JOHN CARUSONE – A natural partnership
The American Indian tribe that runs Foxwoods Resort Casino in Mashantucket has invested about $1 million in a holding company that is starting a de novo bank.
The Mashantucket Pequot Indians bought 117,000 shares of stock during the follow-on offering of Southern Connecticut Bancorp, said Michael Ciaburri, an organizer of the new Bank of Southeastern Connecticut. That totals about 5 percent of the shares, Ciaburri said.
“They basically made a million-dollar investment,” he said.
Southern Connecticut Bancorp is the holding company of the New Haven-based Bank of Southern Connecticut and the New London-based Bank of Southeastern Connecticut. The state Department of Banking awarded a temporary charter to the latter bank in late April.
Financial experts for the Mashantucket Pequot tribe decided to invest in the holding company because of the track record of its chief executive officer, noted Sylvester Allen, executive assistant to tribe Councilman Kenneth Reels.
“[Chief Executive Officer] Joe [Ciaburri] has always had a history of success in banking,” Allen said. “We really like [Ciaburri’s] philosophy and how he approaches the business.”
The tribe also wanted to expand its investments.
“We want to diversify the tribe’s interests,” Allen said.
This isn’t the first foray into banking for the tribe, according to Allen. The Mashantucket Pequot Indians play a big part in the support of Connecticut Community Credit Union, which serves workers at Foxwoods and citizens in nearby towns. The tribe also has invested in the Native American Bank, a federally chartered bank based in Denver that caters to American Indians. Reels is one of the directors of that bank’s holding company, Native American Bancorporation.
The latest investment was both hoped for and expected, said John Carusone, president of the Bank Analysis Center in Hartford.
“I think it’s a symbiotic relationship between a new community bank and one of the region’s largest employers,” he said.
The tribe’s prior banking experience – mainly its experience with the credit union – make it “no stranger to deposit taking and loan making,” Carusone said.
‘A Good Development’
The deal holds many ancillary benefits for the bank, Michael Ciaburri said, although he was not specific. But there could be some sort of partnership between the bank and the credit union, he said.
“We’re still in the embryonic stages,” Ciaburri said.
That kind of partnership would be natural, Carusone said.
The presence of the bank in New London will help both the Mashantucket Pequot tribe and the nearby Mohegan tribe, Carusone said.
“I think it’s a good development for the [two tribes] that there is a new community bank,” he said.
The bank will be a source of financial strength in the area, he said.
Southern Connecticut Bancorp’s second offering was underwritten by A.G. Edwards and Keefe, Bruyette & Woods. The offering totaled 1.73 million shares, which traded for $8.50 per share and raised net proceeds of about $13.7 million, according to a statement from Southern Connecticut Bancorp. The holding company and the Bank of Southern Connecticut opened in October 2001 after it completed an initial public offering of $11.7 million, according to the statement.
