Expanding into the blue yonder: we'd all like to spread our branch network into the neighboring county. But how do you grow an office where few people are familiar with your brand? Katahdin Trust Co., Maine, paved the way to success through a personalized and targeted direct mail campaign.

• Author: Gross, Charles

IN 2010, KATAHDIN TRUST CO., A $527 MILLION DOLLAR BANK located in two counties in northern and north-central Maine, opened a fell-service branch in Bangor, about 90 miles away to the south from its nearest existing branch.

This expansion faced several obstacles. For one thing, the bank had very limited name recognition in Bangor; for another, the bank had only a limited marketing budget. To promote the opening, the bank ruled out an expensive broadcast media campaign, and focused instead on targeted direct mail.

The results exceeded expectations. The bank followed up by using the same marketing approach to support the opening of a second branch in another Bangor suburb. A third is planned for later this year.

The marketing tactic illustrates how a community bank intent on geographic expansion can successfully penetrate distant markets despite a lack of local name recognition.

Expansion orientation

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Katahdin Trust Co. was founded in 1918 in Patten, Maine, part of Penobscot County, in the state's north-central part. Three years after opening its first office, the hank opened a branch in Island Tails, in neighboring; Aroostook County, which is die state's northernmost county. These remained the only two locations for the next 55 years. Between, 976 and 1991, the hank opened three more offices, all in Aroostook County.

During the mid-1990s, as the population in the two counties declined and larger hanks reduced their presence in the market, Katahdin Trust expanded with two new offices and a new operations center.

In 2000, the bank doubled its locations and increased its assets by 62 percent with the acquisition in Aroostook County of eight branches of Peoples Heritage Bank (now 'I'D Bank).

In 2008, the bank decided to explore further geographic expansion. Spreading to the north was impossible because of the Canadian border. So the bank looked to the south. It put its toe in the water by opening a commercial loan office in Bangor, the county seat of Penobscot County, located on the county's southern end.

The bank prepared in two ways for opening its first lull-service branch in Bangor. It developed two plans: one for marketing and the other for employee development and training. "We made it a point to attract good quality employees--some from other financial institutions and some with strong sales backgrounds," says Vicki Smith, senior vice president of marketing and communications.

Next, the bank did staff training in...