Despite a “stipulation order” on capitalization from the FDIC, The Community”™s Bank”™s CEO said his bank will more than comply and continue to grow.
The order follows a February FDIC directive that the bank increase by $1 million its tier-one capital that is used as a government measure for adequately capitalized banks.
CEO Peter Hurst Jr. said the bank, which operates a single branch in Bridgeport, is targeting more than three times that amount from investors he did not identify by name.
The FDIC action was only the latest chapter in the unusual history of The Community”™s Bank, which was formed in 2001 from a trio of Fleet Bank branches in Bridgeport, Hartford and Bloomfield, following Fleet”™s acquisition of Bank of Boston. It has yet to branch out beyond its original location.
After selling off the Hartford County branches, The Community”™s Bank won awards in both 2004 and 2008 from the U.S. Treasury Department, which recognized its efforts in lending to distressed areas of Bridgeport, Hartford and New Haven.
In 2007, the GE Money subsidiary of Fairfield-based General Electric Co. deposited $3 million into The Community”™s Bank to support increased lending in its territory.
As of March, when it reported a net loss of $150,000, The Community”™s Bank listed $31.8 million in deposits at its 2574 E. Main St. branch, roughly flat from 18 months earlier, but well above the $20.8 million in deposits it held after divesting its Hartford County branches years before.
Still, the Bridgeport market has some $1.5 billion in deposits today, with more than $1 billion at local giant People”™s United Financial Inc.
People”™s United remains the dominant player on The Community”™s Bank”™s block in north Bridgeport, holding twice as many deposits at its single branch sharing the same zip code as of last June. (The Community”™s Bank also slightly trailed JPMorgan Chase in its own neighborhood, but was well ahead of branches run by Bank of America and TD Bank).
Hurst declined to discuss details of the FDIC order and the circumstances that led to its issuance, except to say that examiners focused on the company”™s capital ratios rather than its losses on loans that tripped up banks elsewhere.
“Our sweet spot is the commercial loans between $100,000 and $700,000,” Hurst said.
Under the agreement, FDIC mandated that The Community”™s Bank clear from its books loans that were classified as losses in a 2010 examination, either by collecting them or recording them as charge-offs.
The Community”™s Bank”™s board must also meet monthly to review management”™s running of the business, including new loans and those under varying stages of collection.
Hurst also holds the title of chairman; the company”™s listed vice chairman is Dr. Louis DeNaples Jr., a physician at Community Medical Center in Scranton, Pa. and a director of First National Community Bank in Dunmore, Pa.
The Community”™s Bank”™s board includes Pedro Wasmer, partner of Fairfield-based Wasmer Ventures; Christopher Gallo, a partner with BlumShapiro in Shelton; Barbara Bellinger, a retiree from People”™s United Financial Inc.; and Fred McKinney, president of the Greater New England Minority Supplier Development Council in Hamden.
