JOHN CARUSONE – ‘Not without precedent’
The Bank of Greenwich, a de novo that will be Greenwich’s only locally run bank, has received a large infusion of capital after a local investment company bought a large chunk of its stock.
It is unusual to find a corporation eager to purchase such a large amount of stock from a new bank, according to John Carusone, president of the Hartford-based Bank Analysis Center, but other de novos have found such developments to be favorable.
“It’s an unusual development, but not without precedent,” Carusone noted. The institution, Plainfield Greenwich Holdings, probably recognizes the value of a community bank in a market like Greenwich, he said.
The investment is also a good development for the bank, according to Carusone.
“Capital is king and any safe harbor to find it is a prize,” he said.
Carusone estimated that about two-thirds of start-up banks raise capital via community offerings with a very small amount of institutional ownership, but that about one-third take advantage of institutional investment.
Information was not immediately available on Plainfield Greenwich Holdings, which The Bank of Greenwich’s Chief Executive Officer Robert Oca said is located about a block away from the bank’s office at 165 Mason St.
“It was a wonderful opportunity that came about,” Oca said.
The investment company has confidence in the officers who will run the bank and in their business plan, Oca said, and the bank hopes to work with the company in the future.
“That’s what makes it so exciting for us,” he said.
Selling a large portion of stock to an institution – according to the state Department of Banking, Plainfield Greenwich Holdings filed an acquisition statement to buy more than 10 percent but less than 25 percent of the bank’s issued and outstanding common stock – was not part of the bank organizers’ original plan, but it was a good opportunity, Oca said. The bank opened its initial stock offering in March, and has extended it past its initial deadline of April 14 until July 28 or sooner because of the interest shown by the community, Oca said.
The bank likely will open after Labor Day, Oca said.
According to the Department of Banking, Plainfield Greenwich Holdings is a Delaware limited liability corporation. Many companies that are based across the country incorporate in Delaware because the state has a very favorable and well-established set of corporate laws. Considerable precedent has been established, and although some states – including Connecticut – have changed their laws to be more favorable to business, many older companies are incorporated there, according to Pat Lapera, senior vice president of the Bank Analysis Center.
“The standard has always sort of been Delaware,” he said.
‘Very Encouraged’
Organizers of The Bank of Greenwich are hoping the bank will succeed because of its strong local ties.
“The Bank of Greenwich is focused on our local community, which makes the positive response from the Greenwich community so important,” said Stephen C. Thurlow, chairman of the organizers’ group, in a prepared statement issued when the bank announced its initial stock offering. “We are very encouraged by the interest shown in the offering so far. Now our goal is to expand the offering to include even more of our neighbors.”
Greenwich was once home to several banks, but many were acquired or merged earlier this decade. The Greenwich Bank & Trust Co. opened there in 1998, but merged in 2003 with Westport National Bank, forming Connecticut Community Bank. Another bank, Putnam Trust Co., now operates as a division of The Bank of New York.
“The recent mergers of banks in our area reinforces our belief that a bank, based in Greenwich and managed by local individuals with a vested interest in the community’s well-being, will be a welcome addition to the town’s landscape,” Oca said in a prepared statement.
In addition to the Mason Street office, the bank’s organizers also plan to open a branch in the Cos Cob section of Greenwich at the beginning of 2007.
Oca has more than 30 years of commercial banking experience. He was president, chief executive officer and organizer of the Bank of Westport, which opened in 1998 and was acquired by Fairfield County Bank in 2004. A lifelong resident of Greenwich, he was also president, chief executive officer and director of Connecticut Community Bank.
Organizer James E. Calkins also has been in the commercial banking industry for more than 30 years. He served as executive vice president, chief lending officer, director and organizer of the Bank of Westport. He was also senior vice president, chief lending officer and director of Greenwich-based Connecticut Community Bank.
Thurlow is a former NFL running back who played for the New York Giants and Washington Redskins. He spent 35 years on Wall Street and recently retired from his position as a director of the UBS Investment Bank in Stamford.
Other organizers are George D’Angelo, John Fareri, William Gallagher, Noel Levine, Anthony Melillo Jr., Richard Sontag and Thomas Steen.
