuality and we focus on independence. One of the things that this bank focuses largely on is that we are independent, we are responsible to our community, the customer and our employees, and we run the bank that way.”

Cape Cod Five currently holds the top banking market share in Barnstable County, but maintaining its position in the future will involve a whole new set of challenges involving a new breed of competitor.

Of the 16 locally controlled banks that operated on the Cape 25 years ago, only three remain – Seaman’s Bank in Provincetown, Cape Cod Cooperative Bank in Yarmouth Port and Cape Cod Five Cents Savings Bank, based in Harwich Port.

Cape Cod Bank & Trust was acquired by $26 billion-asset Portland, Maine-based Banknorth Group late last year. In January, $46 billion-asset Sovereign Bancorp of Philadelphia, another large regional player, acquired New Bedford-based Seacoast Financial, parent company of Nantucket bank and New Bedford-based Compass Bank, which has a substantial Cape network. That same month, Falmouth Bank was acquired by Independent Bankcorp, parent of Rockland Trust. The combined entity will boast about $2.6 billion in assets.

In addition, with the Bank of America’s pending acquisition of FleetBoston Financial, which has a presence on Cape Cod, not only are the largest of New England’s banks entering the Cape market, but also one of the nation’s largest institutions.

“I believe that southeastern Massachusetts is a darling with regard to profitability, in general, and with what the market is going to offer,” said Frank Aloi, founder of ath Power Consulting in Andover, which provides strategic direction for Bay State banks. “Banking, in general in Massachusetts, has a lot of saturated markets and some of the areas that are viable right now are southern Massachusetts and Connecticut and that would be why bigger banks are going that direction.”

Building a Foundation

Even with the presence of much larger banks entering the area, Cape Cod Five executives said they remain committed to their customers and the region, and the community bank prides itself on being able to remain true to its roots and mission – and stay competitive – amid the merger activity.

“Other banks coming in are a wonderful advantage to small banks. With increased technology, we can offer the same services as the big banks can and most folks will want to do business with a local company as long as they can get comparable service,” said Reed. “We are very much based on Cape Cod and have expansion plans on Cape Cod, and we plan to strengthen our presence. There are opportunities for us across the board.”

Reed said the bank is constantly looking at new initiatives and new investments in the community in order to expand the bank’s presence while at the same time remaining a strictly community-based bank.

In January, Cape Cod Five introduced trust and asset management services to its clientele and, according to Reed, the bank “received favorable responses from customers and we are moving forward with new initiatives.”

But it takes more than new initiatives for small banks to stay afloat in today’s banking marketplace, according to some industry analysts. Mergers and the appearance of big banks in certain markets can even mean greater opportunity for community banks that are able to successfully differentiate themselves from their larger brethren.

Aloi said smaller financial institutions should focus on communication, education and a sound business strategy in order to win customers from larger banks.

“The No. 1 desire of retail consumers and small-business consumers is convenience, so a lot of small banks are really communicating the convenience of banking with them” by reminding consumers of the bank’s participation in the SUM network (a selective surcharge program designed to help consumers minimize the costs associated with using ATMs), insurance and investment services, online banking services and bill pay features, said Aloi. “A lot of these features are available from small banks but it is not communicated to their consumers.”

Gordon Wright, vice president and marketing director of Cape Cod Five, said the bank recently introduced a mortgage application system that is “completely electronic, and supports the theory that we are able to keep up with big banks.”

Aloi also said that having a well-educated staff on hand can help smaller banks outperform a larger bank.

“Having internally educated staff in general banking and competitor information, but also educated in the bank’s own information, is important. The better trained these individuals can be, the better they can help the consumers,” said Aloi.

Aloi said smaller banks are in a good position with the recent wave of acquisitions because employees who are let go from their jobs due to merger-related consolidation will be seeking other employment and often are very well educated in banking and finance, bolstering the ranks from which community banks can recruit.

Another critical strategy component needed for a community bank to survive as its competitors merge and grow larger is community involvement, said Aloi.

“Anytime there is a community bank and they see a large bank coming in, there has been so much shakeup in those acquired banks [that] it’s a prime opportunity to go advertise in the market and explain why the [small] bank has been around so long and promote the bank’s community involvement,” said Aloi. “On the back of soccer league jerseys are community bank names – they are the ones [giving] back to the community.”

One way Cape Cod Five demonstrates its allegiance to the Cape community is through the Cape Cod Five Foundation, a wholly independent agency started by the bank in 1998 that supports nonprofit groups throughout Cape Cod and beyond.

Because of the stock ownership Cape Cod Five had in both Cape Cod Bank & Trust and Falmouth Bank, the Cape Cod Five Foundation inherited profits from the sale of both of those banks and today holds over $12 million in its foundation fund.

“Because the bank owns stock in other banks, when those banks are sold Cape Cod Five gets some profits Ö so we [inherited] some more money into the foundation,” said Reed.

The Cape Cod Five Foundation is made up of officers of the bank, trustees, corporators and employees, and the foundation has donation advisory committees that deal with various areas including culture and art, economic development, conservation and environment, youth and education, and health and elderly services.

“We continue to hope to be able to grow [the foundation]. The target is to disperse at least 5 percent of the assets each year, which equates to about $500,000 each year,” said Reed. “It’s been a wonderful job for philanthropic activity on Cape Cod. It’s an effort to give back to the community.”

As the banking landscape continues to change, banks must also adjust their strategies to appeal to the community, said Aloi, and his best advice to banks is to stay on top of the changes.

“If they [Cape Cod Five] want to survive and be a community provider, it’s a strategy that is profitable” if the bank is able to advertise to the right demographic of people, said Aloi. “There are certain people on the Cape who will forever want a community bank atmosphere.”

As for the bank itself, Reed said, “this is a pretty exciting time for us with the change in the [competitive] landscape, and the bottom line is that we strengthen our independence. We are the only bank that hasn’t changed names in the past 10 years.”

Next up for Cape Cod Five Cents Saving Bank is its new advertising and marketing campaign with a new slogan that says, “Discover the good feeling of knowing your checking account will never be sold again.”

According to Reed, “Our plans are to make it a long future.”