Hartford Business Journal

HARTFORDBUSINESS.COM | NOVEMBER 7, 2022 25 FOCUS: CREDIT UNIONS Through the first six months of this year, they reported $14.7 million in net income, up slightly from $13.9 million during the year-ago period, according to National Credit Union Administra- tion (NCUA) data. Their loan portfolios grew 5.2% during that time period to $8 billion, while the amount of money credit unions set aside to cover loans that may go bad in the future actually decreased to $43.5 million during the second quarter of this year compared to $47.8 million a year earlier. Tough economic times are really when credit unions shine, said Bruce Adams, president and CEO of the Credit Union League of Connecticut. Without stockholders to appease, not-for-profit cooperatives are more at liberty to adjust terms to help borrowers get through a rough patch, Adams said. When the onset of COVID-19 sent the econ- omy into a short-term tailspin, credit unions were allowing members to skip loan payments "left and right," he said. "The thing that sets credit unions apart is their ability to continue to do business and keep their borrowers healthy throughout bad times," Adams said. "We are building the resources now in order to be compassionate when it hits the fan for our members." Rising rate environment Connex Credit Union President and CEO Frank Mancini said his staff will keep an extra close watch on the performance of mortgage loans made over the past two years, when home values shot up dramatically thanks, in part, to an influx of buyers from New York. A downswing could see those values retreat quickly. "We will be watching that pocket because the loan-to-value (ratio) might be a little higher," Mancini said. Mancini said he's not anxious about a down- turn. Connex, with $932.7 million in assets, issued loans at a record pace in the past 18 months. In fact, Connex's loan portfolio has grown 20% over the last year — driven by new vehicle and mortgage loans — to $824.6 million at the end of the third quarter, NCUA data shows. Slowing demand could be good for his hard- working staff, he said. "It might be nice for them to have a little break in the pace they have been under over the last few years," Mancini said. Mancini is concerned, however, that rising interest rates could stall plans to lend $30 million to low- to moderate-income families over a five-year period. Rising interest rates have increased borrow- ing costs dramatically, reducing the amounts people can afford to borrow. Mancini said this climate could cause home prices to retreat and sellers to hold onto properties in the hope of a better future. Mortgage rates surpassed 7% at the end of October, reaching their highest level since 2002. "With the interest rates the way they are, they are forcing down the prices that low- to moderate-income people can afford to buy," Mancini said. The Best Community Bank isn't a Bank. It's a Credit Union. Voted Best Community Bank AND Best Credit Union! Federally Insured by NCUA Despite all the mergers, there are still community minded financial institutions out there – if you know where to look. American Eagle has been giving back to our communities for more than 85 years, combining personal service with all the big banking bells and whistles. Plus, better rates. Minus all the fees. So, you can keep switching banks. Or, switch to a credit union and see what people are talking about. americaneagle.org Transformation acceleration Hartford Federal Credit Union closed its down- town Hartford and Newington branches over the past two years, leaving it with four locations, accord- ing to CEO and President Ed Danek Jr. The credit union continues to maintain an ATM at the Newington location. "One of the interesting things about the shutdown and COVID is it really accelerated the transformation from in-person services to utilizing many of our elec- tronic products and services," Danek said. "We've gone from six to four (branches) and it's much more efficient. We are seeing more people who don't want to come into branches, who would prefer to do things remotely." Hartford Federal, a 17,000-member credit union with $159.9 million in assets, doesn't have a tech- nology research and development department. But it doesn't need one. Danek said the credit union has been able to contract out popular services like online bill payment, electronic check deposits and artificial intelligence to detect fraud. "We call ourselves a fast-follower," Danek said. Connex Credit Union, with $932.7 million in assets, is building a flagship location in North Haven, which will replace a smaller nearby branch, said CEO and President Frank Mancini. So, it will maintain eight branches to serve about 67,000 members. The new flagship branch will be "more representa- tive of our growth," offering a larger space and more amenities, Mancini said. Mancini said Connex has moved away from sched- Technology continued on page 26 Headwinds continued from page 24 Technology continued from page 24

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