.About a year ago, Fidelity Bank Chairman and CEO Edward Manzi began working on a deal with Matt Burke, his counterpart at Hyannis-based bank Cape Cod 5.
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About a year ago, Fidelity Bank Chairman and CEO Edward Manzi began working on a deal with Matt Burke, his counterpart at Hyannis-based bank Cape Cod 5.
“The concept here really was to find a partner that we had strategic, cultural alignment with so that we could have a vision of the future that was aligned,” Manzi said.
On Sept. 21, the two banks unveiled publicly what the duo had been working on all that time: plans to merge Leominster-based Fidelity’s parent company with the parent firm for Cape Cod 5, marking Fidelity’s first-ever holding company merger and a significant opportunity for expansion and growth.
“We've done a bunch of bank-level mergers over the years with like-minded community banks, and when we put them together, it was really, really successful,” said Manzi. “This particular partnership is different. It's a combination of the holding companies, but it still matters a lot that you find a partner that’s a good culture fit, and also has a similar strategic vision of the future.”
Both banks will maintain their individual brands and branches, while the merging of the two holding companies will combine Cape Cod 5’s $5.5 billion in assets with Fidelity’s $1.5 billion, allowing for more resources across the two banks, which have 39 locations altogether across Massachusetts, according to the Sept. 21 press release announcing the deal.
Both Manzi and Burke will retain their titles and leadership statuses at their individual banks. Additionally, Manzi will serve as the vice chairman and chief strategy officer of the new merged holding company, called Bancorp Mutual. Burke will serve as Bancorp’s chairman and CEO.
Adding new services, charity
Fidelity has completed several mergers with smaller banks in the past few years, including Barre Savings Bank in 2016, Colonial Co-operative Bank of Gardner in 2017, and Fitchburg-based Family Federal Savings in 2019.
This most recent combination, however, is a partnership between the two banks’ holding companies, which allows them to continue operating as separate entities but share resources.
“We get the best of both worlds,” Manzi said. “We get the financial benefits of size and scale – a $7-billion holding company – so there will be more resources to invest, but we’ll keep the power of the local community bank.”
Fidelity will now provide wealth management and trust services for its clients, a new division brought over from Cape Cod 5. The accumulation of resources will help bolster quickly evolving areas like digital and mobile banking, as well as cybersecurity and fraud reduction for clients, Manzi said.
As part of the merger, Fidelity is creating a $5-million charitable fund, complementing Cape Cod 5’s existing foundation, which contributes about $1 million annually to organizations in its region, according to its website.
The new Fidelity fund will go toward the Central Massachusetts community and is close to a decade’s worth of giving or more in one foundation, Manzi said. The fund is in addition to Fidelity’s existing LifeDesign community dividend, which donated more than $450,000 to 200 local charities in 2021.
Manzi expects the merger to yield more career opportunities for Fidelity’s more than 150 employees.
“There’s no downside,” he said. “There’s no risk of layoffs or anything that comes from some big corporate merger. It’s all upside for my colleagues.”
Thanks in part to the slew of mergers, Fidelity has enjoyed considerable growth over the past few years, adding more than $1 billion in assets since Manzi began as the bank’s CEO in 1997. Fidelity is Central Massachusetts’ 12th largest bank when ranked by assets, according to data from the Federal Deposit Insurance Corp.
A big part of the deal with Cape Cod 5 is a shared mission of caring for customers, community, and colleagues, said Manzi, who noted the word “care” was dominant in both banks’ mission statements.
Additionally, both banks are mutual banks, meaning they are not owned by shareholders and, like credit unions, give account holders partial ownership of the bank. The U.S. has fewer than 500 mutual banks, 92 of which are based in Massachusetts, according to the industry group America’s Mutual Banks.
“That was part of the cultural fit, too,” Manzi said. “We are both committed to staying mutual.”
