20 Minute Tuesday: Economic Outlook on Cape Cod

Wendy Northcross: Hi, I’m Wendy Northcross, CEO of the Cape Cod Chamber of Commerce. And welcome to our sixth edition of 20 Minute Tuesday that we produce in partnership with The Cooperative Bank of Cape Cod. And today I’m very honored to be sharing the screen with the chair, president and CEO of the bank, Lisa Oliver. Lisa is also – full disclosure – on the Cape Cod Chamber Board of Directors. And we both kind of sit in unique positions where we have an interesting view of the region’s economy. I’ve very excited today to talk with her and see what her insights are, what she’s hearing, what she’s predicting. Just have a general conversation today. A little bit different format for us. Welcome, Lisa. Why don’t you tell our viewers a little bit about yourself and role at the bank?

Lisa Oliver: Hi Wendy and thank you. It is fun to be here, especially this time of year when I like to say to my bank team there’s green sprouts. Green sprouts are everywhere, which means things are in bloom and that’s not just in the garden. And it will be fun for us to share some of those thoughts and compare what we’re seeing, how quickly things are changing, morphing, and how it’s definitely looking positive. But I’d like to spend just a little time on my background. I am a life-long banker. All the way back to being a summer teller in college growing up in Kingston, New York, in the Catskill Mountain area in the Hudson Valley. I have that career in banking has had me … as a commercial lender is really my background. I was in commercial lending; I was formally credit trained; I’ve worked with business clients the majority of my career. And that has taken me, obviously through the geography of the Eastern part of New York state but basically around all of New England as I oversaw a large group of teams working with businesses. I actually moved to Cleveland for 15 years with a very understandable spouse, my husband, Richard, and sons John and Matt. And we were in Cleveland where I became a regional president for the market out there, and I ended my career with Key Bank running the national line for business banking. So my business background and working with businesses is deep. It’s a passion of mine because of the engine – economic – engine that it is. Helping people, helping employees, helping business owners, helping the community, providing services. My husband, as a point of note, is from Sharon, Mass. We did meet in New York City, and I think somewhere in my marriage agreement I promised to get him back to Massachusetts. So, here we are. Check mark. Accomplished!

Northcross: Good job! I think you spent time vacationing on Cape Cod before you were hired to The Cooperative Bank’s leadership.

Oliver: Yeah, so, as a child, — we still have a picture in that old galley of family photos – of us Popponesset Beach. And about 25 years ago we started vacationing with our children every year, both Cape and Island, as well as Nantucket and the Vineyard. We’ve spent a lot of time in Truro – and still do – with really good friends that are out there. So, it was a passion of ours the whole time we were in Cleveland to try to figure out how to get back East (No. 1) and how to leverage our banking careers and how to get specifically back to Cape Cod. So, bullseye! WE got it.

Northcross: That’s so funny. There’s a saying that once you get sand in your shoes, you always come back to Cape Cod. You figured out a way to be here full-time, which is great. You know, what’s interesting is that you have that great depth of banking experience in different places. So, it will be interesting to hear from you now on how you see Cape Cod. Perhaps, you know, our economy has these seasonal cycles, and like you said, green sprouts. So, green is also when our visitors come back and our second homeowners are here. And that creates a much more busy climate for everyone. Probably not always the same in Cleveland – probably a very different business climate. So, what do you see for Cape Cod’s seasonal economy? Or what are you hearing for people getting prepared for the busy months ahead?

Oliver: As you know, we’ve had great dialogs about this at our chamber board meetings, especially from all of the business owners who sit one the board, the nonprofits, just the general sense of what’s happening in the economy here from all the members. We are – this dives back into the government relief, which started a year ago as we entered the pandemic days and were able to leverage the PPP program. It’s still operable. It’s still running until of May. But this supported economic stimulus allowed businesses to have really a live-line to get them through the pandemic and tough times. For us, and our seasonal economy, it was very helpful timing wise. We were able to get money into businesses’ hands here on Cape in the hardest part of the year, which is even in a regular year, is kind of rounding the horn after the holidays getting all the way to Memorial Day. And that’s when the funds came out last year, and that’s when the program was reupped this year. So, that stimulus has allowed, I think, a very positive head of steam as people are looking forward to – we only have a couple more months left to go. We’ve also heard that his ramp up leading into our season – it’s going to be a great season. We ended last year talking with clients, and businesses across the Cape, employees across the Cape, about how the second summer that we have here – we have a late spring, but we have a wonderful second summer – was tremendous last fall. And some, even hospitality businesses, did better than they did in regular seasons. I think we’re going to see that continue. When you look at the challenges associated with foreign travel, many people travel abroad and it’s likely that we’ll be able to this summer. But there’s still a lot of people very hesitant to do that. We’re going to see people coming to the Cape. And this is vacationers for sure, which we know, but a lot of second homeowners. And we’ve seen that happen throughout the year. So, food industry, services, it kind of goes on and on … will all be in higher demand and I think that is going to be very successful for our economy. Having been in Cleveland for 15 years, it took on a very different spin because it’s a manufacturing economy – No. 1 – so that’s very different. And it was year-round, like it is in so much of the country. And when you’re here you have to be really sensitive and focused on where the greatest need is and how we make sure during an off-season we are actually having more conversations with businesses because that’s when they’ve got time to speak. And that’s when they’ve got time to plan and arrange and come up with the next phase of their business plan. So, we’re really excited about it. I think there’s a lot of positive momentum, positive esprit de corps. People are ready for it, we’re certainly all ready for some warmer weather. But it is going to be a fun cascade into the season this year.

Northcross: I love that – esprit de corps. We really have been a pretty cohesive community for the last, you know, since the state of emergency was declared over a year ago. I will tell you that what we’re seeing at the Cape Cod Chamber is for demand is unprecedented. It used to be that 20, 30 years ago people would make their vacation plans, and by January – February we knew if the Cape was going to have a good summer or not. But, you know, in the recent years with technology enabling last-minute bookings and decision making, it was harder and harder to predict. But this year it is like “Back to the Future,” we know advance bookings are extremely strong and we know too that some of the group business that we’ve lost – not just the motor coach groups where 40 people would come together to travel and tour – but weddings and meetings and a lot of that business has been pushed off to the fall. So, I think just as we saw last fall, people were more comfortable by Labor Day to come out. But this year, come September and October that meeting business has been moved to the shoulder season, which is great for us. That’s what elongates that economic cycle. And people can continue to earn a living, businesses can continue to depend on that cash flow. Very different year. It’s a very different year for sure.

Oliver: I think so, too. And actually because of PPP, again this is a generalization because there have been businesses that really struggled, there have been businesses that have closed and people have lost jobs. And we have to recognize that. It’s not all great news. What I’m looking forward to is businesses being able to engage, grow, maybe restart up and get more people back and employed. But what I will say is those that did get PPP funds, we know there’s been a shift in how people spend their money. As a consumer, we’re just not going out, we’re not traveling, people’s savings accounts are generally higher. And businesses have cash. They have taken a conservative approach. Maybe there hasn’t been expansion. They pivoted. They’ve been able to take a look at expenses to decide what are hard costs that can’t be moved – you know, you’ve got to pay a loan, pay electricity, you know there are things that just have to be paid regardless of how much revenue is coming in. But those who have been a little more fungible expenses, businesses have been very conscience of. So, the coffers of cash that is available to get the season going, then hopefully make a tremendous amount of bottom-line monies that will continue into the fall. I’ve very excited to see what happens. And we see that proof … the proof of it is that the bank’s balance sheet sees the effect of inflows and outflows. We have more liquidity, and we’re not the only bank. This is a banking phenomenon this year. Banks have more liquidity, meaning we have more deposits in our coffers than we’ve had in lifetimes. I’ve never seen this much cash on balance sheets before. And it’s waiting for the what’s next. It’s being more conscience of having funds for a downturn, a rainy day. Again, it’s businesses and consumers. We see that across the board.

Northcross: So, it’s really interesting to think about, you know, the consumer has all-time savings. Even with the massive job losses, the stimulus money that’s been flowing out of Washington, D.C., and potentially hasn’t stopped, has been really a tremendous backstop. So, you’re right. There has been some winners and losers, absolutely, and we do see a certain percentage of businesses that have just closed. Because we offer business, you know, counseling and advice and we’re seeing a lot of people come in … like I’ve got an idea. And this is the time they want to act on that idea. We also see a lot of people on the Cape looking for commercial real estate. You know, they see it as an opportunity, a moment in time. There may be some bargains out there, but they’re looking at Cape Cod real estate as a good investment.

Oliver: Yeah, you are spot on with that, Wendy. We have a lot of money in deposits, but there are many people who are borrowing. Commercial real estate, people who have rented properties, see it as a great opportunity to buy. And that’s been driven by the fact that interest rates have been so low. I mean unprecedented interest rates. So when you think about it borrowing to own your own place it may be less or equal to amount to what you’re paying in rent at the end of the day. And now you’ve got a piece of equity, you know, a piece of an asset that you’re able to build upon. And we see that happening across the board. It could be investors looking to be investment properties, it is people buying multifamily homes, people interested in building multifamily homes and we all know how needed that is here on the Cape. So, we’re seeing a lot of movement in that. Regardless, rates are starting to tick up, which always in short-term view it’s all – ooh, the rates are going up – but you know when you consider they’re still so low compared to the past 10 years, it’s ridiculously low. We’re not at the bottom any more – that’s a good thing. I think because when you’re at the bottom that usually means there’s a negative component to what’s going on in the economy. So, seeing a little life, even in the interest rates, and for all those living on a fixed income, the interest rates going up is a good thing. There’s always a scale. You know, a scale of value associated with the interest rate curve. But it is borrowing is happening. There is no question.

Northcross: So, it’s very interesting because there’s a lot of parallels to what’s happening now as to what happened 100 years ago. So, 100 years ago, there had been another pandemic – in 1918, 1919. In 1920, we’d celebrated the 300th arrival of the pilgrims. Cape Cod’s economy was very different. We had a basically major recession and depression on Cape Cod. There had been a lot of people who moved away … young families had moved away 100 years ago because farming and fishing was depleted or so they said it was depleted then. And that’s exactly same time that the “Roaring ’20s” were starting up, right? People were coming out of that pandemic, they were coming into a new century and they were starting to spend money and starting to do different things. And that’s when the Cape Cod Chamber was formed to help build travel and tourism industry 100 years ago. And it’s also the 100th anniversary of when The Cooperative Bank was created, right? So, very interesting times. And so I think we are reentering into this hyper, fast-moving, high-charged, you know, people are out there with money and they’re going to be doing something. So, like, put your seatbelt on. But it’s also kind of fun you and I, both of our organizations, celebrating an anniversary at the same time. So, tell us a little bit about what you’ve got planned at the bank to celebrate.

Oliver: You know, I think about 100 years ago, well especially now because it’s really relevant, but there’s a number of organizations that I think about the last few years, the next couple of years, of businesses on the Cape in addition to yours and ours that are celebrating 100 years. So, it would have been a fascinating time on Cape Cod to have been here 100 years ago. And that’s part of what we’re trying to capture … is a celebration of what has happened in the 100 years that The Coop has been here – The Cooperative Bank of Cape Cod or Cape Cod Cooperative Bank as our official registry is called. And how the bank has evolved yet done the same thing, which is to put clients and community first. As a mutual bank, that’s what it has been about. So our goal is to celebrate that journey. We have a – let’s call it a campaign – but it’s a recognition of 100 reasons to love The Coop, which involve the reasons in which we love our communities and our clients, how our employees think about working here, having worked here, how our community partners think about … but for the Cape … but for The Cooperative Bank of Cape Cod how would things have been different? So, we’re celebrating that. We’ve kicked … we’ve launched our 100 day countdown to our birthday, which is July 19 of this year. And we’re between now and then going to be giving $100,000 away to community organizations. We’ll be announcing these on regular basis with the full list being revealed July 19. And this is on top of the donations we already make. So, having created our Foundation a couple of years ago, we have really been able to leverage increased giving. And that is ultimately our purpose. It’s to give protect and serve our clients, help them manage their deposits and to keep them safe, it’s to give them loans, and it’s to take our bottom-line money and turn it back into the community. And that’s what we’ve been doing. So, we are going to celebrate all that. The employees are going to have a chance to give $10,000 away. And we’re looking for some excitement around July – pandemic changes considered – that we’ll be able to have some fun. Fun getting together, fun celebrating successes, fun recognizing all that is Cape. So it is an opportunity for a huge party in so many ways. Hopefully we’ll all be celebrating getting back to some level of normalcy.

Northcross: Yeah, being in person together is going to be really exciting, I think. You know, the good news is the Cape really ahead of the curve for vaccination rates. As we are recording this today, 50 percent of Cape Codders have a least one shot, and there’s no slowing down there. So, I do believe that by July, there will be a lot more confidence. People will be able to convene. We are hoping to have our annual meeting in person on June 9. You know, that remains to be seen. But I think people are itching to get back together again, and I think it’s great that The Coop can be a convener and bring not just your employees back together but, you know, your customers and clients and folks as well.

Oliver: We’ve had a quiet project in the works here at our headquarters on Benjamin Franklin Way off of independence. And we had planned to remodel headquarters. The building is about 16 years old, and we’ve had a couple of tenants. And we just outgrown that tenancy structure, and we’ve opened the whole thing up. And, you know, the silver lining, which I think when we all take a step back and deep breath we recognize there have been many silver linings, but the ability to actually take a live build and with everybody being home speed that up and effect outcomes this building should be ready for employees to come back and for us to share with the community right around July. Right around the birthday. Not intended upfront. It’s all just the way it’s fallen into place. So, we’re excited as a convener to make this a resource that’s available much more broadly than just for the bank.

Northcross: Yeah, that’s great. And that’s a great investment, too. Thank you for investing in your employees and taking great care of them. I know it’s been a challenging time trying to manage, you know, that safety – you’ve had people on the frontline who have had to be very protective of their health, their customers’ health, and it’s been not without its stress.

Oliver: Thank you for recognizing that because we’re just similar to everybody going through life without a playbook, meaning there is no history to what we did last time that informs decisions for today. We’re establishing that history now, and hopefully it will never have to be used again. I don’t necessarily think that’s true, but we probably will, but at least there will be some level of playbook, rules, regulations, things to do if this happens in the future. But we’ve all worked together. Best practices learned from other companies around the Cape, and for us the relentless conversation about what do we do for our clients to keep them safe and provide services and for our employees. And as we speak right now, the Cape is still a high positivity rate and we’re using some of these numbers to evaluate whether branches should be opened or closed. For all sides of that equation, the employees, the clients, we have shut those in the higher positivity rates. We do have a couple of branches open, full service, but it has been frustrating. They’ve been open; they’ve been closed; they’ve been open. Knowing that the whole time, it’s the lobbies that are opening and closing, the drive-through has never ceased operation nor will it. So people can always go to the branch and get support at the drive-through, even the things that normally wouldn’t happen in a drive-through. And they can always pick up the phone and call. Certainly our 800 number, ATMs, mobile banking, online banking, all of that’s available. So, the bank’s never shut it’s just been the lobbies that have gone back and forth between open and closed. But we’re really just trying to help people stay safe and do our part to stop the spread because oftentimes people don’t know they have Covid before it’s been diagnosed and they’ve been around people.

Northcross: Well, it’s also been a great movement toward adoption of digital banking. Wouldn’t you say? I mean, people have kind of had to do it, so now they’re finding out how convenient it is, how many tools the bank has to make it easy for people, whether it’s business or a residential mortgage customer. I know, you really have made it much easier to do those transactions online.

Oliver: Yeah, and it’s … what’s interesting is as an old bank, there’s a trust and establishment when you’ve been around for many years. There’s also this old spider web closet that people think that bank can’t be able to serve me. What it’s allowed us to do is show the fact that we are trying to represent trust and security in the age of the institution as well as being very current and competitive with things that other banks offer. We’ve spent the last year teaching every client how to bank remotely. And that doesn’t meet the needs of those who really enjoy coming into the branches, a social outlet, want to have face-to-face conversations, and that can still happen. We can do a WebEx, and we will meet people in the branches, but it plays into this question that banks have – what is the next 3 to 5 years of strategic growth look like? And where does my next dollar of net income go to as a reinvestment? Every business deals with this. For banking, is it more brick and mortar? Is it more branches? Is it more ATMs? Is it more hard structure? Is it more digital access? Is it more products and services that allow people to be remote? And the pandemic has advanced this need for a digital approach, easily for years because people had to adapt right away to figure out how to bank remotely. So it’s going to be an interesting journey over the next 3 to 5 years in banking. I mean, it’s been for the last 25, if not the entire history of banking, but certainly the digital – the advent of computer usage, digital banking, I remember when ATMs were this crazy new thing and now ATMs are now kind of not as much. It will be about digital banking in the future. So, it’s trying to manage all. Trying to be there for every client in the way they want to bank and that is the juggle on how you do it. But we’re going to try to do it all.

Northcross: So, you know, as we’re wrapping up now, I’m just thinking about 100 years ago, do you think the founders of the bank ever imagined that people would be doing the transactions that we doing now online? I mean, it would be kind of interesting to see they reaction today. I think they’d be very proud of the bank – that you’re still here, you’re growing, you’ve got a great team, and great leadership. I want to thank you for spending some time with us today. Lisa, any wrap up comments you want to offer?

Oliver: No, I love that question you just asked. That will be a fun one for us to think about here because 100 years ago I’m sure they didn’t even think you’d be able to drive your car up to a branch — for those who had cars or still riding horses – how would you bank and how would you have access, much less where we are today. It’s quite a journey. It’s quite a thing to think about. So, thanks for taking the time. It’s always fun to talk to you and to especially be able to highlight the positive notes that are around us and the green sprouts.

Northcross: Yeah, thank you very much. This is actually the last 20 Minute Tuesday that I’ll be co-hosting as the CEO of the Cape Cod Chamber. So one of the big handoffs for the chamber is my retirement and off to a new leader there with a new strategic plan and with a great business community supporting that all the way. That’s including you and the bank, so I want to thank you for that.

Oliver: Well, Wendy, you’ll be so missed. No one’s going to let you go anywhere. You need to know that. But you’re so respectful in the way you’re approaching this, as I am involved in the conversations and I know that you’re going to give the new leader the breath he or she needs to take it to the next level. But you’re such a resource, and I know, as I said, you’ll not go far. You’ve become that voice of reason and advocacy that I think the Cape needs and wants as community. Thank you for that because you’ve done just amazing things during your tenure there.

Northcross: Thanks, Lisa. I couldn’t have done it alone. We have great partners like you. We’re going to thank our viewers today for tuning into our 20 Minute Tuesday, and as always you can leave suggestions on the website for future topics. We’re going to take a break until September, and can’t wait to see you all hopefully on the beach and hiking trails this summer. Hope everyone stays healthy. Stay masked. And be well. Thank you, Lisa.

Oliver: Thanks. Goodbye.