The Bank of Southeastern Connecticut, whose headquarters are to be located at 15 Masonic St. in New London (above), will open in October if all goes according to plan.

A New London de novo bank hopes to open within two months now that it has received approval from the Federal Deposit Insurance Corp. A building is ready and some staff has been hired for The Bank of Southeastern Connecticut, which will open in October as long as approval from the Federal Reserve Bank and the state Department of Banking arrives by then.

Now that the first hurdle is out of the way, bank organizer Michael Ciaburri believes the remaining two – the Fed and Department of Banking approvals – are more or less a sure thing since the FDIC approved the bank.

“[The approvals] are all tough to get, but [the agencies] all kind of work in concert with each other,” he said. “Getting the FDIC approval was clearly the key.”

The state Department of Banking has granted the bank temporary approval, but doesn’t grant final approval until the holding company has put capital into the new bank, which hasn’t yet happened, although the money has been raised, according to Ciaburri.

The Bank of Southeastern Connecticut will be the first de novo bank to open in Connecticut this year. If the process gets held up and the bank doesn’t open in October, it will almost certainly open later in the fourth quarter of this year, according to Ciaburri. In addition, three other de novos hold temporary charters from the state and could open sometime this year, and one other recently applied for a temporary charter and is waiting to hear back from the state.

The Bank of Southeastern Connecticut is the second effort by its organizers. Nearly four years ago, Ciaburri and his father, Joseph Ciaburri, started The Bank of Southern Connecticut, a successful New Haven institution, and its holding company, Southern Connecticut Bancorp. Michael Ciaburri is the president and chief operating officer of the Bancorp, which is also the holding company for The Bank of Southeastern Connecticut. That organizational design is why the new bank needs Fed approval, and is also why Ciaburri believes it will become profitable faster than the first bank.

Although The Bank of Southeastern Connecticut has its own charter and is its own bank, being a subsidiary of the holding company allows it to function more like a branch by essentially having the back office run out of New Haven. When it opens, the new bank will employ six people, including the president.

“They’re not going to have the expenses to start like we did back with the Bank of Southern Connecticut,” Ciaburri said.

With a small staff like the bank will have, there will not be the overhead associated with most de novo banks, he said.

‘Good to Go’

The bank’s organizers have hired two experienced employees to lead The Bank of Southeastern Connecticut.

The bank’s president and chief executive officer will be Carmelo “Mel” Foti, who has spent his career at financial institutions in New York City and the Middle East. Foti is originally from New York City, and has spent most of his professional career there. He started with Manufacturers Hanover Trust Co., which eventually sent him overseas. Foti first worked in an office in Bahrain that covered countries like Qatar, the United Arab Emirates and Saudi Arabia before the bank put him in charge of opening an office in Jordan, which covered countries like Iraq, Libya and Syria.

“It was a great growing experience,” Foti said.

He added that he has since been involved in other startup companies, but his experience in the Middle East prepared him for any challenges involved.

“Starting a bank in southeastern Connecticut seemed a lot easier than starting a bank in the Middle East,” Foti noted.

The biggest hurdle that anyone faces when starting a new bank in the United States is probably getting all of the necessary approvals, he said.

“Probably the most challenging thing is getting all of the regulatory work done,” he said. “It’s a challenging, complicated process.”

The bank also has hired Ann E. Chambers, who has 25 years of commercial banking experience in southeastern Connecticut, as its senior lending officer.

“We certainly have a good shot with the two of them,” Ciaburri said.

The organizers are now hiring support staff for the New London bank, which will be located at 15 Masonic St. The building, a former People’s Bank branch, has been renovated for the new institution and is ready to open, Ciaburri said.

“It’s good to go,” he said.

The New London office is the only one opening in October, but the bank has plans to open branches in both Groton and Waterford in the near future.

But the possibility of The Bank of Southeastern Connecticut teaming up with a nearby credit union is on hold for now. The bank also had been in talks with the Mashantucket Pequot tribe – which plays a large part in the support of the Connecticut Community Credit Union – but there is “nothing on the table” at the moment, Ciaburri said, who nonetheless added that he does hope to reinitiate talks after his bank opens in October.

The Mashantucket Pequot Indians also made a large investment in Ciaburri’s holding company several months ago. The American Indian tribe, which runs Foxwoods Resort Casino in Mashantucket, bought 117,000 shares of stock totaling about $1 million during the follow-on offering of Southern Connecticut Bancorp last year. That totals about 5 percent of the shares.

The Bancorp’s total assets were $87.4 million as of June 30 of this year, an increase of $11.3 million over June 30, 2004.

Earlier this year, Southern Connecticut Bancorp named The Bank of Southeastern Connecticut’s chairman. Daniel R. Dennis Jr., a banker with more than 36 years of experience, was the president and chief executive officer of Norwich Financial Corp. and the Norwich Savings Society, which Bridgeport-based People’s Bank acquired in 1998. He retired from his position as senior vice president and eastern market manager at People’s two years ago. Dennis also will be appointed to the board of directors of Southern Connecticut Bancorp.