Cape Cod Five Cents Savings Bank, with $1.4 billion in assets, issued a total of 2,550 loans in 2004 worth more than $500 million. It was ranked No. 36 among the state’s top 50 lenders last year.
In 2004, community banks were major players in the mortgage industry. Among the top 50 lenders in Massachusetts last year, nine community banks held their own against larger banks and national mortgage companies, based on the number of total mortgages.
According to information compiled by The Warren Group, parent company of Banker & Tradesman, Fleet Mortgage was No. 1 with more than 46,000 mortgages totaling more than $6 billion. Citizens Mortgage Corp. was second with approximately 27,000 loans totaling more than $5 billion.
Eastern Bank, a $5 billion institution, was the highest-ranking community bank, No. 19, with 4,400 loans totaling more than $960 million.
Even with competition like Wells Fargo and Sovereign Bank, smaller community banks managed to take some top spots in 2004.
Cape Cod Five Cents Savings Bank, with $1.4 billion in assets, issued a total of 2,550 loans in 2004 worth more than $500 million. It was No. 36.
James Hastings, senior vice president of residential mortgage lending at Cape Cod Five, said because of the property diversity on the Cape, there is more lending business. The bank finances beach cottages, condominiums and oceanfront mansions, as well as many second homes.
For more than a decade, Hastings said, Cape Cod Five has been the top lender in Barnstable County – and with recent bank mergers, things are only looking up for the bank.
“Our market share has benefited from acquisitions,” Hastings said.
Cape Cod Bank & Trust was acquired by Banknorth Group. Before that, Hastings said, the local bank was a good competitor. Compass Bank recently was acquired by Sovereign Bank, which Hastings said had some impact on Cape Cod Five’s lending business. Rockland Trust’s acquisition of Falmouth Bank also changed the mortgage landscape.
Because of the bank’s history on the Cape, Hastings said people return to the bank for their lending needs, which contributes to their lending success.
“We are really an institution that people know and trust,” he said. “We just service this market [Cape Cod].”
Cape Cod Five has a strong presence on the lower Cape, Hastings said, and is dominant in the mid-Cape area. Before CCB&T was acquired, Hastings said Cape Cod Five and CCB&T competed on the mid-Cape.
“The competition down here goes in waves,” Hastings said.
Hastings lists Cape Cod Co-operative Bank and Seamen’s Bank as two local competitors.
Like most lenders, Cape Cod Five saw a boost in its non-purchase mortgages with more than 2,000 loans last year. Hastings said the bank began to focus more on purchase money mortgages in 2004. The bank financed 507 purchase loans last year.
“This part of Massachusetts has been doing well,” Hastings said.
‘Franchise Value’
Farther north in Massachusetts, Salem Five Cents Mortgage Corp., an arm of Salem Five Bank, a $1.7 billion institution, also enjoyed strong mortgage business in 2004. The company was the No. 25 lender in Massachusetts last year with more than 3,500 loans totaling more than $880 million.
Ed McDonald, president of Salem Five Cents Mortgage Corp., said the company focuses strictly on retail lending in Massachusetts and New England.
According to McDonald, there are few factors contributing to the success of Salem Five Cents Mortgage. The mortgage company is Fannie Mae’s largest seller and servicer of loans based in the Bay State.
Salem Five Cents Mortgage is also New England’s biggest construction and rehabilitation lender, McDonald said.
Despite its local approach, McDonald said Salem Five Cents Mortgage competes with national companies, like Wells Fargo and Countrywide Home Loan. He said competition varies from town to town on the North Shore.
“Competition is fragmented,” McDonald said.
On the South Shore, Rockland Trust, a $2.9 billion bank, is undertaking a makeover from calling itself a community bank that offers mortgages to a dominant mortgage lender, said Anthony Paciulli, managing director for Rockland Trust’s residential mortgage division.
“We’ve got the Rockland name and franchise value,” Paciulli said, adding the bank hopes to capitalize on the name and grow the mortgage business.
The new approach appears to be paying off. In 2003, Rockland Trust was No. 39 based on the total amount of mortgages. In 2004, it moved up to No. 27 with more than 3,200 loans worth approximately $770 million.
The bank is addressing a few specific areas in order to be a stronger competitor. Paciulli said the bank is focusing on providing a diverse array of products. Laptop originators, automated underwriting and automated appraisals are part of Rockland Trust’s focus on technology. Product and technical training for bank employees is intended to create a sales force that can bring in additional business. Paciulli said because of such tactics, the bank is able to compete with national players.
“You really compete with everybody,” Paciulli said.
Paciulli mentioned Countrywide and Washington Mutual as national competitors. Local competitors include Eastern Bank and Plymouth Savings, which was recently acquired by Eastern.
Paciulli considers Cape Cod Five as a competitor and said CCB&T, before its acquisition, was a tremendous player in the market.
Paciulli said he was disappointed with Rockland Trust’s ranking in 2004. He said because of the bank’s footprint and franchise, he thought the bank could do better. He predicted that the bank’s lending business would grow by 20 percent in 2005 and overtake some of the other lenders. Part of that strategy will include opening an office in the MetroWest area in 2005. Currently, the bank has no footprint there.
In 2004, Rockland Trust opened a loan office in Brockton, another in Quincy and one in Hyannis.
Other community banks making the top 50 in 2004 include Plymouth Savings Bank at No. 31 with approximately 2,800 total mortgages and Compass Bank for Savings with more than 2,000 total loans. Boston Federal Savings Bank, No. 38, originated more than 2,500 loans worth approximately $513 million.
On a national level, Wells Fargo was ranked No. 4 with more than 20,000 loans. Washington Mutual followed with a total in excess of 14,000 loans, placing it at No. 5.
Jennifer Jope may be reached at jjope@thewarrengroup.com.
