Now that its first community bank on the shoreline has proven to be successful, a New Haven-based holding company has set its sights on New London as the home for its next bank.
Southern Connecticut Bancorp, the parent company for the Bank of Southern Connecticut in New Haven, is set to launch the Bank of Southeastern Connecticut in New London. An application was filed with the state last month.
While the Bank of Southern Connecticut is a mere 20 months old, principals at the holding company felt it was time to expand farther along the coast. Despite its young age, the bank has already secured more than $50 million in assets and more than 400 businesses in its commercial portfolio.
“We wanted to start a new hometown bank,” said Joseph Ciaburri, chairman and chief executive officer of the Bank of Southern Connecticut. “The idea is not to open another branch of a New Haven bank in New London, but to open a New London-based bank.”
Joseph Ciaburri is chairman of Southern Connecticut Bancorp and his son Michael is president.
The elder Ciaburri noted that New London hasn’t had a small, community-based commercial bank since 1967.
“We want to fill a niche there in New London,” he said. “What you have there now are large banks from Rhode Island and Massachusetts and Pennsylvania and New York. You have all these regional banks but nothing locally based.”
He added that the plan for the Bank of Southeastern Connecticut includes a board of directors that will be based in New London itself. All bank officers and staff members will be based in the city as well.
The new bank will have headquarters at 15 Masonic St. in downtown New London, adjacent to the local post office and City Hall.
“The building actually used to be a bank, but after all the mergers and acquisitions that have come through it’s just been sitting vacant,” said Ciaburri, who is well versed in the world of community commercial banks. In 1979 he started the Bank of New Haven, which was eventually sold to Citizens Bank when he retired. Shortly after, in August 2001, he joined his son and other principals in raising $11.7 million in capital over a 17-day period.
“We’ll have to raise a like amount for the New London operation, and of course we will capitalize that bank with sufficient funds. For the Bank of Southern Connecticut we raised more than required by state statute,” he said.
‘Working Together’
Strategically, bank founders want to eventually cover the area from New Haven to the Rhode Island border. Currently, the Bank of Southern Connecticut covers the area of shoreline from New Haven over to Old Saybrook. Plans were approved by the Connecticut Department of Banking to open two new offices along the shore, one in Branford and another in Amity.
The Bank of Southeastern Connecticut would bridge the gap between Old Saybrook and Rhode Island, starting first with just the one branch.
“This is the most under-banked area in Connecticut, especially in terms of hometown banks,” said Ciaburri. “There are a few hometown mutual banks, but no small-town commercial banks.”
Regarding the need for two separate banks, Ciaburri noted, “Otherwise we’d just be another branch of another bank, and people relate better to hometown banks – especially the small- to medium-sized business man. We’re not based in Boston, not in North Carolina and not in New York. We’re based in New London.”
He added, “You could go into New London with a branch, but that would defeat the whole purpose of the hometown bank. New London should have its own identity, its own official staff and board of directors, because they know the people and the businesses and the economy.”
“If there wasn’t a need for this type of bank we wouldn’t do it,” said his son Michael. “There are thousands of small businesses along the shoreline that are not getting the proper service from their bank.”
He added, “We will offer them personal attention. Instead of getting aggravated on the phone by automated answering machines, you’ll get a person. I answer my own phone and I’m the president of the bank, so obviously it will be much easier for a business to deal with us. You’re not just a number here.”
When the Ciaburris started the Bank of Southern Connecticut, they did so with the intent that they eventually would build the New London bank. Joseph Ciaburri said that has always been part of the plan.
“There are six major cities in Connecticut and only now are they starting to be served by community banks,” he said. “Bridgeport didn’t have a bank and now they do. [David] Lentini is starting the Connecticut Bank and Trust Co. in Hartford. There is still none in Waterbury, and now we’re filling gaps in New Haven and New London.”
He also noted that Stamford currently has Patriot’s Bank, a community-based mortgage lender.
“We’re all working together to get the state covered,” added Ciaburri, who remarked that community-based bankers tend to work together in a less-than-competitive market. “We’re up against the big banks who are deposit gatherers. They invest money all over the world, whereas our money is invested right back into the community.”
Michael Ciaburri explained that the bank will be launched during the next 12 to 18 months and the possibility exists to open four branches at once. The bank will open in partnership with the Mashantucket Pequot Indians, who operate three credit union branches in the area. The Southeastern Connecticut headquarters will be a fourth branch, and the credit unions may convert to the Southeastern name as well.
The people who run the Bank of Southeastern Connecticut will report back to Southern Connecticut Bancorp officials in New Haven. Joseph Ciaburri will remain chairman of the holding company, with Michael as president. The New London bank will operate under its own staff in an effort to truly be a hometown bank.
“There isn’t another commercial savings bank in the whole county,” said Michael Ciaburri. “There are a few mutual savings banks, but no commercial savings banks.”
