With the recent opening of a loan production center on Arlington Street in Boston and several new recruits to its lending division, Mansfield Bank says it is taking advantage of conditions that will favor small community banks in the city.
“It’s about opportunity. Right now, the Boston market is really hot, and it’s a good opportunity for a community bank like ours to come into the city,” Executive Vice President and COO Harold Horvat told Banker & Tradesman. “The city of Boston has been mostly dominated by larger banks, and some of the changes that have happened over the last decade have created an opportunity for community banks to come in and provide some of the services that maybe some of the larger banks are not doing.”
Horvat said that the consolidation of larger banks in the metropolitan Boston area, along with the banking crisis of 2008, have created ideal conditions for a community bank like Mansfield Bank. Norman Hayes, vice president, will lead commercial lending efforts at the new loan office, while Brendan Minich will handle residential mortgage loan originations in the Boston office. Mansfield Bank also recently added two commercial lending officers and one residential mortgage initiator to its Plainville, Easton, and Norton branches, respectively.
John Carusone, president of the Hartford, Conn.-based Bank Analysis Center, commented that the expansion into the Boston lending market is unusual, though certainly not unprecedented, for a community bank like Mansfield Bank. He was quick to add, however, that that doesn’t mean it’s necessarily unwise.
“They are abundantly well-capitalized, very profitable, and have a relatively clean loan portfolio, so they have all the financial muscularity to undertake any type of strategic initiative like this,” Carusone said of Mansfield Bank. “And the present environment favors community banks. Large, money-center, multi-national banks are still somewhat out of favor with the public, due to the banking panic of 2008 and the relative unwillingness to lend.”
Mansfield Bank reported its total assets at $371.6 million for its third quarter, ended Sept. 30, a 5 percent increase from the $353 million it reported for the same time period last year. The bank also reported $173 million in commercial loans, a 21 percent increase over the $143 million it reported for last year’s third quarter.
Community Bank ‘Aura’
Mansfield Bank executives emphasized their willingness to work with small- to medium-sized businesses and to consider deals that big banks might reject out of hand.
Senior Vice President and Community Reinvestment Act Officer Shanika Rogowski said Mansfield Bank had an advantage in being able to work with properties that might not saleable on the secondary loan market.
“A lot of unique properties wouldn’t necessarily qualify to be sold on the secondary market, so we have a portfolio loan” that enables Mansfield Bank to offer a little more flexibility than the big banks, she said.
“We’ve done a lot of brownstone conversions over the last five or six years, starting in the South End, and what we noticed is, we were getting more and more of a footprint in the community. Once we looked at the demographics, we said, we could make a difference in the city,” said Dan Conrad, first senior vice president.
“The real advantage is that we are a community bank, so what we bring to the city is the whole aura of a community bank. We have that personal service that sometimes you get lost in a bigger city bank. People still can call, get a lender on the line, and talk about their deal,” he added.
Horvat said the bank projects a 20 percent increase in loan growth next year, and he anticipates the new Boston loan center will contribute to about one-third of that growth.
Carusone characterized the move as the exception to the rule and said he has not seen many suburban banks making inroads into the metropolitan Boston area.
He added, “Boston is one of the most competitive banking markets in the country, so clearly they have their work cut out for them, and it’s not going to be an easy process, but the climate is right, their financial resources are significant, and they need to put more of that capital to work. I think it’s opportunistic, and with effort, it probably will contribute to their overall profitability in a meaningful way.”
Mansfield Bank, which is headquartered in Mansfield, has five branches in Bristol, Norfolk and Plymouth counties. Horvat said the bank does not currently have any other expansions planned beyond the Boston loan office.
Email: lalix@thewarrengroup.com
