Former Boston bank partners back with separate ventures

Here is the smallest morsel of business news you’re likely to digest today: A new bank branch just opened in Copley Square.

It’s worth mentioning that the Admiral’s Bank office (they insist on calling it a banking center) opening Thursday because there is an interesting Boston story behind that small event. It’s about the important role timing plays in the business of lending and borrowing money.

Admiral’s Bank was created about two years ago when Nick Lazares and a group of investors, without fanfare, bought a small, capital-challenged institution in Cranston, R.I.

Lazares brought an unusual collection of investment partners - including General Catalyst, the Cambridge venture capital firm best known for high-tech holdings, and a private equity firm from Kansas - to pump lots of capital into the new acquisition, with plans to make it grow.

Lazares had already spent many years in Boston as co-chief executive of Capital Crossing Bank. He and Capital Crossing’s other co-CEO, Rick Wayne, were former tax attorneys who built the place into a $1.2 billion bank from the ground up by purchasing big batches of loans wholesale from other institutions motivated to sell at a discount. This can be very profitable - if you’re careful.

Lazares and Wayne sold Capital Crossing when competition from bigger players and interest rate trends made business much tougher by 2006. The deal closed early the next year, which in retrospect looked like an ideal time to sell.

The buyer for Capital Crossing? Lehman Brothers Holdings. Good thing the owners got their $210 million in cash: Lehman went bankrupt in 2008.

The next few years were hard on most banks, and who knows how Capital Crossing would have fared as a small independent bank in the wholesale lending business. At a time when large parts of the financial market practically froze, the safety of the sidelines was appealing.

But not for long. “I started looking around for something else to buy,’’ Lazares says. “The whole banking business was crumbling and it seemed like a good time to move back in.’’

Now Lazares is indeed back in business, working from an office in the Hancock tower. Admiral’s Bank is growing quickly and now counts about $600 million in assets - thanks to plenty of capital contributed by his investors.

So what happened to his colleague Wayne? He’s only a few blocks away, running another banking company from an office in the Prudential tower.

Wayne led his own group of investors in 2010 to acquire a controlling interest in Northeast Bancorp, a publicly traded holding company that owns a retail bank based in Lewiston, Maine, and now counts $595 million in assets.

Wayne hired veteran Boston-area banker Claire Bean to serve as his chief operating officer and former Citizens Bank executive Heather Campion as his top administrative officer.

Wayne was friendly on the phone the other day but declined to talk about business because his company is preparing to raise more money in a public stock offering.

Admiral’s Bank and Northeast Bancorp have two things in common. Both count on a strategy of buying loans at a discount to fuel much of their growth.

But unlike Capital Crossing, both also operate other businesses that offer more diversification.

Northeast’s portfolio of loans purchased from other lenders increased by more than $50 million during the second half of 2011, according to regulatory filings.

But the company still operates a conventional bank in Maine with 10 branches as well as loan production offices and investment centers. Northeast is also promoting new Internet banking efforts.

Admiral’s Bank also counts on a portfolio of wholesale loans to grow. But it also operates a big business making home improvement loans, and from its new offices in Boston now offers the kind of high-touch, one-on-one customer service that feels a lot like private banking.

Neither of these companies look like a conventional small bank. The people running them sought out investors in unusual places and found people who saw opportunities in the rubble of the banking crisis.

Nick Lazares and Rick Wayne worked together for many years building a Boston bank and got out at the right time. Now they’re back to try it again, but this time in their own separate ways.