People’s Bank has opened an office in this building at 50 Mall Road in Burlington, Mass., its first outside of Connecticut.
After years of reaching across state borders to garner more commercial loans, Bridgeport-based People’s Bank two weeks ago established a physical presence in Massachusetts when it opened a loan production office about 20 miles northwest of Boston. The move places the bank in a competitive market populated by established institutions like Sovereign Bank and Banknorth, and might foreshadow further expansion.
The new office – which, because it is a business unit of the bank, is called People’s Capital – is located in Burlington, Mass., along the Route 128 corridor. It is the bank’s first office outside of Connecticut.
“This [new location] perhaps presages follow-up expansion plans in Massachusetts,” said John Carusone, president of the Hartford-based Bank Analysis Center.
Representatives from the bank have been tightlipped about any specific expansion plans in the past, saying only that it was exploring possibilities of expanding into contiguous markets. Spokesman Brent Digiorgio echoed that when asked if there were any plans for more offices or branches outside of Connecticut. There is a Holyoke, Mass.-based bank called PeoplesBank with branches in 12 western Massachusetts communities.
Although the new office is about 60 miles from the Connecticut border, it is not unusual for commercial banks to set up loan production offices in “far corners,” according to Kevin Handly, a bank attorney with the Boston office of New Hampshire-based Gallagher, Callahan & Gartrell. It was a natural move for a successful Connecticut bank like People’s to position itself in Massachusetts’ high-tech belt, he said.
But it’s not going to be easy for the new office to gain its desired portion of market share. Sovereign Bank, Bank of America, Banknorth, Citizens Bank and others already have established presences in the area, and all are competing for more market share than they currently hold. The market itself has not been fast-growing, either, Handly said.
“It’s going to be an uphill road [for People’s],” he noted.
‘A Pretty Vibrant Hub’
The bank has used a typical strategy to gain some market share. The new office employs seven people, all of whom are from the area. The new regional manager and loan officers are all experienced bankers who have worked in the area for years, and bring with them many old contacts.
The bank intentionally hired local people with a good knowledge of the market, according to Tom Pantello, People’s senior vice president of commercial real estate finance.
“They’re going to know where the good opportunities are,” he said.
So far, it seems to be working. Pantello has the first loan request from the Burlington office sitting on his desk.
“We are anticipating it will be a success,” he said.
Although the office is about an hour away from any other People’s offices, it is not entirely isolated, he said. Its manager reports to the eastern market of People’s Bank, which includes Hartford, New Haven and Norwich.
The size of the $11 billion bank also is expected to help it compete, however.
“They clearly have the resources of a big bank, and if they choose to bring those resources to bear, they can be a formidable competitor,” Handly said.
People’s executives originally considered a location for the office that was closer to its Connecticut operation, but chose Burlington after a two-year initiative aimed at getting business from nearby markets like Rhode Island and Massachusetts. The effort gave the bank a good idea of where its target audience was located, according to Pantello.
“It’s not all that new for us,” Pantello said. “Our business doesn’t stop at the borders.”
The two-year initiative gave the bank a chance to familiarize itself with areas outside of Connecticut, and to get to know the players in those markets. It was successful, Pantello said, and the bank found good business opportunities in surrounding markets, sometimes following existing Connecticut customers across borders and granting loans for projects in other markets.
Because of the success of the initiative, People’s decided it was time for a physical presence in Massachusetts, Pantello said. The bank originally explored locations closer to home, such as Worcester and Marlborough, but decided on Burlington because of the opportunities there, he noted.
Burlington also offers the office’s employees ease when traveling because it is near Interstates 95 and 93, and the town offers nice restaurants and other amenities for the staff.
“It’s a pretty vibrant hub of business,” Pantello said.
Pantello added that he would like to explore the possibility of opening more commercial loan offices in Massachusetts, but said the area and the businesses there would have to be just right.
The new staff is made up of the office manager, Patrick Lee; the first loan officer, Judith Cogan; three other loan officers; and two support staff members. Lee and Cogan are from the Massachusetts communities of Sudbury and Newton, respectively, and have worked at banks in the area for many years.
The new office is located in an office building at 50 Mall Road in Burlington.
The bank also has a subsidiary called People’s Capital & Leasing Corp. in 42 states. The company focuses on printing, packaging and trucking fleet financing.
