David W. Glidden
As the COVID-19 pandemic recedes, Connecticut’s largest mutual bank is pursuing a commercial loan incursion into Hartford and the surrounding region.
While it’s the third-largest Connecticut-based lender by deposits, Middletown’s Liberty Bank has not historically been a big player in the Hartford market.
In fact, it currently doesn’t have a branch in the Capital City, but it’s starting to plant its flag. The bank just opened two new loan offices in Hartford, including one in the heart of downtown, at 100 Pearl St.
Indeed, Liberty has written a greater portion of loans outside of Connecticut than is typical for banks of its size, thanks in part to a strong niche in timeshare vacation property financing.
However, the bank, which has $7 billion in assets, is making moves to refocus its portfolio on more local turf up and down the I-91 corridor, and Hartford is seen as central to the effort, said CEO David Glidden, who sold his board on the strategy when it hired him just over two years ago.
“As I was looking at the organization, this was one of the areas that jumped out,” said Glidden, who previously worked for TD Bank. “We have a huge opportunity as Connecticut’s oldest bank and one of the larger banks headquartered here to look at pursuing commercial and industrial lending to small and medium-sized, privately-held businesses, as well as local real estate developers and investors.”
In Hartford, Liberty aims to seize upon a perceived opportunity created by the 2019 acquisition of hometown powerhouse United Bank by Bridgeport-based People’s United Bank, which is itself now being acquired by New York’s M&T Bank.
Liberty has hired key commercial lending experts away from competitors — like the former United Bank and KeyBank — to lead its New Haven, Hartford and northern Connecticut/western Massachusetts markets.
No one expects M&T or other local, regional and national players that compete in the Hartford market to cede ground willingly.
“We compete with everybody,” said Stephen Roche, a senior vice president and regional manager who leads Liberty’s Hartford commercial lending team.
However, a bank of Liberty’s size can make larger loans than smaller community lenders and its key decision-makers are more local than many of the increasingly larger banks.
“We can move quickly and we don’t have a lot of layers,” Roche said. “[Borrowers] like the idea that they can talk to a senior leader.”
Building local ties
While the pandemic suppressed borrower appetites, Liberty is sticking with its strategy as COVID-19 begins to fade into the background.
Besides opening two lending offices in the city in recent months, Liberty is also forging closer ties with key real estate developers.
The bank planted a significant marker in April, extending an $11 million loan to Shelbourne Global Solutions and LAZ Investments for their approximately $100 million ongoing apartment and retail overhaul of downtown’s Pratt Street.
While a bank of Liberty’s size can extend larger credits, Glidden said the Pratt Street loan is one of the largest the bank has done in the Hartford area in several years.
“I think other potential or prospective customers in the market will take note,” Glidden said of the Pratt Street loan.
That’s certainly part of Glidden’s game plan, which goes beyond one-and-done loans, or “hanging paper,” as he calls it. Key to the strategy is to build a relationship with a team of active developers that includes Lexington Partners’ Marty Kenny, who is also involved in the Pratt Street redevelopment, creating the potential to win future business.
Liberty is doing the same with developer Carlos Mouta in the city’s Parkville neighborhood.
The bank recently provided refinancing and rehab loans for several dozen of Mouta’s apartments and the two parties are now talking about a loan for the second phase of the developer’s expansive indoor food hall, Parkville Market, which has recent momentum following the city’s allocation of $4 million for the project from its overall pot of federal recovery funding.
Forging ties
As it ingratiates itself with Hartford developers, Liberty has thrown in a sweetener — or at least a token of good faith — in each instance: a lease.
Last November, Liberty opened its first commercial loan office in the city at 100 Pearl St., which is owned by Shelbourne. It’s also opening a mortgage lending office at 2074 Park St., which is owned by Mouta (opening a Hartford mortgage office was a requirement of a 2019 redlining-discrimination legal settlement between Liberty and the Connecticut Fair Housing Center).
Liberty also recently subleased a loan office over the border in East Longmeadow, Mass., at a property owned by a prominent local developer.
The leases are no coincidence, Glidden said.
“It’s part of the way I’ve always done business and the way I want Liberty to do business,” he said. “Everyone likes to do business with someone who does business with them.”
Shelbourne managing member Benjamin Schlossberg said his development partners — Alan Lazowski of LAZ Parking and Kenny — both had prior business relationships with Liberty and helped make the introductions between his team and the bank.
Benjamin Schlossberg
“They’re willing to lend in Hartford when a lot of others are not yet willing to work here,” Schlossberg said of Liberty.
Mouta, who is also relatively new to Liberty, said the bank seems committed to its Hartford expansion.
“They believe in not doing just the minimum,” Mouta said.
At least one outside observer says he sees merit in Liberty’s strategy.
John Carusone, president of the Hartford-based Bank Analysis Center, has been watching Liberty grow both organically and through acquisitions over the past 20 years.
“The institution has become a formidable banking powerhouse at this point,” said Carusone, who doesn’t count Liberty among his current list of consulting clients.
Glidden is wise to take advantage of lending opportunities closer to home, Carusone said. It offers a more balanced spread of geographies and other benefits.
“It will win style points among banking regulators,” he said.
While there could be plenty of competition for any geography with active commercial, industrial and real estate development sectors, larger regional or national banks with operations in this market may place higher priority on areas with greater population growth than Hartford.
“With the exception of Fairfield County, Connecticut is inarguably a slower growth market but a growth market nonetheless, and that offers opportunities to an enlightened and creative banking organization,” Carusone said. “What better opportunity is there than to move into the competitive banking void of the Greater Hartford market?”