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When Robert C. DiGennaro arrived in Suffield, Conn., in 1971, he decided the only thing that was sleepier than this idyllic bit of exurbia was its banking.
Suffield hasn't changed -- it's still a town where the beauty of farms is matched by their unproductivity -- but at DiGennaro's hands, the town's banking has. The institution he now heads, Suffield Savings Bank, has in the last decade been a regular innovator in the banking business. Its latest moves have brought it a captive real estate company to feed DiGennaro's voracious appetite for mortgages, and have taken it a couple of hundred miles overland into the world of Maine banking.
Even in the days when interstate bank acquisitions hardly bring a yawn anymore, DiGennaro's acquisition caused some comment. The planned purchase of Coastal Savings Bank not only brought Suffield the last thrift institution of its size available in Maine, but the prize had been aggressively sought by much larger players.
On July 9 Suffield Savings announced an agreement to acquire Coastal Savings in a $53 million stock exchange that represented about 215% of Coastal's book value. While DiGennaro concedes the acquisition will dilute short-term earnings and book value, he argues that the addition of Coastal's financial strength and 12 branch offices along Maine's affluent and expanding south coast will create a sturdy $484 million financial services company. He is not looking back.
Until that transaction, the bank's major acquisition activity had involved two deals -- one of which didn't close. The losing deal was a complex, and eventually abandoned, effort to acquire the troubled Heritage Savings and Loan Association of Manchester, Conn. The winner was its real estate brokerage subsidiary. In July 1984, Suffield acquired Westledge Associates Realtors of Avon, Conn., the largest real estate brokerage in the Hartford area, which specializes in offering large homes. The brokerage was aquired to give Suffield the first crack at financing home purchases arranged by Westledge; the unit now generates one fourth of the bank's mortgage loans.
"To my knowledge, their configuration is unique," says William N. Walling Jr., vice president for research at Moseley Securities Corp. in New York. "The real estate and interstate -- I don't know anybody who is doing that. It sets them a...