In Rare Move, Conn. Thrift Opens Branch in Big Apple

A Connecticut thrift is following its borrowers into New York City.

Stamford Federal Savings Bank, which despite its home base specializes in loans for renovating New York apartment buildings, opened a branch last month in Manhattan' Flatiron District.

The thrift, which has only one other branch, skipped 40 miles to boost visibility in its primary lending area.

"We have been very successful making real estate loans in New York City," said Steven H. Rice, president and chief executive officer. "Now we have a full-service banking office there as well."

Opening a Big Apple branch "is an unusual initiative for a small Connecticut bank," said John Carusone, president of Bank Analysis Center, Hartford, Conn. However, he noted, Stamford's specialty is also unusual for such banks.

Mr. Rice advised a group of investors who purchased Stamford in 1993 and then hired him as vice chairman. The thrift's assets are now $90 million, six times what they were then.

The focus on apartment lending has been the key to the thrift's growth, said Mr. Rice, a former deputy superintendent of banks for New York State.

"New York has many neighborhoods that make wonderful markets for us," Mr. Rice said. "Property restoration loans are complex. They can involve dealing with tenants and real estate market projections. They can be hard to handle if you aren't prepared for them."

Stamford's preparedness has impressed customers.

"Their rates are reasonable, and they are a lot quicker than other banks," said Gary Brown, a Fairfield, Conn.-based real estate developer who has financed two New York apartment buildings through Stamford. "It gives them a real advantage in this market."

Despite the new location, Stamford Federal still plans to expand in the southern Connecticut area where it is based, Mr. Rice said.

"We are bypassing other neighborhoods (by opening a branch in New York), but we are still committed to Fairfield County," he said. "Our lending strategy made New York City a natural place for us to go."

That said, Mr. Rice expects the New York branch to bring in deposits as well. He said that few savings banks have ventured into the historically industrial areas where many of his clients are now building apartments.

"We are making the loans to building owners," he said. "We would like to have the business of the tenants, too."

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