Liberty Bank targets Hartford commercial market for next big growth opportunity
As the COVID-19 pandemic recedes, Connecticut’s largest mutual bank continues a commercial lending foray into Hartford and the surrounding area.
Despite being the third largest Connecticut-based lender in terms of deposits, the Liberty Bank of Middletown has not always been a major player in the Hartford market.
In fact, it currently does not have a branch in the capital, but it is starting to plant its flag. The bank has just opened two new loan offices in Hartford, including one in the heart of downtown, at 100 Pearl St.
Indeed, Liberty has taken a larger share of loans outside of Connecticut than is typical for banks its size, in part thanks to a strong niche in financing timeshare vacation properties.
However, the bank, which has $ 7 billion in assets, is taking steps to refocus its portfolio on more local turf along the I-91 corridor, and Hartford is seen as a central part of the effort, said CEO David Glidden, who sold his board. on strategy when she hired him a little over two years ago.
“As I looked at the organization, this is one of the areas that emerged,” said Glidden, who previously worked for TD Bank. “As Connecticut’s oldest bank and one of the largest banks headquartered here, we have a huge opportunity to seek commercial and industrial loans to private small and medium-sized businesses, as well as real estate developers and investors. local.”
In Hartford, Liberty aims to seize a perceived opportunity created by the acquisition in 2019 of the hometown United Bank power plant by Bridgeport-based People’s United Bank, which is in the process of being acquired by M&T Bank from New York.
Liberty hired key commercial lending experts away from its competitors – like the former United Bank and KeyBank – to lead its New Haven, Hartford and northern Connecticut / western Massachusetts markets.
No one expects M&T or other local, regional and national players competing in the Hartford market to voluntarily cede ground.
“We compete with everyone,” said Stephen Roche, senior vice president and regional director who heads Liberty’s commercial loan team in Hartford.
However, a bank the size of Liberty can make larger loans than smaller community lenders, and its key decision makers are more local than most larger and larger banks.
“We can move quickly and we don’t have a lot of layers,” Roche said. “[Borrowers] like the idea that they can talk to a top executive.
Building local ties
As the pandemic has suppressed borrowers’ appetites, Liberty is sticking to its strategy as COVID-19 begins to wane.
In addition to opening two credit bureaus in the city in recent months, Liberty is also forging closer ties with major real estate developers.
The bank planted a big marker in April, granting an $ 11 million loan to Shelbourne Global Solutions and LAZ Investments for their ongoing approximately $ 100 million apartment and retail refurbishment of Pratt Street, in the center. -city.
While a bank the size of Liberty may extend larger loans, Glidden said the Pratt Street loan was one of the largest the bank has made in the Hartford area in several years.
“I think other potential or potential customers in the market will take note,” Glidden said of the Pratt Street loan.
It’s certainly part of Glidden’s game plan, which goes beyond one-off loans, or “hanging paper,” as he calls it. The key to the strategy is to build a relationship with an active developer team that includes Marty Kenny of Lexington Partners, who is also involved in the redevelopment of Pratt Street, creating the potential to earn future business.
Liberty is doing the same with developer Carlos Mouta in the Parkville neighborhood.
The bank recently provided refinancing and rehabilitation loans for several dozen apartments in Mouta and the two sides are now talking about a loan for the second phase of the developer’s expansive indoor dining hall, Parkville Market, which recently gained momentum following the city’s allocation of $ 4 million. for the project from its overall federal stimulus funding pot.
While looking at the Hartford developers, Liberty has added a sweetener – or at least a token of good faith – in each case: a lease.
Last November, Liberty opened its first commercial loan office in the city at 100 Pearl St., which is owned by Shelbourne. He is also opening a mortgage office at 2074 Park St., which is owned by Mouta (opening a mortgage office in Hartford was a requirement of a 2019 legal settlement against discrimination between Liberty and Connecticut Fair. Housing Center).
Liberty also recently sublet a loan office across the border in East Longmeadow, Massachusetts, on property owned by a major local developer.
The leases are no coincidence, Glidden said.
“It’s part of the way I’ve always done business and the way I want Liberty to do business,” he said. “Everyone likes to do business with someone who does business with them.”
Shelbourne managing member Benjamin Schlossberg said his development partners – Alan Lazowski of LAZ Parking and Kenny – both had previous business relationships with Liberty and helped make introductions between his team and the bank.
“They are ready to lend in Hartford when a lot of others are not yet ready to work here,” Schlossberg said of Liberty.
Mouta, who is also relatively new to Liberty, said the bank appears to be engaged in expanding to Hartford.
“They believe in doing just the minimum,” Mouta said.
At least one outside observer says he sees the merit of Liberty’s strategy.
John Carusone, president of the Hartford-based Bank Analysis Center, has observed Liberty’s growth both organically and through acquisitions over the past 20 years.
“The institution has become a formidable banking center at this point,” said Carusone, who does not count Liberty among its current list of advisory clients.
Glidden is wise to take advantage of loan opportunities closer to home, Carusone said. It offers a more balanced distribution of geographic areas and other advantages.
“He will gain style points among banking regulators,” he said.
While there can be a lot of competition for any geography with active commercial, industrial and real estate development sectors, large regional or national banks operating in this market may give higher priority to areas with higher population growth than Hartford. .
“With the exception of Fairfield County, Connecticut is undoubtedly a slower growing market, but a growing market nonetheless, and one that offers opportunities for a discerning and creative banking organization,” said Carusone. “What better opportunity is there than to step into the competitive banking vacuum of the Greater Hartford market?”