In the dozen years through 2004 only two community banks were founded on New York's Long Island. Now two have opened there in four weeks - in the same Nassau County town.
Community National Bank opened Wednesday in Great Neck after raising more than $30 million of capital in a private placement.
Stuart H. Lubow, its president and chief executive officer, said that larger out-of-town banks dominate the village's banking market. Investors believe there is room for a local bank that focuses on small-business lending, he said.
Community National has already closed two sizeable commercial loans, Mr. Lubow said Wednesday, and its pipeline is growing fast. "I'm very enthusiastic," he said "The response has been stronger than we expected."
The other new Great Neck start-up is Golden First Bank, which Golden First Mortgage Co. opened March 14.
The two openings are part of a mini-surge in the state. Regulators say they know of 14 groups that are organizing start-ups and have received detailed business plans from three of them.
Empire State Bank opened for business last June 28 in Newburgh, in Orange County. Philip Guarnieri, its president and chief operating officer, said the bank start-ups are byproducts of the corporate scandals that have came to light in the past four years.
Many investors now find putting their money in a heavily regulated industry much more attractive, Mr. Guarnieri said.
Indeed, start-up banks seem to be having little trouble raising money. Mr. Guarnieri said Empire State's organizers raised about $20 million - though they had sought only $11.5 million to $16 million - with no help from investment bankers.
"I couldn't believe how people would write checks," he said.
Mr. Lubow's bank, Community National, actually received commitments for more than $40 million from investors.
"We had to return about $10 million because of the maximum we'd set on the offering," Mr. Lubow said. "I was turning people away, telling them, 'Don't even bother to send your money.' "
Community National is Mr. Lubow's second start-up bank. In 1997 he helped found Community State Bank in Teaneck, N.J. That bank had four branches and $150 million of assets when it sold itself to Oak Ridge, N.J.-based Lakeland Bancorp Inc. for $34 million in August 2003.
Mr. Lubow, 47, said Community State opened with $9 million of capital. Community National, with more than three times that much, should grow much faster, he said.
Mr. Guarnieri said he expects to see bank start-ups throughout New York in the next few years. A group interested in starting a bank in Yonkers recently invited him to brief it on the process, he said, and other groups "are constantly calling us to ask how we did this or how we did that."
A 34-person group headed by Fred DeCaro, who founded a bank in Stamford, Conn. in the mid-1990s, plans to open one this summer in Port Chester, N.Y.
The two other start-up banks for which the state has received detailed plans would be in Clarence, near Buffalo, and in Flushing, in New York City's borough of Queens.
There has not been so much start-up action in New York State since 1999, when eight banks opened. Only five did so in the next four years. The last Long Island start-up was American Community Bank, which opened in Glen Cove in January 2000.
