PBN: What are Sovereign’s strengths in Rhode Island’s competitive banking market?
ISSA: Our strengths are the people in Rhode Island. We have just over 1,000 team members in the state. Our team and management live here and know every square inch of Rhode Island. We are very well-connected in the business community because, basically, all of our careers have been spent in Rhode Island or short trips into Massachusetts. Sovereign has the best of a big bank in terms of products and services, but we have local delivery. We serve our customers as a community bank in each state, but we have products and services second to none that can compete with any other bank that is much larger than us.
PBN: Is Sovereign’s strategy in Rhode Island different than in larger states?
ISSA: Two years ago our CEO Jay Sidhu (of Sovereign Bancorp) looked at how we could better serve our local markets. So we all studied the question for about six months. We knew we always had the products and services, but now the local authority and decision making became the focus. That’s why in January we went to a market-by-market CEO and unitized structure, whereby retail, community banking and commercial are part of one team. It’s always been a theme, but our CEO took it one step farther this time. Other banks seem to be more centralized as they keep purchasing more banks. We went to a decentralized structure because we have experienced people around the table. We can approve up to $25 million right here as if we owned the bank independently.
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PBN: How does Sovereign distinguish itself to consumers from its competition?
ISSA: We have what is called red-carpet service. I know there’s a lot of flavor-of-the-month themes out there, but red-carpet service in my years here means to live day to day from the top managers, to the tele-services staff, to our bank tellers. For example, if one of our ATM machines breaks, we monitor how long somebody has to wait in line. We drive that philosophy in each market, and we get report cards on how well we’re doing. And each team member has to live by that. We have a $5 penalty we pay if a customer goes to an ATM and there’s no money there, or a customer has to wait in a teller line for more than five minutes. I think that red-carpet service means that we can deliver our products and services locally. I think it’s the experience of people; we each have over 18 years of experience on our management team. Another important point is that many of our branch managers and customer service representatives have had the same relationships – from Hospital Trust to BankBoston to Sovereign – for 10 to 15 years. They’re part of a family, so to speak. So I think that and our local decision making ability differentiates us from the rest of the market.
PBN: With the introduction of Bank of America in this market, is there more pressure on other banks to grow?
ISSA: I think Sovereign’s strategy is to continue to grow, and continue to do our jobs. We are on target with our growth plans. At this point in time we are competing extremely well with both the big and small banks, so we are not changing our strategy. I think Bank of America is still in transition, as they digest this acquisition, which is taking them a little bit longer than they originally had in mind. At this time we have a good customer acquisition strategy, and we are on target in terms of loan growth and deposit growth.
PBN: Do you have stand-alone ATMs?
ISSA: We have 67, and we’ve been adding some this year. We actually have a branch at Rhode Island Hospital. It does very well. A lot of the physicians on their lunch hour or after surgery are down in the branch doing their banking. What’s great about the Rhode Island Hospital branch is it represents our new philosophy, which is to deliver the bank to the customer. They love it because we have personal bankers, and if someone at the hospital wants to make a deposit and they’re in surgery, their secretary or administrative assistant will call, and we’ll go up and pick up the deposit if we have to. We’ve done it many times. It works out very well. We have lines in that bank that go out the door. And their time is so valuable, so it does work out well.
PBN: With 30 branches in this market, how many more branches do you see having in the next, say, five years?
ISSA: I would say our strategy is to add a couple of new branches every year. We have sites picked out and we are working with some developers and real estate agents to acquire those properties. But we plan on adding a couple of branches a year.
