A Michigan-based bank looking to expand its presence in New England is preparing to plant its flag in Greater Hartford.
Senior executives of Flagstar Bancorp Inc., parent of Flagstar Bank, say they are near a deal to lease up to 6,000 square feet of space in the Hartford region, where they expect to open an office with more than a dozen bankers focused on home and middle-market commercial lending.
The $13.6 billion Midwestern bank has also recently hired Steven J. Issa, a former regional CEO of Sovereign Bank, as their New England market president. Issa is leading Flagstar’s growth into several cities in the region, including Hartford, Providence R.I., and Boston.
“We know and understand the New England marketplace and want some diversification here,” Issa said. “With the economy stabilizing, we thought this would be a good time to expand in the market.”
Issa said Flagstar is already doing some business in Connecticut, but the bank is preparing to ramp up activity when it opens its new office and hires up to 16 bankers.
Flagstar’s CEO is Joseph P. Campanelli, the former chief executive of Sovereign Bank, who started his banking career in Hartford. Campanelli left Sovereign in September 2008 amid the company’s financial struggles during the downturn. Flagstar hired him toward the end of 2009.
In Connecticut, Campanelli said, Flagstar will focus on home lending operations for mortgage origination and direct commercial lending and business banking.
Flagstar may look at more retail banking in the state down the road and is looking to attract a deposit base in the state, but there are no other branches and offices planned in Connecticut right now, the executives said.
Flagstar’s entry into Connecticut is part of a larger plan by the bank to grow its presence in New England, Campanelli said.
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‘Troubled’ bank count steady
The number of troubled and problematic banks in Connecticut held steady at the end of the fourth quarter, and overall the state’s financial institutions appear to be in better shape than lenders in most other states, according to BauerFinancial, an independent bank analysis firm based in Florida.
Five out of the 54, or 9.3 percent, of Connecticut-based banks reviewed by BauerFinancial were rated as problematic, and all of them are located in Fairfield County.
They include the First Bank of Greenwich, Wilton Bank, Community’s Bank in Bridgeport, the Connecticut Community Bank in Westport and Stamford-based Patriot National Bank.
BauerFinancial rates banks on a zero-to-five-star system. Banks with two stars or less are considered troubled or problematic.
First Bank of Greenwich and Wilton Bank had the lowest ratings of zero stars.
Nationally, 12.8 percent of banks were listed as problematic by BauerFinancial.
All banks in Greater Hartford were given at least satisfactory ratings. Among the best performing banks in the region, according to BauerFinancial, are Liberty Bank in Middletown, Rockville Bank, Savings Institute Bank and Trust Co. in Willimantic, Thomaston Savings Bank and Windsor Federal Savings and Loan.
On the credit union front, 12 of 134 Connecticut nonprofit cooperatives were listed as “troubled” or “problematic” in the fourth quarter, compared to 11 in the prior quarter.
The 9 percent of troubled credit unions included Achieve Financial Credit Union in Berlin and Workers Federal Credit Union in Stafford Spring.
BauerFinancial bases its ratings on financial institutions capital ratios, income and nonperforming loans.
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Farmington Bank expands
Farmington Bank has opened its second West Hartford branch, located in the new Elmwood Plaza at 176 Newington Rd.
The new branch will be led by Todd Bower, vice president and branch manager. Bower has more than 20 years of banking experience in central Connecticut and comes to Farmington Bank from TD Bank, where he served as assistant vice president and store manager.
Greg Bordonaro writes the Financial Sense column every other week. Reach him at gbordonaro@HartfordBusiness.com.
