Farmington Savings Bank weathered a turbulent 2008 with $144 million in additional assets and an expanded capital base, and now President and CEO John Patrick said he plans to open new branches, enter new markets and expand the company’s mortgage and commercial lending businesses.
Patrick’s goal is to grow the bank from its current $1 billion in assets to $1.8 billion in assets over the next three years while maintaining its independence as one of the few remaining mutual savings banks in the state.
“Our every anticipation is to remain a mutual,” Patrick said. “That doesn’t mean we still can’t be a high performing company.”
As a mutual, Farmington Savings Bank doesn’t face pressure from shareholders. Patrick said the status allows the bank to take a longer term view of the market.
“It gives us a great deal of flexibility,” he added. “We don’t have to squeeze every penny out of the company each quarter. Many banks are touting their independence, but they are really owned by their shareholders.”
In terms of expansion, Patrick said the bank is looking to enter the Berlin and Newington markets while beefing up its middle market commercial lending and mortgage business.
Most banks took a beating in their mortgage loan portfolios last year. But Farmington Savings originated more loans last year than ever in its history.
Patrick said many mortgage lenders in Connecticut have retreated from the market due to the fallout from the subprime crisis, giving smaller, local banks a chance to expand their footprint.
The bank also plans to compete for young depositors by increasing its online banking presence. Admittedly, Patrick said, his bank hasn’t adopted all the bells and whistles on their Web site that some of the bigger banks offer to their customers.
“We understand from a demographic and marketing perspective that’s what we need to do,” Patrick said. “I think it’s going to be big especially if you want to capture younger customers.”
Of course, the bank doesn’t lack challenges. It still has to navigate an increasingly difficult recessionary environment, which Patrick thinks will last into 2010. He said his bank is also expecting a 40 percent increase in its FDIC deposit insurance premiums.
Gaining access to the federal government’s bailout package is another challenge. With Barack Obama seated as president, federal lawmakers are preparing to release the second half of the $700 billion bailout package, and much of it is expected to be targeted at community banks.
But Farmington Savings isn’t eligible for the money because as a non-public mutual savings bank the federal government can’t take an equity stake. Such a stake is required under the federal plan.
“We don’t need the capital, but we may be interested in getting some,” Patrick said.
Fairfield Hires Lawyer
The town of Fairfield has hired a private attorney to recover $42 million that it lost in its pension fund related to investments with Bernard Madoff, the man accused of running one of the largest financial schemes in U.S. history.
David Golub, a seasoned litigator of the Stamford-based law firm Silver, Golub & Teitell, said he will be filing suit in the coming weeks on behalf of Fairfield against firms that advised the town’s pension fund. Defendants may include hedge funds, auditors, money managers and consultants.
“Any professional who advised the fund will be part of this,” Golub said in an interview.
Golub said he’s also looking into anyone, besides Madoff, who knew or aided and abetted the alleged Ponzi scheme.
“There were groups out there that had to feed him billions of dollars in order for this thing to go on so long,” Golub said.
Madoff remains under house arrest in his comfy $7 million apartment in downtown Manhattan. Federal prosecutors have charged him with securities fraud.
The Fairfield suit would be one of dozens that have already been filed against Madoff and those linked to him.
Greg Bordonaro is a Hartford Business Journal staff writer.
