Bank rivalry and one-upsmanship seem to be alive and well in Waterbury, Conn., but it's a touchy subject for the two banks involved.
For over 60 years, Center Financial Corp. and Webster Financial Corp. have duked it out in the competitive banking market of south-central Connecticut. They're now the two largest stock institutions based in the state.
"Centerbank was always historically the big brother ," said one observer of the state's banking industry. "The relationships were always cordial, but there was always that competition."
Webster and its subsidiary, First Federal Bank, have approached Center's size only in the past few years. The two banks have coincidentally traded acquisitions in similar markets in New Haven, central Connecticut, and the Naugatuck Valley.
But Webster's role as also-ran changed suddenly last week, with announcement of its plans to buy 20 Fleet Financial Group Inc. branches and almost $500 million in deposits in the Hartford area. Fleet is selling them because of its pending merger with Shawmut National Corp.
On the same day, Center said it would buy Heritage Bank in Watertown, adding $61 million in assets to its total. But the Fleet branch acquisition and the pending purchase of Shelton Bancorp would push Webster to almost $4 billion of assets, well past Center's $3.5 billion.
"Webster has become a much more expansive institution," said a source in the state's banking industry. "The rivalry will persist, except that now there's a new big brother."
But the banks' executives say that they aren't hostile competitors, or even rivals, and that they hate to discuss the relationship in those terms.
"Surely we are 'competitors,' because we're located in the Waterbury and New Haven markets," said Robert J. Narkis, chairman and chief executive of Center Financial. "But it may be more perceived than real in terms of a rivalry."
"It's natural for a rivalry to be attributed to institutions ... located in the same community that have similar objectives that are carried out in similar ways," agreed James C. Smith, Webster's president and chief executive.
The two institutions have followed similar paths from their traditional thrift backgrounds. They've gradually shifted strategies to focus more on commercial banking and to expand their operations in some of the same markets.
"There is a healthy, competitive rivalry ... that makes Connecticut's banking customers the beneficiaries ," said John Carusone, president of Hartford's Bank Analysis Center. "Both have aspirations for being statewide institutions and have made measured progress toward that goal."
But Mr. Narkis and Mr. Smith downplayed the acquisitions and competition, saying they're just trying to add to profitability and shareholder value, without paying any attention to what the other institution is doing.
They also say that they have a lot of respect for each, and that they aren't interested in growth for growth's sake.
"We cannot be in a market just for the sake of being in a market," Mr. Narkis said. "We'll go because it makes good business sense and adds shareholder value.
"Who knows? Maybe we'll be back at No. 2 (sometime). But that's not important.
"It's not how large we are, but how profitable," Mr. Narkis said. "That's what's important."