The private-equity company Federal One Holdings LLC has completed its acquisition of Cranston-based Domestic Bank, and Nicholas W. Lazares, Federal One’s chairman and CEO, has stepped into the CEO’s role at privately held Domestic. Lazares answered five questions about the purchase and the future for Domestic.
PBN: What made Domestic Bank so attractive that you and your investment group would want to buy it?
LAZARES: In early 2008, we made a strategic decision to seek to acquire a stable banking platform which we could build upon to take advantage of the opportunities that would inevitably arise from a widespread banking crisis. Our goal was to find a bank with good loan quality that would provide a solid foundation for growth. Having evaluated over 15 potential acquisitions, Domestic was the most attractive target. We like the Rhode Island and Massachusetts markets as they have proven to be more stable over time than many other regions of the country. We particularly like Domestic’s retail presence in Wal-Mart stores and its strong record of serving a broad spectrum of retail and business customers. Domestic has also been a leader in banking the Latino community, which is a growing and historically underserved segment of the market.
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PBN: Is this a good time to buy a bank? Or were the terms of the deal so good that it couldn’t be turned down, even if the timing wasn’t the best?
LAZARES: I believe that there has never been a better time in recent history to buy and grow a bank. Many banks are preoccupied with asset quality problems and have cut staff and curtailed lending. That creates a real opportunity for a well-capitalized, growth-oriented bank. We acquired Domestic for a very fair price so we are now able to use our substantial capital base to grow the business and expand services.
PBN: What difference will the bank customers – existing depositors and borrowers – notice now that Federal One Holdings has taken over? What changes won’t they notice?
LAZARES: We seek to make the transition seamless to existing depositors and borrowers. At the same time, we will implement changes to significantly improve the customer experience. Our new director of retail banking, Martie Dwyer, has recruited a strong team of seasoned bankers who will supplement our existing retail division and bolster service levels for all our business and retail customers.
PBN: Where do you see Domestic a few years from now? Same size? Bigger?
LAZARES: We have substantial capital resources which will allow us to expand Domestic’s presence and influence in the local banking market.
PBN: Is Federal One Holdings actively looking for more acquisitions? Why or why not? If so, where?
LARARES: We are currently evaluating other acquisition opportunities in the Rhode Island and Massachusetts market area.
