Comfortable, Not Stuffy

Comfortable, Not Stuffy

Banking by Francis X. Gilpin | Associate Editor

In just two years, Lydian Bank & Trust vaulted to second place in the competition for deposits in one of the most lucrative markets anywhere, Palm Beach.

Can Lydian Bank & Trust duplicate the feat away from home at its second location in Tampa? Cary P. Putrino, who is leading Lydian Bank & Trust's Gulf Coast efforts, is optimistic.

"We don't have that big box approach, which many of the big banks have," says Putrino, who has more than 15 years of experience handling high net-worth clients in Sarasota and the Tampa Bay area. "Sometimes the larger you get, the more impersonal your delivery becomes."

Lydian Bank & Trust is getting bigger, too. Assets at the 5-year-old federally chartered savings bank grew 578% between 2000 and 2005. The thrift had assets of $1.6 billion at the end of last year.

But Putrino says there is no danger of Lydian Bank & Trust getting impersonal with customers.

For a Bay area office, Putrino chose downtown Tampa over the Westshore business district and St. Petersburg, where he resides. Lydian Bank & Trust is on the first floor of a low-rise next to the Tampa Theatre.

Putrino remodeled the space to make clients feel at home. "You walk in and you feel like you're in your own living room. You've got the leather chairs, the decor," he says. "Hopefully, when people walk through the door, they feel very comfortable. It's not stuffy, but it's like banking in your own living room."

Lydian Bank & Trust will call on Putrino to repeat the exercise along the Gulf Coast. "This will not be the only office we have over the next two to three years," says Putrino, speaking in his finely appointed Tampa digs. "We intend to open additional offices on the west coast. My focus right now is Tampa Bay and Sarasota."

Putrino answers the next question before it is asked. "Is there talk about Naples?" he says. "Yes."

Starting virtual

Lydian Bank & Trust started as VirtualBank, a fine name for an Internet-only institution chartered in the heat of the late 1990s Internet frenzy.

Chairman and Chief Executive Rory A. Brown, a certified public accountant with a banking background, raised $37.5 million in a private offering from the famous and the later notorious. Former Miami Dolphins and Hall of Fame quarterback Dan Marino was an early investor. So was Bernard Ebbers, sentenced to 25 years in prison last year for his role in the collapse of WorldCom Corp.

After two years, Brown changed focus with Internet ventures flagging. He switched from serving techies with banking needs to anybody at the higher end of the prosperity scale. Lydian Trust Co., which became the parent of the thrift, targeted those with a minimum of $10 million in liquid assets to invest.

In late 2002, VirtualBank went vertical and Brown opened a Palm Beach office that took a concierge approach. Assets doubled in a year. Lydian Trust's bottom line swung from a $2.8 million loss in 2000 to an $8.6 million profit by 2003.

Lydian Bank & Trust has suffered a few downs with the ups. In 2003, the thrift wrote off two mortgages that were fraudulently obtained. It also set aside a $496,000 reserve to cover expected losses from another $1.7 million home loan. Affiliates of the mortgage broker and the title company were found to have embezzled most of the escrowed funds that Lydian Bank & Trust had advanced for the loan, according to regulatory filings.

Otherwise, though, Lydian Bank & Trust was doing so well that a Northern Trust Bank of Florida banker in Tampa noticed it.

Lawyer to broker

Putrino, now 46, grew up in upstate New York. He came to Sarasota after law school in the mid-1980s after falling in love with Siesta Key, where his father had bought a condominium.

Instead of practicing law, however, he got a job at A.G. Edwards & Sons Inc. But he did more estate-planning seminars than retail brokerage. His legal background gave him credibility with retirees.

"It was a door opener," Putrino says of his law degree. "It allowed me to get in front of people who otherwise wouldn't have considered me to be their adviser because I was young at the time."

After three years at a bank trust division, Putrino joined Northern Trust in 1990. By last year, he had risen from the Venice office to running Northern Trust's Bay area operation.

"It's a good company and I enjoyed my time there," Putrino says of Northern Trust. But Putrino says Lydian Bank & Trust can draw on just about any financial product for a client and doesn't have to sell proprietary offerings, like he did at Northern Trust.

The difference was highlighted for him when, about 18 months before he left Northern Trust, one of his clients preceded him to Lydian Bank & Trust. Putrino says the client wanted financial advice that wasn't colored by an adviser who had incentives to push certain investment products over others.

"This particular client was intrigued and attracted to Lydian because of the open-architecture platform and the objectivity we bring to the table when it comes to investment management," says Putrino. "It's the objectivity. It's the conflict-free investment approach. We don't have any restrictions. We don't have investment products to sell or push."

Tampa differs from Sarasota

Aside from that, Putrino says he will keep doing what he was doing at Northern Trust. That includes having Lydian Bank & Trust partner with charitable and civic groups. He serves on the boards of BayCare Health System hospital network, Public Broadcasting Service affiliate WEDU television, and the Museum of Fine Arts in St. Petersburg. Those are places a private banker is likely to find new clients.

How does the Bay area differ from Sarasota when it comes to prospecting?

"Tampa Bay has a significant wealth concentration, but it's scattered," says Putrino. "When you are building a wealth management business or a private banking operation, you have to be very targeted in your marketing because these people don't necessarily live in one particular area. They're all over the place."

Seeking those with a net worth of at least $2 million, Putrino says they could be in South Tampa or Avila, Snell Isle or Belleair. "Sarasota has more concentrations of wealth," says Putrino, "in some cases, deeper pockets."

Putrino will be plowing those fields soon. "I'm excited about spending time there again," he says.