Hartford Business Journal

6 Hartford Business Journal • February 10, 2020 • www.HartfordBusiness.com E. Hartford's America's First in acquisition mode as smaller credit unions seek technology, scale By Matt Pilon mpilon@hartfordbusiness.com A $36-million credit union that recently moved its headquarters to East Hartford from Trumbull has immediately begun making moves, with plans to double in size over the next five years. America's First Network Credit Union (AFNCU) recently won approval from the state Depart- ment of Banking to acquire North Haven-based Connecticut Federal Credit Union, and it has applied for permission to acquire Hartford's CT Transit Federal Credit Union. America's First has about $36 mil- lion in total assets and nearly 5,000 members, making it Connecticut's 37th largest credit union. Connecticut Fed- eral adds another $7.7 million and 1,582 members served by its single branch. In addition, if regulators OK the proposed deal with Connecticut Tran- sit — which is more than 80 years old and serves Hartford division transit employees and their families — America's First will assume another $1 million in assets and 653 members. In all, the two deals would grow America's First's assets 25 percent. "This is completely within our stra- tegic plan," said Nicholas Moalli, who became CEO of America's First in 2017. "Our goal is to reach over $100 million in assets by year-end 2025." Doing that would certainly mean more acquisitions, as well as organic growth. Though Moalli was unwill- ing to discuss any specific targets, he said the plan is to pursue smaller credit unions that serve "select employer groups," or SEGs, like America's First does. There are approximately 60 such credit unions in the state. The biggest is Connecticut State Employees Credit Union with $1.9 billion in assets. As it seeks to roll up SEG credit unions, America's First certainly won't be target- ing an institution of that size, but Moalli said there are many smaller credit unions that may be feel- ing the pressure of technology. (SEGs generally have charters that permit them to serve members from specific employers, as opposed to community- based credit unions, whose charters restrict them to certain geographies). Moalli said America's First's recent move to East Hartford was the result of a Trumbull real estate shakeup by Uni- lever that resulted in the credit union having to move its longtime branch there to a nearby, smaller location. America's First's East Hartford branch, which it acquired in 2017, is more publicly accessible, and Moalli said it's also intended to make a statement that his nonprofit coop- erative serves many different groups. "We have a lot of other SEGs now," he said. The East Hartford branch used to be the home of East Hartford Fed- eral Credit Union. Today, America's First operates it under the name "East Hartford Financial, a division of AFNCU." That speaks to some of AFNCU's strategy. It aims to acquire smaller credit unions that have history and a loyal base of members, but that also need help evolving in a com- petitive banking landscape, where mobile apps and other products have become table stakes. "We saw in the marketplace a need for smaller credit unions to join together while trying to main- tain their identify and service at a local level," Moalli said. "They want the scalability of a merger but their members still want the same feel." Each of the two credit unions America's First is acquiring or seeking permission to acquire lack mobile apps. Moalli said their members would also be able to access additional real estate and auto loan offerings, retirement products, and access to a surcharge-free credit union ATM network called Allpoint. Nicholas Moalli, pictured inside America's First Network Credit Union's East Hartford home office, has big growth plans. HBJ PHOTO | MATT PILON ipated state pension contributions, a growing demand for Medicaid services and a potential shortfall at the University of Connecticut Health Center. Lamont would also invest more money into workforce development by beefing up the Office of Work- force Competitiveness with nearly $700,000 for an executive director and other staffing. OWC would move from the Department of Labor to the Office of Policy and Management, as previously reported by HBJ. OPM Secretary Melissa McCaw called the budget proposal "finan- cially responsible" and "pro-growth." "I want the narrative today to be that Connecticut is in a strong posi- tion with respect to a record Rainy Day fund," McCaw told reporters at the Legislative Office Building. The reserve fund has about $2.5 billion now and is projected to grow to $2.8 billion in the coming fiscal year. McCaw said Lamont feels it is "crucially important" that lawmakers not tap the reserves, so that the state is in a better position for a potential economic downturn. New business incentive Lamont's budget also details a new incentive program — called Jobs CT — that will reward com- panies in specific industries (finan- cial services, aerospace/defense, IT, life sciences, manufacturing and digital media, among others) that create at least 25 jobs paying 85% or more of the median household income in the municipality where the jobs will be located. The company would be reim- bursed an amount equal to 25% of the state income tax paid by the new employees. The benefit would increase to 50% of the state income tax paid if a company is located within an Opportunity Zone. The payments would start at the beginning of year three and run through year seven. Lamont's budget caps the pro- gram's annual spending at $40 million. >> Lamont's Budget continued Developer sues Rocky Hill over 'illegal' $10M hotel, restaurant denial A Westbrook developer has sued the town of Rocky Hill citing an "illegal" denial of his proposal to build a $10-million hotel and restaurant on Silas Deane Highway. Developer Ron Lyman, of Sam Center LLC/REL Inc., filed the lawsuit in November just weeks after the town's Planning and Zoning Commission unanimously denied his application to allow for construction of a four-story, 126-room Woodsprings Suites Hotel and 5,660-square-foot LongHorn Steakhouse restaurant on the east side of Silas Deane Highway adjacent to the Interstate 91 northbound on-ramp at interchange 24. Greater Hartford hotels sold Chicago hotel investment and management firm Arbor Lodging Partners has acquired a 12-hotel portfolio that includes Farmington's Courtyard by Marriott, Rocky Hill's Residence Inn by Marriott and Wallingford's Homewood Suites by Hilton to its now 37-hotel portfolio. The firm will now begin renovations at each of its new properties, making upgrades to guest rooms, guest bathrooms, lobbies, common areas, meeting spaces and other areas. Milone & MacBroom acquired Global environmental consultancy SLR Consulting, of southeast England, has acquired Cheshire engineering and landscape architecture firm Milone & MacBroom Inc. SLR Consulting says the purchase will expand its engineering and planning services. Terms of the deal weren't revealed. Hydroponic lettuce grower eyes $6M N. Britain facility A planned $1-billion data center in New Britain could be a boon for various commercial big-data users, but there's another potential benefactor: A Connecticut lettuce farmer. Chaim Tovia, project manager at H2O Farms, which has a hydroponic lettuce greenhouse in Guilford that's reached capacity, told HBJ he's in talks with the New Britain data center developer, EIP LLC, to build a $6-million greenhouse and related facilities nearby that would consume heat and carbon dioxide produced by the Connecticut-made fuel cells that will power the data center. H2O farms would pipe the heat and CO2 to a nearby property to aid its grow operation, Tovia said. Tovia said that CO2 enrichment could boost the company's lettuce yield by 20 percent, and reduce heating costs. LATEST HEADLINES

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