Rockland Trust Co. is preparing to go through its biggest growth spurt in its 93-year history, converting 16 branches from the FleetBoston divestiture next month. The acquisition will increase the bank’s branch network by almost 50 percent, from 34 branches to 50, and will raise its asset base to about $2 billion.
Of all the community banks that bid on branches in the Fleet divestiture, Rockland Trust came out the biggest winner with 10 Cape Cod Fleet branches and two South Shore branches, paying a 12 percent premium on deposits. Rockland will buy another four Cape Cod Fleet branches from Sovereign Bank, which opted out of the oceanside market. Rockland plans to convert all 16 branches the weekend of August 4, opening the new branches for business on August 7.
It is Rockland Trust’s first entry into the Cape Cod market, where it will gain 14 branches overnight. To fund the Fleet acquisition the company raised approximately $10 million in risk-based capital.
“We’re excited about becoming a player in the whole market,” said Senior Vice President M. Casey Davis.
A subsidiary of Independent Bank Corp., the state-chartered commercial bank had $1.6 billion in assets at the end of the first quarter this year. At that size, Rockland Trust billed itself as the largest bank in Southeastern Massachusetts. Its network stretches as far north as Braintree, and will soon go as far east as North Eastham.
Before the bank converts the 16 branches in August, it will introduce new consumer and business product lines in mid-July. The 14 new banking products will replace the bank’s existing deposit accounts. The change should make it easier for former Fleet customers to find an account that meets their needs, Davis said. The product launch will include relationship products that give customers better terms when they use more products at the bank.
“It will also make us much more competitive in terms of product features and pricing,” Davis said.
‘Transitional Snafus’
Despite the size of the undertaking, banking consultant Wilfred Sheehan said the bank is poised to be a strong competitor.
“They have a very competent management team,” said Sheehan, president of Wilfred Sheehan & Co. in Duxbury, a division of Clark/Bardes Holdings. “I think they’ll handle it well. Obviously there’s going to be a lot of transitional snafus and operational problems, but that’s always the case with a conversion this size.”
Rockland Trust will retain the employees at the former Fleet branches, and is hiring additional branch workers at some sites, Davis said. The company has already opened an office in Centerville to facilitate hiring and training.
‘Aggressive Competitor’
The branches in the Cape Cod franchise are situated well to provide Rockland Trust an entry into serving the entire Cape, said President, Chairman and Chief Executive Officer Douglas H. Philipsen. The acquisition includes a small business banking commercial real estate portfolio of $44 million. Rockland Trust has been active in that business for a long time, he said.
In addition to its commercial lending unit, Rockland Trust makes mortgage loans and consumer loans. The bank has asset management and trust services offices in Attleboro and Hanover.
“The bank is a very aggressive competitor in terms of pricing and flexibility in dealing with the credit needs of their clients,” Sheehan said. “They’re going to be tough.”
After completing preparations for Y2K last year, the bank made a complete information technology systems conversion, which it completed in June. The bank also redesigned its Web site this year, which includes online banking and access to investment accounts.
“It’s probably safe to say that it is the busiest year in terms of what we’re trying to accomplish, probably in the history of this organization,” Davis said.
Although Cape Cod is a highly competitive market for banking, the upper part of the Cape is already heavily banked, according to Sheehan. Rockland Trust, which is known as an aggressive competitor in Southeastern Massachusetts, will be a strong competitor for customers on the lower part of the Cape, he said.
“The old Cape, folks that have lived there a long time, seem to be pretty set in their ways and like to do business with Cape banks,” Sheehan said. “Rockland Trust will have some difficulty with the loyalty issue. However, there are an awful lot of new people on the Cape, and Rockland Trust will have a level playing field as far as going after those folks.”
As a big community bank, Rockland Trust’s main competition will come from banks about its size or bigger, Davis said, such as Fleet Bank, Sovereign Bank New England, Citizens Bank and Eastern Bank. Sheehan would add to that list many smaller community banks in Southeastern Massachusetts and Cape Cod, such as People’s Savings Bank of Brockton, Compass Bank, Plymouth Savings Bank, Cape Cod Five Cents Savings Bank, Cape Cod Bank & Trust, Abington Savings Bank and Bristol County Savings Bank.
Bank officials would not talk about Rockland’s future growth strategy, except to say that that bank plans to remain independent. It is more likely that the bank will continue make acquisitions than become a merger target itself, Davis said.
“I see us remaining a publicly traded company, but owned and managed and headquartered right here in Rockland, Mass.,” Davis said.
Independent Bank Corp. reported a 10 percent increase in earnings in the first quarter of 2000, with $4.23 million in earnings compared to $3.85 million in the first quarter of 1999.
The company’s stock is listed as INDB on the NASDAQ exchange. Its 52-week high reached 15 7/8, while the lowest point was 9 1/2. The stock closed at 10 1/2 on June 26.
