Worcester Business Journal

wbjournal.com | June 26, 2023 | Worcester Business Journal 15 families who own homes are staying put. Marlborough-based Main Street Bank, a mutual bank which operates in Massachusetts and New Hampshire, is approaching the precarious moment by leaning in. Taking advantage of a possibly over-cautious approach elsewhere, the Main Street team is focusing on lending activity. "When other banks are clamping down and don't have the same lending appetites, there are opportunities for us to pick up new loans at higher rates," said Walter Dwyer, CEO of Main Street Bank. e reason for caution is a concern in anticipation of a potential recession, which could result in higher rates of delinquencies with job loss and other economic strains. "We are at a point right now where the next three to six months are going to be very telling," said Peter Alden, president and CEO of Bay State Savings Bank, a community bank in Worcester. On the loan side, Alden anticipates delinquencies could rise if the latter half of this year does bring recession. Alden is not the only bank executive paying mind to delinquency concerns. "I don't wish for this for sure, but I think there will be some challenges to borrowers on the commercial side," We Have A Reputation For Exceeding Expectations. Come See How We Earned It. Since our inception in 1981, Kelleher & Sadowsky has been the team with the local knowledge to help the region's top companies, property owners and developers achieve their commercial real estate objectives. Year by year we've built a reputation for high performance by truly putting our clients' interests first. Come see how we've earned it. Call 508-755-0707 or visit Kelleher-Sadowsky.com. Landlord/Seller Representation | Tenant/Buyer Representation | Commercial Mortgage Brokerage | Capital Markets | Business Brokerage 120 Front Street, Suite 210 Worcester, MA | 508-755-0707 | Kelleher-Sadowsky.com MIDYEAR ECONOMIC UPDATE F O C U S said Cornerstone's Webber. Should occurrences of loan delinquency start to rise, however, said Webber, it may be to a more normalized level. "We've had historically low delinquency rates. Almost nonexistent. Even if there is a huge increase, it might just be back to normal" said Webber. e U.S. delinquency rate on mortgages for one-to-four unit homes was 3.96% in the final quarter of 2022, according to the Mortgage Bankers Association. is was a tick up from 3.45% in the third quarter of 2022, the lowest the rate had been since the association began tracking data in 1979. Staying the course Even with delinquency as a concern on the fringe, overall anxiety across the industry is not more than a prickle. "is year has shown uncertainty that all banks are dealing with, but they remain stable overall," said ICBA's Burke. Weathering what comes next economically is less a matter of predicting recession, but more about a track record of strong financials and overall strength. "We didn't predict this, but we are being rewarded for being disciplined and adhering to strong asset liability management fundamentals," said bankHometown's Morton. e sense broadly is the best course of action is to stay the course while monitoring whichever way the headwinds may come from. "Consumers and businesses are still borrowing, and banks are still there, still lending," said MBA's Murphy. At the same time, the banking industry is not immune to the issues plaguing companies across the board. Workforce concerns continue to be a top priority at the MBA, as attracting new workers to the industry and retaining good talent is a challenge. e aging workforce is an issue, too. "It will create challenges and gaps for smaller institutions," said Webber. "It's hard to come by young talent." What comes next will largely depend on the actions of the Fed. "What we can control, we aren't nervous about," said Connors. "Our biggest concerns are things out of our control." e threat of a recession looms. Doyle is hopeful it will present as more a so landing than hard recession, he said. At Fidelity, a look to the past instills confidence in an ability to weather the challenges that come. "We're a 135-year-old community bank started in Central Mass.," Manzi said. "We have been through lots of different cycles: depressions, wars, pandemics." How confident are you in the American banking and financial system, compared to the start of 2023? Same as always 53% Less confident 43% More confident 4% W Peter Alden, CEO and president of Bay State Savings Bank

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