Two more Connecticut community banks have finalized public stock offerings, continuing the wave of in-state lenders turning to capital markets to bolster their balance sheets.
Farmington Bank, which was formerly a mutual savings institution, last week raised $172 million through its initial public offering, while Naugatuck Valley Financial Corp. raised about $33.4 million.
Bank officials say the changing, stricter regulatory environment along with the need to invest in growth opportunities are driving the decisions to go fully public.
And they aren’t alone.
Over the past year, a handful of community lenders in Connecticut have ditched the mutual model by going public. That includes Willimantic-based SI Financial Group Inc., which raised $52 million in a stock offering.
Rockville Financial recently became a fully public institution raising $170 million in a stock offering.
John J. Patrick, Jr., the chairman, president and CEO of First Connecticut Bancorp, which is the holding company for Farmington Bank, said his company doesn’t plan any major operational changes with the new cash.
There are no plans for mergers or acquisitions, but the bank will continue to expand through new branches in untapped markets, which was a strategy the bank embarked on a few years ago. Patrick said the bank, with 16 branches and $1.5 billion in assets, also wants to expand its mortgage lending business and continue to lend to small-and-medium size businesses.
Patrick said tighter regulatory requirements, including increased capital and reserve requirements, played a major role in creating the need to raise more money.
In all, the bank sold 17.2 million shares of its common stock at $10 per share. Patrick said the offering was oversubscribed, which was a signal the market has confidence in the bank’s future.
“We are going to continue to do what we’ve been doing,” Patrick said. “We’ve proven we can grow organically in the marketplace.”
Meanwhile, Naugatuck Valley Financial Corp., with $886 million in assets and 19 branches, issued 4.2 million shares of common stock at $8 per share. About 250,380 shares were purchased by the bank’s employee stock ownership plan.
Hartford 21 loan extended
Northland Investment Corp. has received another reprieve on the $80 million loan for its Hartford 21 residential-retail tower in downtown Hartford.
Citizens Bank has agreed to extend the maturity date of the loan to Jan. 31, 2012, with the option to extend it even further to January 2013, city records show.
The construction loan was due to mature this year. Citizens Bank has agreed to modify the loan about a half dozen times since 2004.
Hartford 21 is one of Northland’s most prized assets downtown that the Massachusetts-based company developed from the ground up. Northland has had problems filling up the retail section of the property, although it has had more success lately. The apartment units in the 39-story building have maintained a strong occupancy rate in the mid-90 percent range.
Northland has two other Hartford properties in foreclosure — CityPlace II and Goodwin Square — and lost another office tower — the Metro Center — to foreclosure.
Union Savings expands
Danbury-based Union Savings Bank has opened its newest full-service branch in Monroe.
The branch at 411 Monroe Turnpike is the company’s 29th brick and mortar foothold in the state.
Raymond T. Giovanni is the assistant vice president and branch manager for the Monroe location, which offers a wide range of personal and business banking and investment products, as well as a full-time commercial lender and mortgage originator.
Meanwhile, Joseph J. Greco, the bank’s executive vice president and corporate development officer, has been named president of the Connecticut Community Bankers Association. Greco was appointed by CCBA’s board of directors during the organization’s annual meeting on June 11. He will serve a two-year term.
Before Greco’s appointment to president, he served as CCBA’s vice president for two years.
Managing director named
New York-based financial services company Northern Trust has named Brian P. Donovan as the managing director of its Stamford office.
Donovan joined Northern Trust last year as a senior vice president and wealth advisor. Prior to joining Northern Trust, he served as senior manager focused on tax, estate planning and financial planning for high net worth clients at Ernst & Young in Stamford.
Greg Bordonaro writes the Financial Sense column every other week. Reach him at gbordonaro@HartfordBusiness.com.
