William P. Hourihan Jr. isn’t a local, exactly – but the mainland native rose to become CEO of Nantucket Bank, and has been working on the island for nearly 40 years. By now, he’s likely learned all there is to know about the island’s challenging banking scene.
Cape Cod Five Cents Savings Bank is betting on that. It recently hired Hourihan and made him regional president for Nantucket, putting him in charge of coordinating its local efforts to ramp up business on the island. With one small branch already on Nantucket, the $1.9 billion asset institution is planning a downtown location as well.
Cape Cod Five is based in Harwich Port, but CEO Dorothy Savarese told Banker & Tradesman the institution is well-placed to be the de facto “hometown” bank for the island. After all, Nantucket customers have only two other options: Bank of America and Hourihan’s Nantucket Bank, which despite its name is currently a division of Sovereign Bank. Hourihan was CEO of the institution when it was bought the first time, by Seacoast Financial Services Corp. in 2000, and was most recently the market CEO for the bank under Sovereign.
Nantucket banking does come with a few challenges: Land is pricier, and calling the population and business scene “cyclical,” is an understatement. The population swells from 10,000 to 40,000 during warmer months, Hourihan said, and many businesses are in seasonal industries, such as hospitality or entertainment. That kind of lending environment requires a lot of experience, he explained, because a lender has to know what to expect for borrowers who see their income fluctuate so wildly.
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And Cape Cod Five itself isn’t new to that sort of lending, noted William Kozak of Rockport-based bank consultancy WTK Assoc. The bank probably sees parallels between Nantucket and its locations around Cape Cod, and figures the services would match up pretty closely. Also, “Cape Cod Five,” has a much better ring to it than “Bank of America” in terms of hometown banking, he added.
Christopher Wells, CEO of Martha’s Vineyard Savings Bank, agreed. He’s now head of a bank on an island similar to Nantucket, and also worked for the former BankBoston when it purchased Nantucket’s Pacific National Bank in 1997. Wells said he himself aided the integration of the bank into the much larger acquirer.
Although the merger went smoothly, he said, the experience showed him the importance of the community bank to customers. In the years afterward, Fleet Bank and then Bank of America took over what had once been the locally based Pacific National. Nantucket Bank was sold to Sovereign in 2004. Sovereign itself was purchased by Spain’s Banco Santander in 2009.
A local bank can offer more carefully tailored products and can make hands-on decisions on site, Wells said. With every bank merger, Nantucket’s customers got a little farther away from that. With Hourihan heading Cape Cod Five, Nantucket customers will only have to make the short trip to Harwich Port to sit across from the bank’s top executive.
Martha’s Vineyard experiences the same issues as Nantucket, Wells added. Both are cyclical economies relying heavily on businesses, such as bed & breakfasts or other hospitality businesses that are “not typically at the top of the lending prospecting list,” for many institutions, he said.
Lenders are willing to shell out their cash to Nantucket businesses, Hourihan said, but the difference is always whether those lenders are savvy to the island’s ebbs and flows. Savarese said Cape Cod Five was looking to expand its currently “modest” branch on the island, and keep its locations staffed with knowledgeable people.
“We’re working really hard to bring into our team people who have long experience on the island and understand the local needs,” she said.
