Hartford Business Journal

10 HARTFORDBUSINESS.COM | FEBRUARy 20, 2023 By Michael Puffer mpuffer@hartfordbusiness.com R etiring Northwest Community Bank CEO Stephen P. Reilly can look forward to spending more time with his wife, traveling, boating and working on his golf game knowing he's leaving the bank on solid footing and in good hands. Having led the 2021 merger with Collinsville Bank and Litchfield Bancorp, Reilly has helped significantly increase Winsted-based Northwest Community's size, growing the mutual lender from $411.8 million in assets at the close of 2020 to nearly $1.1 billion today. The larger balance sheet has afforded the bank greater security, at a time when many community banks are being gobbled up by larger competitors. The deal also gave Northwest greater ability to invest in its digital offerings — key to any bank's future as consumers increasingly prefer to manage their finances online. Northwest Community's board of directors recently announced Maura Malo, currently executive vice president and chief operating officer, will step into Reilly's shoes effective Sept. 1. She'll be the first woman to lead the bank since its founding the year prior to the Civil War's outbreak. "If the bank were in a different position financially and succession were more of an issue, clearly I would not have been as comfortable as I am retiring," said the 60-year-old Reilly. "That is important. I've been here 26 years and 14 as CEO. I want to see continued success. I have an incredible comfort level with that." Achieving scale Northwest Community Bank traces its roots to the founding of Winsted Savings Bank by community leaders in 1860. Fifteen years later, business leaders opened Mechanics Savings Bank of Winsted, later renamed Northwest Bank for Savings. The two merged as Northwest Community Bank in 1996. Northwest Community Bank and Litchfield Bancorp came together as wholly owned subsidiaries of Connecticut Mutual Holding Co. in 2001, producing savings on shared back-office support. Each bank maintained its own management, board of directors, charter and identity. Collinsville joined in 2010. The three banks took another big step two years ago, merging under the banner and charter of Northwest Community Bank. While the banks merged, their 14 combined branches have retained their individual names: Northwest Community Bank, Collinsville Bank and Litchfield Bancorp. There are no immediate plans to change that, Reilly said. "Those names are very familiar to the communities in which we provide banking services, where we give donations," he said. "And they are highly recognizable names, so we felt it is important to maintain them." Reilly said the pending retirements of the former CEOs of Collinsville Bank and Litchfield Bancorp were a key driver of the 2021 merger. There were significant cost savings, too, including consolidation of redundant technology services, which added more than $1 million to the bank's bottom line, Reilly said, adding there were no layoffs related to the deal. Northwest Community has grown its assets by 10% since the deal was completed, which Reilly said has been "very solid growth." "Generally, you might see 5% or 6% but our growth in that period was really solid," Reilly said. "That was us growing our commercial, our residential loan portfolio. The real estate market was just so hot in that period of time." Reilly and Malo said they are keeping close tabs on potential economic headwinds, but the bank hasn't adjusted its already conservative lending standards. Reilly said he expects a slowdown in business, despite robust commercial lending activity heading into 2023. "I think we have a certain customer base that is pausing and holding back a bit, but there is a lot going on in the state of Connecticut," Reilly said. "While we are predominantly in Litchfield County and the Farmington Valley area, we spread our wings pretty broadly in Connecticut." Growth plans The aim is to spread those wings further across the state. Those efforts are already underway. In 2020, Northwest Community opened a branch in Simsbury, while Collinsville Bank debuted a new Farmington location. Both branches are on track to meet revenue projections despite some road bumps caused by the pandemic. Northwest saw opportunity in the Farmington Valley following a spate of small-bank mergers, including People's United Bank's 2018 acquisition of Farmington Bank, and Liberty Bank's 2019 purchase of Simsbury Bank & Trust. Reilly said he sees more potential growth in the Farmington region as well as down Route 8 in the Waterbury area. In a competitive banking landscape, Malo said Northwest Community's value proposition is to be local, nimble and serve as an alternative to much larger regional banks that have acquired nearby competitors. "There is a lot of analysis that goes into determining the placement of a branch, given the commercial activity we are seeing in the market and what's going on with mergers and acquisitions in the market," Malo said. "We saw value in those communities. We saw opportunity, particularly with mergers and acquisitions." Northwest Community Board Chair William J. Shea II said the bank isn't in the market for another acquisition, but wouldn't shy away from opportunities should they arise. Northwest also isn't interested in entertaining buyout offers from another lender "because we are well capitalized," Shea said. As a mutual bank, any sale would have to be endorsed by depositors, he noted. MAURA MALO Executive Vice President & Chief Operating Officer; incoming CEO Northwest Community Bank Education: Bachelor's degree, Western New England Univer- sity; MBA, Rensselaer Poly- technic Institute; graduate of National School of Banking Age: 51 AT A GLANCE Company: Northwest Community Bank Industry: Financial services Top Executive: Stephen P. Reilly, current CEO; Maura Malo, incoming CEO HQ: 86 Main St., Winsted Assets: $1.1 billion Employees: 156 Branches: 14 Website: https://nwcommunitybank.com/ Contact: 860-379-7561 Changing of the Guard Northwest Community Bank charts growth path following merger, upcoming leadership change Northwest Community Bank CEO Stephen P. Reilly (left) will be retiring in September and handing over the reins to his replacement, Maura Malo, who will be the first woman to lead the Winsted-based lender. HBJ PHOTO | STEVE LASCHEVER

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