Hartford Business Journal

21 HARTFORDBUSINESS.COM | FEBRUARY 14, 2022 FOCUS: BANKING & FINANCE Business Banking by Community Bankers Coming Soon to Unionville James Murdick, SVP Chief Loan Offi cer Trish Tomlinson, VP Senior Commercial Loan Offi cer Antonella Calabrese, AVP Branch Manager, Farmington & Unionville Sherrie Dubois, Offi cer Cash Management Specialist Member FDIC | Equal Housing Lender ThomastonSB.com | 855.344.1874 president and CEO of Naugatuck- based Ion Bank, said smaller, mutual banks don't feel the same pressure to increase short-term profits like larger, publicly-traded lenders. That gives community banks more leeway to maintain brick-and- mortar locations, or even open new branches if they sense competitors are shrinking their presence in a particular community. A number of Connecticut banks — Torrington Savings, Thomaston Savings, Dime Bank, etc. — have opened new Greater Hartford branches in recent years, looking to take advantage of bank mergers that wiped out smaller competitors. "I don't have shareholders saying: 'Hey, you've got to cut these expenses and close these branches because you've got to add profitability to the bottom line this quarter,' " said Rotatori, whose bank has $1.8 billion in assets. "As a mutual bank, we think three years out, five years out. For us today, size is getting more and more important. And so, we think growing is the best answer." That doesn't mean small banks haven't economized. Hermann said newly-opened branches have smaller footprints (about 1,200 square feet) and less staff than they did in the past. Technology is taking a greater share of customer service, Hermann said, but consumers, particularly commercial borrowers, still want the option of in-person transactions, particularly for more complicated and high-value business, such as taking out a mortgage or commercial loan. Marketing outpost Hermann said he doesn't see his bank as a direct competitor to money-center institutions like Bank of America, which operate on a different level. "We all fill a different niche," Hermann said. "Our customers will not be serviced in the same way. There are larger multinational companies, there is no way we can service them. We don't offer trust services. We don't offer credit cards." Hermann said his bank underwrites loans up to $10 million, although it might partner with another bank to offer financing packages as large as $20 million. Ion Bank opened two new branches in 2021 – one in the Unionville section of Farmington and another in South Windsor. The South Windsor location is the 151-year- old bank's first venture east of the Connecticut River. Ion will close a redundant branch on Rubber Avenue in Naugatuck at the end of March, but has applied to open a new brick-and-mortar location in Southington this year. Ion can't match the billions in marketing of a large national bank, Rotatori said. Ion's entire annual budget is around $40 million, of which $1.5 million is devoted to marketing. With revenues under pressure from shrinking overdraft fees and interest rate margins, Ion must grow to cover overhead costs, Rotatori said. One way to do that is by expanding into new markets, and having a physical presence is key to drawing customers and business. The bank in November announced plans to buy New Jersey-based Lincoln Park Bancorp for $7.5 million, giving it its first presence in The Garden State. Rotatori said his bank expects to spend about $2 million building the new Southington branch, and another $500,000 annually to staff it with four employees and to pay other operating expenses. "I would love to say we will just do this digitally, I won't open a branch in Southington so we don't have all of the added cost," Rotatori said. "But we know the acceleration of adding customers will be more significant with building a branch and bringing in bankers who have relationships in Southington already." He added: "As much as people don't go to the branches as often, they like to know there is one available if they need it." 2015 0 250 500 750 1,000 1,250 2016 2017 2018 2019 2020 2021 No. of CT bank branches shrinks 14% over last 7 years Year 1,058 1,159 CT bank branches 1,235 Source: FDIC

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