Michael M. Ciaburri is certain that New London, Conn.’s resurgence will attract regional and money-center banks sooner or later, which is why his 4-year-old Southern Connecticut Bancorp is acting now.
The company, based down the coast in New Haven, expects to open its second bank subsidiary in New London in the third quarter. Bank of Southeastern Connecticut would give the city of 27,000 its first local bank since 1997, when Liberty Bank of Middletown bought First New London Savings and Loan Association Inc.
Mr. Ciaburri, Southern Connecticut’s president and chief operating officer, acknowledged that others might think his company is expanding too quickly. Its lead subsidiary, the $82 million-asset Bank of Southern Connecticut, reported its first annual profit last year — a modest $191,000.
But New London’s growing economy makes it too risky to wait for the New Haven bank to gain firmer footing, Mr. Ciaburri said.
“Timing is everything, and we felt that some other bank might beat us to the punch,” he said. “I suspect that Webster [Financial Corp.] and some of the other larger players will be opening de novo branches in New London” within a few years.
The $17 billion-asset Webster, of Waterbury, is the largest banking company based in Connecticut.
After two decades of decline, New London began percolating about six years ago; the recovery was spurred by the opening of two casinos just outside the city.
The city received another shot in the arm in 2001, when the pharmaceutical giant Pfizer Inc. moved a research division and 2,000 high-paid employees to New London.
Ned Hammond, New London’s economic development coordinator, said the effects of the casinos and the influx of corporate jobs have reversed a slump that actually began in the 1950s, when the suburban boom eroded the city’s role as southeastern Connecticut’s retail hub.
“Things had gone downhill for a long time, but in the last five years the growth has definitely picked up,” Mr. Hammond said.
“Our residential market is booming,” and housing cannot be built fast enough, he said. “We’re seeing a huge amount of interest from developers out of New York and Greenwich. They’re calling all the time.”
The turnaround is evidenced in New London County’s unemployment rate, which dropped to 3.4% at yearend, from 4.8% in 2003, according to the state’s Department of Labor.
To run Bank of Southeastern Connecticut, Mr. Ciaburri tapped Dan Dennis, who was the chief executive of Norwich Savings Society before Peoples Bank of Bridgeport bought it in 1998.
Mr. Dennis, 60, who started out as a commercial lender, said the new bank would target professionals and owners of small and midsize businesses.
According to Mr. Ciaburri, even though Mr. Dennis has been retired for two years, he is still regarded as one of the region’s premier bankers.
“We jumped on him as quickly as we could,” Mr. Ciaburri said. “I consider him Mr. New London County.”
Moving into New London would open several opportunities for Southern Connecticut, including commercial and deposit business from the Mashantucket Pequot tribe, which owns the Foxwoods Resort Casino in nearby Mashantucket, Mr. Ciaburri said. The Pequots invested about $1 million in Southern Connecticut’s secondary stock offering last year but do not bank there, he said.
“We’re hoping we can develop a relationship,” and it will help to develop operations near Foxwoods, Mr. Ciaburri said.
Mr. Dennis said he would start hiring bankers and drumming up business in May, after he returns to New London from Florida, where he maintains a second home.
“I’m going to take off my shorts and bathing suit and put on my suit and tie,” he said.
