Five years after being subject to a federal consent order, the former Admirals Bank is back with a new name and a new strategy looking to take advantage of a hole its leaders say they see in the market.
Less than three years after rebranding with a new name and mission, the former Admirals Bank has again changed its focus and taken on another name: 42 North Private Bank.
Launched in August, the new name replaces the short-lived Ethic, A Wealth Bank. Along with referencing Boston’s location on the 42nd parallel, the name points to the bank’s new business model. Instead of comprehensive wealth management services, the bank now focuses on private banking – deposit and lending services that will support the region’s independent financial advisers and their high-net-worth clients.
For President and CEO William Buccella, who joined the bank less than a year ago, the focus on private banking will let the institution offer products and services within the region’s wealth management space without competing with financial advisers, while giving the bank a path toward growth.
“We are unique in that we’re not interested in being a broad-based community bank,” Buccella said. “We are interested in focusing on the private banking aspect and enhancing those services that are provided by independent financial advisers. It is unique in many ways.”
Void in the Market
Admirals Bank had moved toward the private banking model in 2011, said Dimitri Nionakis, the bank’s executive vice president and chief operating and legal officer. After changing its name from Domestic Bank in 2010, the bank had relocated its headquarters from Rhode Island to Boston in 2013.
Admirals Bank then had a difficult year in 2017, when it reported more than $19 million in losses. The bank also became subject to a federal consent order and saw a plan fall apart to sell off most of the bank’s assets to a group of private bankers.
Marc White Jr., originally part of the group that wanted to buy the bank, came on as CEO and led the bank through a rebranding to Ethic, A Wealth Bank. White left in March 2021 and now heads Clarendon Private, Brookline Bancorp’s wealth management business.
William Buccella
Previously president of U.S. markets at Wilmington Trust Co., Buccella joined the bank in November 2021.
Ethic, A Wealth Bank was a good name, Buccella said, pointing to the bank’s strategy to offer broad-based wealth management services to high net worth and ultra-high net worth customers. But he added that succeeding as a broad-based wealth management firm comes with challenges.
Companies like Fidelity and Charles Schwab have made wealth management technology available to registered investment advisers, allowing them to operate independently of big banks and brokerage firms. Private equity capital has also flowed into the wealth management space, adding to the competitive market.
This transformation of the wealth management market has left a void that Buccella said 42 North Private Bank can fill, prompting the name change. The bank now focuses on providing independent financial advisers with access to private banking capabilities that they might have lost after leaving a big bank.
What the bank won’t do is offer broad-based wealth management. When he meets with these advisers, Buccella said he lets them know that 42 North Private Bank no longer has a registered investment adviser on staff.
“We’re only focused on deposits and lending,” Buccella said. “It’s very attractive to [advisers] to have a terrific delivery platform and a service culture which reflects their service culture, and I’m not competing with them.”
A Mix of Products
To support these clients, 42 North Private Bank offers standard deposit products, like checking accounts, as well as options for longer-term deposits and the cash position in an investment portfolio.
Some of the lending products are traditional as well, such as residential and commercial real estate lending. Other loan products will be geared toward specific needs of high and ultra-high net worth individuals, including securities-based lending. The bank plans to look at more lending products in the future, Buccella said.
The bank will focus on the Greater Boston, New England and New York markets, Buccella said, pointing to the size of Greater Boston’s wealth market and the diverse industries that provide opportunities for a private bank. He added that with a national bank charter, 42 North Private Bank could do business in every state.
The bank will also have a new address in October. With leases expiring for its offices in Boston on High Street and in Rhode Island, the bank will move to new space in Canton at 250 Royall St.
Though the new office will have a client-facing area, Buccella refers to the bank as branchless.
Being branchless was Admirals Bank’s goal when it first moved to the private bank model 11 years ago, Nionakis said. Then and now, the bank plans to distinguish itself through service, he added.
Plans for Growth
Buccella’s primary goal is to introduce the bank’s brand and services to the private wealth market. From there, he wants to grow the balance sheet and the staff, including adding a private banker and customer service and operations staff.
The bank as of June 30 had $204.8 million in total assets, down 17.5 percent year-over-year. Net loans of $164.88 million were down 18.4 percent compared to June 30, 2021, according to FDIC data, and total deposits were $179 million, down 19.9 percent.
Buccella does not have a target in mind for the bank’s size, but he did say 42 North Private Bank’s growth would be organic.
Diane McLaughlin
“If I went out there and purchased another institution, the chances are they would have some components that maybe would not allow us to continue to sell the notion that we’re not a competitor,” Buccella said. “I’m not really interested in doing something from an M&A standpoint that would have us deviate from our core strategy around being solely focused on private banking.”
Nionakis, who joined Admirals Bank in 2010, said registered investment advisers who have heard about 42 North Private Bank have had an “overwhelmingly positive” reaction to the changes.
“I think we have always tried to be innovative and creative, and with innovation and creativity comes a little bit of risk,” Nionakis said. “There were some bumps in the road to get there, but here we are, and I think we made a tremendous amount of progress in the past year and a half.”
