Hartford Business Journal

HARTFORDBUSINESS.COM | July 18, 2022 13 in both states. The publicly-traded community lender opened its first Connecticut branch in Granby in 2013, followed by one in Enfield the following year. Executive Vice President Kevin O'Connor said Westfield was "very pleased" with the branches' performance and opened two more locations, one in West Hartford — the bank's financial services hub for Connecticut — and another in Bloomfield. "We have significant market share for many of the communities we serve in Massachusetts, and while we continue to grow in Massachusetts, we want to expand with future growth into similar communities in Connecticut," said O'Connor, whose bank has $2.6 billion in assets. "I'm not sure why others have followed, but it's very similar to the types of communities and customers." In 2018, PeoplesBank, the largest community bank in western Massachusetts, acquired First National Bank of Suffield to establish its first Connecticut location. It's planning a new 2,000-square-foot banking center at 50 Cedar Ave. in South Windsor, and last year opened a branch in posh West Hartford Center. The South Windsor location will be its fifth in the state. PeoplesBank, with $3.6 billion in assets, is a mutual lender, which means it can generate profits but cannot be bought or sold. President and CEO Tom Senecal said recent merger activity has created more of a need for community banking. "We feel that mergers and acquisitions create disruptions in the market, and when disruptions occur people usually flock to community banks or mutual banks," Senecal said. Some borrowers, especially commercial ones, like dealing with a community bank rather than a larger operation because decisions are made more efficiently, he said. Also, they have access to people who are familiar with the community in a brick-and-mortar setting. "The local decisions are important on the commercial side as it expedites the decision-making process — it doesn't go through a large bureaucracy of decision makers," Senecal said, noting that roughly 70% of PeoplesBank's commercial lenders are in Connecticut. East Hartford-based American Eagle Financial Credit Union, with $2.4 billion in assets, also crossed state lines, when it won approval in 2019 to serve customers in Massachusetts' Hampden County. Relationship building While mutual banks and credit unions have different business models, they both focus on the value afforded by a local approach to banking. In Freedom Credit Union's case, entering the Connecticut market will mean establishing business relationships with new customers already familiar with their organization. "Many people that live close to the state border shop, dine, seek entertainment, etc., by crossing the border between the states," Welch said. "We had businesses that had relationships with the staff of the credit union that wanted to bank with us, but also did not qualify for membership." Freedom's Enfield branch, less than 7 miles from its Springfield, Mass. headquarters, is expected to open in July. Freedom has about 32,000 members and has seen significant growth in assets due to lower consumer spending during the pandemic, with "steady but slow" membership growth, Welch said. Kevin O'Connor 1Q 2017 1Q 2018 1Q 2019 1Q 2020 1Q 2021 1Q 2022 BANKS 42 41 38 35 32 32 CREDIT UNIONS 101 97 94 91 89 86 Source: Federal Deposit Insurance Corp.; National Credit Union Administration Number of CT banks and credit unions shrinks amid M&A activity 120 100 80 60 40 20 0

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