NorthEast Community Bancorp Inc. is ready to make a gutsy move — an aggressive push into Boston that also involves originating its first single-family mortgages in roughly two decades.
NorthEast, of White Plains, N.Y., hired nine loan officers earlier this month to pursue mortgages in the Boston suburbs. The $437 million-asset thrift company will also originate loans in eastern Massachusetts for single-family homes, duplexes and multiplexes that house up to four families.
The push comes because Kenneth Martinek, NorthEast's chairman, president and CEO, says he believes the Boston area is growing. He also senses an opportunity after People's United Financial Inc.'s July 1 purchase of Danvers Bancorp Inc., which was among the 15 biggest banks in Boston.
"With all of the consolidation, there is a lot of confusion in the marketplace," Martinek says.
"There is a good deal of resentment in the community" about Danvers' sale, he adds. "In some ways, the community feels betrayed that a local bank sold out to an out-of-state bank. That may sound hypocritical since we're an out-of-state bank, but a lot of people have lost jobs in that town because of that acquisition."
Brent DiGiorgio, a spokesman at Bridgeport, Conn.-based People's United, declined to comment.
NorthEast has had an interest in Massachusetts for some time. It entered the state in mid-2009 with branches in Danvers and Plymouth. The move had an immediate impact; those branches accounted for roughly a third of the company's total deposit base in less than a year, Martinek says.
Lawrence Kaplan, a banking lawyer at Paul, Hastings, Janofsky & Walker, says there is reason to believe a community bank like NorthEast can succeed in suburban Boston. "I think the business case is easy to make," he says.
"It's very realistic for a bank like this to dip their toe in the water" in Boston, Kaplan adds. "You typically think a sophisticated city like Boston has these big banks, but that doesn't mean a community bank can't fill a niche."
