It’s been a little over a year since Norwich-based Dime Bank first announced plans to expand into Hartford County by opening branches in Glastonbury and Manchester.
But despite a year in which the pandemic continues to impact business, Dime Bank CEO Nick Caplanson said his bank has zero regrets on the expansion.
“It’s gone way better than our prediction,” Caplanson said. “We thought there would be demand in Hartford County for community banking and that was absolutely right. As soon as we opened the doors in December 2020, customers were coming in and opening accounts and it’s continued ever since.”
Like many community and mutual banks, Dime Bank, with $1.6 billion in assets, is filling a vacuum created in Hartford County after a number of community banks were taken over by larger banks.
“There’s been a lot of consolidation, a lot of mergers in the banking industry, and we’re finding that [some] folks don’t want to do business with a large, out-of-state bank,” Caplanson said. “They’re finding out that smaller community banks like Dime can compete with the big guys and actually do a better job because it’s a more personal business for us.”
Caplanson said Dime can provide the personal service a larger bank can’t, such as faster loan approval, smaller loans catering to small businesses, and overall, less bureaucracy.
Other banks that have expanded into Hartford County recently include Torrington Savings, Thomaston Savings, Ion and Collinsville banks.
“There’s plenty of business for everybody,” Caplanson said. “What’s happening is that community bankers are re-educating people to the benefits of local banks. The real competition is from the larger regional and national banks.”
As of June 30, Dime Bank had $33.3 million in Hartford County deposits vs. $847 million in overall deposits, according to data from the Federal Deposit Insurance Corp. That made up 0.07% of the nearly $50 billion in Hartford County deposits held by FDIC-insured banks.
‘Far exceeded expectations’
Caplanson said Dime Bank’s foray into Hartford County “has far exceeded our expectations in terms of new accounts and connections with businesses. We have probably 1,000 new customers in less than a year — that’s pretty substantial.”
“Our expectations for these branches, once they’re open for a while, is for each of them to exceed $50 million in deposits,” Caplanson said. “We will easily get there.”
Caplanson said Dime’s focus on commercial lending, encompassing real estate and general business loans, will continue at its Hartford County branches.
“Medical is a big focus of ours and we’ve excelled at it for well over a decade — a lot of doctors and dentists, a lot of medical-related labs,” Caplanson said.
Home loans are a traditional business that everyone understands, he said, but Dime partners with local builders.
“We have our focus areas but we’re capable of doing loans in any industry and extending the traditional home and consumer loans to individuals,” he said. “One thing we do that you don’t see too often is construction lending for someone looking to build a house. They can come to us and get a loan. It’s not something you can do at every financial institution but we do them — and we do them a lot.”
Dime’s commercial lending focuses on local, community-based businesses and small or midsize companies.
“On our own, we will do close to a $20 million loan, which covers the vast majority of our market,” Caplanson said.
Dime Bank doesn’t market to large or Fortune 500 companies so it would typically not get a request for a $50 million or $100 million loan, he said.
“But if we get a request for over $20 million, we could still do it but we would partner with other community banks,” Caplanson said. “But the majority of our loans are up to around $10 million.”
More personal service
Chris Cole, vice president and senior regulatory council for the Independent Community Bankers of America, said what’s happening in Hartford County is happening elsewhere in the country.
“What you’re seeing in Hartford County is not unusual. We’re seeing the void created when larger banks leave being filled by community banks,” Cole said. “Larger and regional banks are pulling out of many areas and community banks are either expanding or at least retaining what they’ve got.”
Cole said community banks are succeeding in areas like Hartford County because they’re able to provide more personal service.
“The focus in big banks is on remote banking,” he said.
Community banks have that technology, Cole said, but they also understand there are customers who like to bank in person.
“That’s the reason you’re seeing community banks expanding their branches,” he said.
Emphasis on technology
Caplanson said that when Dime Bank considers any future growth, it will take into account the increased use of online and mobile banking.
“During the height of the pandemic, people were not coming in person. A lot of people discovered technology — the more mature crowd, 50 and over,” he said. “Some are tech savvy and some are not. But they discovered how easy it is to do business electronically. And it’s changed how we are approaching our business.”
So if Dime can get a good deal on a physical location and make it work, they’ll consider it, Caplanson said.
But he believes the growth of online banking is where Dime’s future lies.
“Technology — that’s where there really is a huge opportunity to continue this growth trend,” he said. “Fewer people are walking into branches looking for a convenient, remote way of interacting with their financial institution. We’re placing a lot of emphasis on the technology side.”