Issue link: https://nebusinessmedia.uberflip.com/i/1494972
HARTFORDBUSINESS.COM | MARCH 20, 2023 17 TO THE LEADERSHIP AND TEAMS AT CONNECTICUT'S HOSPITALS AND HEALTH SYSTEMS. YOU CONTINUE TO PROVIDE EXCEPTIONAL CARE TO PATIENTS ACROSS CONNECTICUT, DELIVERING NEW AND INNOVATIVE TREATMENTS WHILE STAYING READY TO RESPOND TO EMERGENCIES, LARGE AND SMALL. PROFOUND TH ANKS SoundView's merger with Western must gain approval from the Connecticut Department of Banking and National Credit Union Administration, as well as Western Connecticut FCU members. The combined organization would operate under the SoundView name, with more than $78 million in assets. Palladino said there is no plan to lay off staff or close branches. The merger is anticipated to be approved by July, with operational issues sorted out over the following six to nine months. The blending of the two organizations is expected to go smoothly due to similar member-oriented cultures, she said. "We have similar philosophies and memberships, so it's kind of like apples to apples, with a few oranges thrown in," Palladino joked. "I feel like what we do helps people." Credit unions come in two basic flavors, said Hartford Federal Credit Union President and CEO Edward Danek. Some, with just a few employees, offer a limited range of services like car loans and savings accounts. Then there are full-service credit unions, like Hartford Federal, that offer the typical array of financial services — including mortgages, checking and credit cards and online and mobile banking — used by most consumers. Only a handful of Connecticut credit unions offer commercial loans, typically the bread and butter of community banks that have larger balance sheets. Something as simple as losing a manager can force smaller credit unions to seek out a merger, Danek said. The bigger issue is the struggle to keep pace with rising costs. "In the digital transformation age, you need to get to a critical mass to drive per-transaction costs down," Danek said. "If you are under $100 million in assets, it's starting to get real tough to be a full-service institution." Hartford Federal, which has about $155 million in assets, has absorbed five credit unions over the past decade, including Newington VA Federal Credit Union, West Hart- ford-based Wiremold Credit Union, Stafford-based Workers Federal Credit Union, Hartford's Media 1 Credit Union and Valley Catholic Federal Credit Union in Simsbury. The merger with Media 1 — which served employees of the Hartford Courant and local radio stations — was prompted by that credit union manager's pending retirement, Danek said. The Newington VA merger came with good employees who are still with Hartford Federal today, he noted. Mergers are an efficient way to expand in a state with little to no population or employment growth, Danek said. For example, Hartford Federal opened a Simsbury branch in 2005 to capture more business in the Farm- ington Valley. It cost about $35,000 monthly to operate and took nearly five years to reach profitability, Danek said. By contrast, Hartford Feder- al's 2018 merger with Workers Federal came with an estab- lished branch in Stafford that was immediately profitable. "It is a lot easier to acquire some- body in a new market," Danek said. "You assume their book of business and the overhead, and you are off and running." Fewer credit unions, more assets Here's a breakdown of Connecticut's credit union industry over the past 15 years YEAR NO. OF CT CREDIT UNIONS TOTAL ASSETS MEMBERS BRANCHES 2007 148 $7.1 billion 884,449 289 2012 126 $9.1 billion 867,540 272 2017 103 $10 billion 875,122 265 2022 82 $14.74 billion 944,388 241 Source: National Credit Union Administration