Hartford Business Journal

18 Hartford Business Journal • June 15, 2020 • www.HartfordBusiness.com By Joe Cooper jcooper@hartfordbusiness.com B efore COVID-19 began to spread across Connecti- cut in early March, The Retreat in Hartford took several precautionary steps, including going into immedi- ate lockdown. The affordable assisted-living facil- ity's early and aggressive reaction is likely why none of its 100 low-income seniors or 100 staffers have contracted coronavirus, despite the disease run- ning rampant in other nursing homes and senior-care facilities across the state, said Heidi Lubetkin, who has been the vice president of clinical sup- port services at The Retreat since its inception more than 15 years ago. "We skipped all the [response] steps and immediately went to the high-risk level," said Lubetkin. "Many [elderly care] facilities were electing to select the low-risk re- sponse at that point." The Retreat, located across the street from Hartford Hospital, in early March also restricted visitation and the use of common areas, and began stockpiling personal protective equip- ment (PPE). The facility, operated by nonprofit human-services organi- zation Community Renewal Team (CRT), also improved its air filtration systems, started hourly cleanings of high-touch surfaces and furloughed a third of its staff to reduce exposure in its seven-story building. "If we hadn't locked ourselves down until maybe residents were starting to cough, that would have ended up being like a match in our building," she said. The Retreat is among the dozens of Connecticut assisted-living facilities and nursing homes that have pre- vented the novel coronavirus from entering their doors, and the safety precautions they took offer clues into how to contain the spread of the deadly disease in senior-care facilities, which have experienced major COVID- 19-related deaths and outbreaks. The fact that nursing homes and assisted-liv- ing facilities have accounted for more than half of the state's 4,100 COVID-19-relat- ed deaths — and more than 20% of all coronavirus cases — has set off alarm bells and forced Gov. Ned Lamont to call for an inde- pendent, third- party review of the industry's preparation and response to the pandemic. Questions remain over why nursing home staff were not initially subject to widespread testing, and why government inspectors found infec- tion control problems in one out of every four Connecticut nursing homes Strong Defense Here's how some nursing homes blocked the spread of the deadly coronavirus Vernon Manor CEO Paul Liistro gets tested for COVID-19. Heidi Lubetkin, vice president of clinical support services at The Retreat in Hartford, says the assisted-living facility's immediate response to the COVID-19 outbreak has kept all of its residents safe. PHOTOS | STEVE LASCHEVER he said. "All banks are looking at losses, just like they did in every other cycle before this." Depending on how borrowers fare financially, those loan losses could impact banks over the next three quarters or so, Gilbert said. Low interest rates will also bur- den performance in the quarters ahead, Rauh said, because it means lenders are earning less on loans. The Fed cut its benchmark rate to between 0% and 0.25% in mid- March, which is where rates were during the last economic crisis. "Generally speaking, down rates are bad for banks over time," he said. "You'll start to see it play out in the next year or two." The pressures could lead to fur- ther consolidation in the indus- try, said Gilbert. She also predicts the pandemic, which has moved even more banking transactions online, will embolden executives to further shrink their brick-and- mortar branch networks. Forecasting is as hard as it's ever been, given COVID-19's unprec- edented, lightning-quick economic impact. Many economists believe it's a certainty that the country has entered a recession, though it won't be made official for months. "It's difficult to predict what's go- ing to happen in the future," Rauh said. "This is not a typical down cycle that's caused by an asset bubble. This is a healthcare crisis that has an economic tail to it." Still, for now there are few signs of prolonged negative impacts on banks as a result of suddenly unem- ployed borrowers defaulting on loan payments. That's partly because many banks have allowed 90-day payment deferrals. Connecticut banks and credit unions recently ex- tended their mortgage forbearance pact with the state by two months. Federal stimulus money could also be keeping borrowers on schedule. All of that may be disguising potential problems ahead, but loan forbearance has not yet been a major issue for some local banks. Only 12% of loans held by publicly traded banks in the Northeast are in forbearance, according to Gilbert. A similar metric is not available for non-public banks. In addition, the CARES Act encourages banks to be flexible, permitting them not to count de- ferred payments as troubled debt, which could otherwise impact their capital levels. How those borrowers who asked for relief fare in the months ahead will be an important met- ric to watch, Gilbert said. >> Earnings Volatility continued

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