Among the top banking stories of 2006 was the departure of John P. Burke (left), who retired at the end of September as commissioner of the Connecticut Department of Banking. He is shown above with Howard Pitkin, who has been named acting commissioner.

Rising interest rates and a slumping housing market worried bankers, the expansion of national banks across Connecticut became even more common, de novo banks opened steadily, and the longest-serving banking commissioner in the state’s history retired this year, making 2006 an eventful year for professionals in the financial services industry.

“I think the most significant thing Â… is the fact that we have seen interest rates escalate, we’ve seen an economic slowdown, we’ve seen the housing market slow down,” said John Patrick, president and chief executive officer of TD Banknorth Connecticut.

That had an impact on some financial institutions in terms of mortgages.

“There are factors in the marketplace showing that delinquencies are starting to rise,” he said, although he noted bankers at Banknorth have not yet noticed a lot of delinquencies. Homebuyers who purchased their homes during the sharp upturn in the housing market and who bought variable rate mortgages are now facing a challenge as interest rates move up.

Patrick also noted that the interest-rate environment has squeezed banks’ profit margins, and overall earnings for many banks were less this year. But, he said, the banking industry is doing well overall.

Big, national banks found Connecticut to be an attractive market in 2006, and demonstrated that by expansion in the state, especially in Fairfield County.

In July, Capital One, the Virginia-based financial corporation best known for its credit card business, acquired North Fork Bancorporation, a Long Island, N.Y.-based holding company that operates Superior Savings Bank of New England in Branford.

The Branford bank focuses on telebanking products, but also has a retail banking center.

The acquisition gave Capital One a local foothold, and signaled that Connecticut could be the next target in the company’s growth strategy.

In August, New York-based HSBC National Bank USA applied to the state Department of Banking to open a de novo branch in Stamford. That office has opened, and the bank now has another in Shelton.

The branches are retail banking offices, but the bank does not plan to have a mass-market presence. Rather, it focuses on establishing a niche presence with commuters to and from New York, who are already familiar with the bank, and with Fairfield County residents who have international banking needs.

In September, Stamford-based Patriot National Bancorp filed with the U.S. Securities and Exchange commission to offer 1.1 million shares of its common stock. The bank, which already has 10 branches in the county, will expand in Fairfield, Milford and Trumbull.

‘A Real Opportunity’

This year also saw one de novo bank open, and the announcements that three others are in organization. Darien Rowayton Bank, which combines retail banking, wealth management and financial planning, opened in April in Darien. It was the first de novo commercial bank approved by the state of Connecticut that will carry, from its opening, trust services, financial and retirement planning and investment advisory capabilities, as well as traditional banking products.

At the beginning of the year, a group of organizers announced the formation of a new community bank in Hamden, Quinnipiac Bank and Trust.

“It’s not like we’re reinventing the wheel,” said Mark A. Candido, president and chief executive officer, about the bank last March.

Organizers hope the bank will succeed because it will be in an area where there is a dearth of locally operated community banks. The Bank of Southern Connecticut is in nearby New Haven, but the region is dominated by large regional banks like Bridgeport-based People’s Bank and NewAlliance Bank, which is the result of the merger of several community banks.

In October, the bank extended its initial stock offering to early next year.

Another group of organizers announced the formation of a private bank that would focus on wealthy individuals in Fairfield County.

Stephen Carta, president and chief operating officer of Fairfield-based Harbor Bank and Trust, said he hopes the new bank will fill a much-needed niche in the area.

“I saw a real opportunity here in Fairfield County,” Carta said in a November interview.

Lending, from mortgages to business loans, will be a big part of the new bank, Carta said, and will be packaged with trusts and investments. The institution will appeal to those in the middle market, because those people or businesses have had to go to larger banks for their private banking needs, and at many of those, any client with under $10 million in assets is directed to a call center.

Organizers of Harbor Bank and Trust said they hope to have branches along the Shoreline, from Greenwich to Stonington.

As the end of the year approached, a New Canaan Bank announced it would take an unorthodox approach to growing and applied to establish a holding company and a separate de novo bank in nearby Fairfield.

Instead of opening new branches or acquiring another bank, the organizers of the 4-year-old Bank of New Canaan intend to start The Bank of Fairfield, and to create a holding company that will own both banks.

This year also saw the departure of a respected figure in Connecticut’s banking industry. Banking Commissioner John P. Burke retired two months ago after 12 years at the helm of the state Department of Banking.

“It’s time for me to go. Twelve years is long enough,” he said in October.

Burke, whose tenure as banking commissioner was the longest in known history, added, “We maybe need some fresh thinking.”

That fresh thinking has come in the form of Howard Pitkin, who was named acting commissioner and could serve as Burke’s permanent successor pending confirmation hearings during the next legislative session. Pitkin has been a part of the DOB for 30 years.