James C. Smith, chairman and CEO of Waterbury-based Webster Bank, said he believes the economic recovery for Southern New England will start in the first quarter.
That’s why the bank he heads is preparing to boost lending by $400 million in 2010—the amount it received in federal bailout money more than a year ago.
Smith said the subsidiary of Webster Financial Corp. expects to originate more than $850 million in new loans to businesses this year.
That will help stimulate economic growth and job creation across the bank’s four-state region, Smith said.
Webster has $17.8 billion in assets, with 181 banking offices.
Smith said the Southern New England market, which Webster Bank mainly serves, is experiencing less financial stress than the nation in terms of bankruptcies and delinquencies, and that the prospects of an earlier recovery in the region “appear to be good.”
“Our economy is at an inflection point and poised to resume growth,” Smith said in a recent interview. “We think that the market is going to improve, so we want to help stabilize our customers and help finance their growth.”
Smith added that as the largest independent commercial bank headquartered in New England, “we believe we have a special responsibility to provide the credit that businesses in our region need to grow and get Americans back to work.”
Smith said the lending environment in 2009 was challenging and that many commercial borrowers, including Webster, retrenched because their sales were down and they had less need for working capital.
Total loans and leases held by Webster Bank fell by about $1.5 billion from September 2008 to September 2009, but Smith said the bank’s lending in Southern New England, where its core franchise is located, remained about flat.
Smith said the overall decline in total loans and leases was a result of various factors including a retrenchment by the bank in some of its out of market lending, as well as a move by the bank to securitize $700 million in residential loans.
“Webster’s loan balances in the Southern New England market were pretty much unchanged from a year ago,” Smith said.
In terms of 2010, Smith said the bank sees significant growth opportunities in several lending areas, particularly for small-market business and professional customers like accountants, lawyers and engineers.
Smith said investing in those types of businesses will drive the economic recovery in Southern New England.
Webster also plans to boost its middle-market lending to companies with sales over $100 million, increase residential mortgage and home equity loans, and modestly increase its credit card business, Smith said.
New Deals For Bank Execs
Southern Connecticut Bancorp, the parent company of The Bank of Southern Connecticut, has inked new deals with its two top executives for 2010.
Under the agreements, which went into effect Jan. 1, John H. Howland, the company’s president and chief operating officer, will receive an annual base salary of $200,000, according to a U.S. Securities and Exchange Commission filing.
In 2008, Howland made a base salary of $194,077, but his total compensation was $222,625 including a $13,250 bonus, SEC filings said.
Stephen V. Ciancarelli, the senior vice president and chief financial officer of Southern Connecticut Bancorp, will receive an annual base salary of $165,000.
In 2008, Ciancarelli received a base salary of $101,192, and his total compensation was listed as $108,149, according to SEC documents.
Both will also be eligible for salary increases and other merit bonuses at the discretion of the board of directors and to participate in the profit-sharing or 401(k) plan.
They also will be provided health and life insurance, and reimbursed for certain business expenses.
Furlough Loans
The Connecticut Labor Department FCU in Wethersfield is offering “furlough loans” to state employees, who are being required to take days off without pay because of Connecticut’s budget problems.
The credit union is offering the loans through Jan. 31 at a rate of 6.99 percent.
“This helps our membership manage their budget for the decreased income as a result of the furlough,” said Marie Kinard, the credit union’s CEO.
Greg Bordonaro is a Hartford Business Journal staff writer.
