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36 2019 Economic Forecast • Worcester Business Journal • www.wbjournal.com B a n k i n g & f i n a n c e W ill home prices peak? The median sale price for both single- family homes and con- dominiums increased year-over-year in October as inventory levels remained low across the state, according to the latest numbers from Boston real estate data firm The Warren Group. In Worcester County, the number of home sales for the first 10 months of the year was down nearly 1 percent, less of a drop than the state average and in Middlesex County, where the number of sales was down more than 2 percent. In the meantime, prices for the year were up 6 percent in Worcester County, hitting a median of $275,000, and up 7 percent in Middlesex County, hitting $552,000. How much higher can prices go? A cooling stock market may signal an economic slowdown ahead, which would affect prices. So could legislative changes, such as Gov. Charlie Baker's housing bill, which aims to create 135,000 new housing units by 2025. The bill, which would work in part by lowering the threshold for approving certain local zoning changes, is no lock to pass into law, particularly at the end of this legislative session. Interest rate questions With low unemployment rates and a humming economy, the Federal Reserve has slowly raised interest rates in the last three years and has signaled it intends to continue inching the rate up. Fed Chairman Jerome Powell has occasionally been the target of criticism from President Trump for not keeping the rate lower, and in late November, he said the interest rate was just below neutral after saying a month prior it still had a long way to go before reach- ing that point. The rate could continue rising into 2019 or, with recent upheaval in the stock market and a potentially cooling real estate market, the new year could see the Fed start to pull back or hold steady. More commercial lending opportunities While banks largely took a break from mergers and acquisitions locally in 2018, a few did make moves toward offering more commercial lending opportunities in Worcester. Wells Fargo, one of the country's largest banks, opened just its fifth New England office this year with a new foothold in Worcester. The office on Park Avenue caters to the local business community with credit, treasury man- agement and deposit products and ser- vices for companies with revenue of $20 million or more. San Francisco-based Wells Fargo first opened New England offices in 2015. It is now in Boston; Providence; Portland, Maine; and Manchester, N.H. Rockland Trust is making a move into Worcester for the first time. The bank said it will open a commer- cial lending, invest- ment management and treasury man- agement office at 100 Front St. in down- town Worcester. The office will be helmed by Michael Crawford, formerly the executive vice president and chief operating officer of Worcester's Commerce Bank, which was acquired last year by Berkshire Bank of Boston Fidelity Bank has set up microloan funds to help small businesses in Gardner and Winchendon, two north- ern Worcester County communities where Colonial Co-Operative Bank, with which Fidelity has merged, previ- ously had branches. Fidelity has earmarked $300,000 for the fund, called The Colonial Bank Loan Fund-a Fidelity Bank Endowment, as part of a commitment it made when the merger with Colonial was announced. Housing prices are nearing their peak while interest rates kick up and more borrowing options present themselves >> Rockland Trust buys Milford National South Shore-based Rockland Trust continued its expansion across Massachusetts and Rhode Island with the purchase of Milford National Bank and Trust. Rockland Trust's $54-million purchase was the exception to what was otherwise a quiet year locally among bank mergers and acquisitions. The lull comes after a more active 2017, when Commerce Bank was bought by Berkshire Bank; Marlborough Savings Bank and North Middlesex Savings Bank merged to become Main Street Bank, and SpencerBANK and Southbridge Savings Bank merged to become Cornerstone Bank. Fidelity Bank reached an agree- ment last year to acquire the far smaller Colonial Co-Operative Bank. The tiny Milford National Bank had just three branches: two in Milford and one in Mendon. Its $301 million in deposits are now part of Rockland Trust, which already had a presence in Milford and has since said it will open its first Worcester office for commercial lending, investment management and treasury management. >> A marijuana banker Gardner-based GFA Federal Credit Union made a name for itself in September when it became the first bank to service the state's legal marijua- na industry. GFA has partnered with Safe Harbor Services, a Colorado financial services firm connecting can- nabis-related busi- nesses with financial institutions, to bring what was likely a much-hoped-for service to pot shops and growers. Until then, banks had been fearful of entering an industry still illegal federally, and payments could only be made by cash. GFA CEO Tina Sbrega said the credit union had been studying the move for more than a year, including looking into banking regulations to protect GFA, before deciding to be the first in Massachusetts to make the move. "We know they wanted to be treated as the legitimate businesses they are," she said of the industry's payroll and finance tracking needs. "You can't do that when you're wandering around with all kinds of cash all over the place." >> Berkshire Bank CEO steps down Michael Daly abruptly resigned in November as CEO of Berkshire Bank, an entity that doesn't quite have a major presence in Central Massachusetts in its own name but does through its pur- chase last year of Worcester's Commerce Bank. In Daly's tenure, the bank rose from a small regional bank based in Pittsfield with 300 employees to one with its head- quarters in Boston and 2,000 employees. Daly was replaced by Richard Barotta, Berkshire's president. Daly's departure was one of a series of shuffling of executive ranks at area banks this year. Among other moves, Francis Dauphinais was appointed as the new senior vice president and chief financial officer at Bay State Savings Bank, and UniBank named Douglas Moisan, a for- mer Commerce Bank finance executive, as its new chief financial officer and senior vice president and Gary Baxter as its chief information officer. Kristin Carvalho, the CEO of Milford National Bank and Trust, departed soon after its purchase by Rockland Trust. BankHometown lost its president and CEO, Michael Hewitt, who retired. Top banking & finance stories of 2018 Economic slowdown BY GRANT WELKER Worcester Business Journal News Editor New home construction has been slow to kick in for Worcester County. Edward Manzi, CEO, Fidelity Bank Kristin Carvalho, former CEO, Milford National W Tina Sbrega Michael Daly W