Sterling Bank bucks trend with expanded muni reach on Long Island
Sterling National Bank is branching deeper into New York State with a new municipal group focused on an array of non-public financing services during a time when loans to bond issuers are on the decline.
The Montebello, New York, company, which provides financing to local government banking clients through lease-purchase agreements, direct loans and the purchase of privately placed bonds, has tapped Tammy Leisen from Capital One Bank to lead its new Long Island municipal banking team as senior managing director and senior vice president. The new group also includes senior vice president Karen Bauer and vice president Caryl Caponi, who both also worked in municipal finance at Capital One.
Sterling, which acquired Astoria Bank last year, has worked with local governments in New York's Hudson Valley region for more than a decade and also has a separate team that provides credit to municipalities on a national level for infrastructure projects such as community lighting, solar energy and public parking. The bank is also looking at expanding its municipal banking business in New Jersey.
“The attraction to the Long Island market with its strong business, consumer and municipal demographics is a continuation of our overall corporate strategy to increase market share after the merger with Astoria Bank,” said Leisen, who managed a portfolio of more than 80 government clients the last six years as a senior vice president at Capital One’s Melville, New York, office. “Sterling considers the government banking sector in the Greater New York metro market strong and viable, and an excellent place to invest the company’s time and resources.”
Sterling is expanding its municipal banking business as some banks step back from loans and privately placed bonds for issuers. Kevin Dunphy, managing director and head of public finance for Mitsubishi UFJ Financial Group, said before last year’s sweeping federal tax changes, banks conducted a majority of their municipal bond business as direct placements or direct loans. Through June 30, private placement bond deals are down 56.5% compared to the year-ago period, according to data from the Securities Industry and Financial Markets Association.
“Given the reduction of corporate tax rates, banks are uncompetitive with the capital markets and retail investors,” said Dunphy. “In addition, some clients feel burned by banks increasing interest rates under margin rate factor clauses. Therefore, they said they would be reluctant to use the product in the future.”
Leisen, who before joining Capital One was a senior vice president at Wells Fargo for seven years, said Sterling will work with Long Island localities of all sizes with credit, deposit and treasury management support. She said herself and Bauer, who was previously head of government banking at Capital One, combine for decades of experience working with Long Island municipalities.
“These bankers have a strong business acumen and broad expertise managing municipal relationships and providing superior client service,” Tom Geisel, Sterling’s senior executive vice president and president of corporate banking, said in a statement. “The expansion of our Community Banking team is aligned with our growth aspirations, as we continue to increase our Long Island market share.”