James E. Gardner
Business banking ‘niche’
New banks are set to open in two of the poorest cities in the Bay State. But the soon-to-be chief executive officer of one of them, Nuvo Bank & Trust, in Springfield, said there’s so much business opportunity there he can’t wait to open the doors in November.
“There are 17,000 businesses in Hampden County, and 9,000 within five miles of our headquarters,” said James E. Gardner, a retail banking specialist with a 35-year career in the industry, much of spent it at Woronoco Savings Bank in Westfield. Most recently, he served as CEO at Merrimac Savings Bank in Merrimac and the Polish National Credit Union in Chicopee.
“Being a state-chartered bank and a commercial bank is really our niche,” Gardner said. The large number of small- to medium-sized businesses “in need of better services” in Springfield, which has a number of credit unions but is dominated by larger, regional banks, as well as a potential local competitor, the stock-owned, commercial Bank of Western Massachusetts, seemed like too great a chance to pass up.
Nuvo’s president and chief operating officer, Jeffrey S. Sattler, is a commercial lending specialist. Like Pedro Arce, the founder of Lawrence-based Veritas Bank, which also is in the formative stages, he worked most recently at TD Banknorth. Like Gardner, he has lived and worked in the Springfield area for many years.
“Jeff’s commercial background will be instrumental. We need to build our book of business on the commercial side,” Gardner said.
Gardner, who’s 56, and Sattler, 49, are seeking to raise at least $15 million in capital before they apply to the state Division of Banks for their Certificate to Transact Business. They’ve had their Certificate of Public Convenience and Advantage, which they needed to start raising capital, since April, and expect results on another major regulatory hurdle, being approved for FDIC deposit insurance, this month.
Nuvo’s organizers already have raised $9 million, most of it from Western Massachusetts investors, since April, Gardner said, exceeding the minimum $8 million required to open under a state charter in Massachusetts. Gardner said the ultimate goal is to raise as much as $25 million in capital before the bank opens.
They expect to increase the bank’s assets to 10 times initial capital within three years, and with a $15 million startup base, initially would earmark $1.5 million for loans, staying within a self-imposed comfort range at the outset.
Gardner, Sattler and their management team, which includes Hampden County bankers Trenton E. Taylor and Shirley Simolari, and former Office of the Comptroller of the Currency bank regulator Eric D. Boecher, intend to raise all the capital in Massachusetts or through organizers with Massachusetts ties, Gardner said. They’ve been holding two or three meetings with potential investors each week, he said, including one planned for Sept. 19 at the Boston Harbor Hotel.
The minimum investment is 1,000 shares, at $10 per share. The average individual investment so far has been $50,000, and the maximum allowed will be 10 percent of whatever final capital amount is raised.
“Twenty percent of our shareholder base comes from [Springfield-area] small- to medium-sized business owners, who understand the impact the bank has on business owners here,” Sattler said. “Part of Nuvo Bank’s direction is to have a positive impact on the local economy. [The investors] like living and working here” and hope to make a difference in the local business climate, he said.
Nuvo Bank’s organizers have given themselves until Oct. 31 to raise capital; once that date arrives or before, if they raise enough money ahead of time, the private share offering will be shut off, Gardner said. Investors will benefit by supporting their local economy, through the bank, and through dividends once the bank starts to grow and profit, he said.
Catalyst for Growth
Massachusetts Bankers Association Senior Vice President for Government Affairs David Floreen said he thinks Springfield is a good opportunity for investors in general. “It has a reputation as a poor economy, but my understanding is that the city now has a balanced budget and is far from a ghost town,” he said.
“I think investors may well see an opportunity to step in Â… and provide a different kind of service,” Floreen said.
Former Massachusetts Bank Commissioner Michael Hanson, now an attorney in Norwell focusing on regulatory compliance, said he is on Nuvo Bank’s organizing team mostly because he knows Gardner.
“Jim was a client of mine both through Merrimac Savings and Polish National,” he said. “I’ve known him for years, and he’s a good banker and he knows that marketplace. And, that area needs a new bank.”
Hanson said a new, locally controlled financial institution will be a boon for the Springfield economy, which is rebuilding after some difficult years.
The bank’s planned headquarters at 1500 Main St. will be in a space that’s been vacant for at least a decade, Hanson added. “Talk about helping to revitalize the small-business community. All the political leaders are very excited about it.”
Gardner said Nuvo Bank’s decision to lease 10,000 square feet of space in the building, which is owned by Springfield-based Massachusetts Mutual Life Insurance Co., already has been a catalyst for growth.
Massachusetts Mutual subsidiary Babson Capital also will be moving into the mezzanine above the building’s lobby area this fall, he said.
Gardner said Nuvo Bank organizers are inspired and influenced by Springfield’s diverse cultural background, which includes a large immigrant population – and by the example of another Massachusetts bank that also serves a large city with many immigrants.
“One of our organizers was born and raised in Lowell,” he said, and through him, Nuvo Bank officials met with the management of 16-year-old Enterprise Bank.
“They have a lot in common with Nuvo Bank,” Gardner said. “Most importantly, they started their bank for a reason: they wanted to have an impact on an area that was struggling.”
Like Enterprise, he said, Nuvo Bank organizers want to locate in a region where it can make a difference.
They also want to build a product line that will “apply across generations and nationalities, and look at different cultural needs,” Gardner said.
A third planned de novo bank in Massachusetts, meanwhile, has failed in its efforts to raise enough startup money. New England Savings Bank received its Certificate of Public Convenience and Advantage from the Division of Banks in July 2006, but did not raise the needed capital by the time the certificate expired in July this year, according to DOB General Counsel Joseph Leonard. Organizers had hoped to open the bank in Hyannis with a focus on commercial lending.
