Editorial : Extinguished
We learned Monday that Madrid-based Banco Santander will acquire 76 percent of Sovereign Bancorp, whose Bank of Martha's Vineyard branches here are the scattered remnants of the Martha's Vineyard National Bank, Martha's Vineyard's first bank, organized in 1855. Banco Santander already owned 24 percent of Philadelphia-based Sovereign. For Sovereign, the Spanish bank's offer was a lifeline. What it will ultimately mean to Vineyarders is anyone's guess.
The acquisition, according to a Banco Santander board member, will help the Spanish bank diversify geographically. Geographical diversification has been happening gradually for nearly three decades to what was the Vineyard's largest bank. The familiar and lovely main office of what was Martha's Vineyard National Bank, on Main Street in Tisbury, was built in 1905, on the site of Rudolphus Crocker's harness factory, where the 1883 fire that destroyed buildings on both sides of Main Street south to State Road began. The bank's capital then was $50,000, and deposits were around $250,000.
Bill Honey of West Tisbury, long the Martha's Vineyard National Bank's president, built the drive-up facility. His inspired plan was to model it after the Main Street headquarters. His boss at the bank, Stephen Carey Luce, was not only head of the bank in the 1970s, but also the chairman of the Martha's Vineyard Hospital and the inspiration behind the existing, flat-roofed and leaky 1974 hospital building, an architectural adventure not at all up to the Bill Honey standard.
Martha's Vineyard National Bank began as the Martha's Vineyard Bank of Edgartown, headquartered where the Edgartown National Bank is today. Edgartown was the county seat and center of whaling activity. Ten years later, the new institution became a national bank. The bank headquarters in Vineyard Haven was built by James Norton, a Vineyard stonemason, of readily available Island materials.
The bank was bought and owned for several years, beginning in the 1980s, by Edward Redstone, who moved to the Vineyard and became a Makonikey resident, thus avoiding the stigma of off-Island ownership that in those days may have been meaningful, business-wise. Compass Bank, a New Bedford-based bank, bought Martha's Vineyard National in 1994, and in 2004, Martha's Vineyard National was acquired by Sovereign Bankcorp, and it became Bank of Martha's Vineyard. One really needs to consult a map to track this ownership journey.
Sovereign's trans-Atlantic migration into European control began several years ago, when Banco Santander bought a stake in the American regional bank. Islanders hardly noticed this new European link. This year, plagued by illiquid assets tied to mortgage delinquencies, as well as sharply declining profits, Sovereign lost about two thirds of its stock value. For the period ended on September 30, Sovereign posted a loss of nearly $1 billion, compared with net income of $58 million in the year-ago period. Success in its Vineyard operations could not have offset the poor performance elsewhere.
This century and a half of banking history is familiar to some Islanders, of course, but to many who are newer to the Vineyard, the accelerating pace of change in Island banking may appear alarming but common, entirely consistent with what is going on in mainland America and across the globe. It's what we read about daily. The merger of Dukes County Savings Bank and Martha's Vineyard Co-operative Bank to become Martha's Vineyard Savings Bank is a homegrown example of the international trend. That union has strengthened both of its partner institutions and made them more powerful forces in the community, and in the hearts and minds of Islanders. We wish them continued success.
That Martha's Vineyard's largest and oldest Vineyard banking institution - for the sake of argument, we temporarily ignore its previous, less remote, but nevertheless off-Island control - is now Spanish-owned is hardly worrisome. It is, after all, the way of the world, and even we, who strive to keep change at bay, must warily accept it.