Hartford Business Journal

HARTFORDBUSINESS.COM | JULY 10, 2023 13 ON THE RECORD | Q&A earlier this year. Strong communica- tion with depositors, Kettles said, put Windsor Federal customers at ease, while the bank remains well-capital- ized with "asset quality numbers that are probably the best in the history of the bank." The 53-year-old Suffield resident is married with three kids — including two 14-year-old twin boys and a 13-year-old daughter — who keep him active outside the corner office. They are involved in baseball, softball and soccer, and Kettles has helped coach their teams. He enjoys outdoor activities including golf, hiking and fishing in warmer months, and skiing during the winter. As new CEO, Kettles said he isn't planning any major strategic shifts, other than continuing to grow the bank's commercial loan portfolio, while still offering "competitive resi- dential loan products." "We're an independent, communi- ty-focused organization and plan to remain that way," he said. Here's what else Kettles had to say. The Q&A was edited for length and clarity. Q. What do you see as the biggest opportunity for Windsor Federal? A. We're in north central Connecticut. We have competition, but we are the hometown bank. We are the only bank headquartered in Hartford County, and we take advantage of that. All of our people live, work and play here. We know a lot of the different people and businesses in the community. Q. What are the biggest challenges? A. I think there are a lot of challenges and headwinds that all banks are facing. The significant increase in interest rates is driving up funding costs and deposit pricing, but we are fortunate to have a very strong customer base. We try to give them the best return and, in turn, they're loyal to us, so I think we're well-positioned for the current conditions. (Windsor Federal reported a $1.2 million profit during the first quarter of 2023, up 41% from a year earlier, according to Federal Deposit Insur- ance Corp. data.) And then there are the continued conversations around what poten- tially could happen in the economy, like a recession. But again, we are well-positioned there — our asset quality numbers are strong and we've always had prudent, conservative underwriting practices. Q. Where do you see the economy and interest rates going? A. That's a good question. We don't try to guess rates, we try to make sure that we are positioned so if rates go up or down, we can do well and not face catastrophic results. We follow what the Fed says every day, and they put a recent pause on rates, but I think most people in the industry feel that there might be another rate hike or two this year. Q. Bankers have told me that to remain independent, it's important for any lender to reach $1 billion in assets, given the rising costs of technology, regulation and other things. Is that a goal for Windsor Federal, to hit that $1 billion-in-asset mark? A. Yeah, we are looking at a billion dollars at some point, but we're not going to grow just to grow. I think the point that's very important to make is that we are a mutual, we don't need to grow other than to keep up with those costs. We don't have to satisfy share- holders on a quarterly basis, we can take more of a long-term strategy and approach. Q. Would most of that growth be organic, or would mergers and acquisitions be part of the equation? A. It will be 100% organic growth, all through relationships. We are not built on transactional lending, we really look to build relationships. I think we are in a good position to grow based on the fact that we are a mutual, and many of our competi- tors — like Farmington Bank, United Bank, Simsbury Bank, People's United — are no longer around, they are now part of much larger banks. Q. Does the bank want to maintain that 70/30 commercial-to-residen- tial/consumer loan ratio? A. We're going to continue to examine that, and a lot of that depends on the economy and other factors. If you look at residential lending, for instance, volume has shrunk dramat- ically. There's just not a significant inventory of homes on the market to lend to people, and there's not the refinance volume because of the higher interest rates. We plan to continue to be in the residential consumer lending space, but the real opportunity for us is going to be on the commercial side. Q. What's your sweet spot in terms of commercial loan size, and who's your typical business customer? A. We're diversified among many different industries — a lot of aero- space manufacturing, self storage, warehouse, hospitality. In terms of loan size, our sweet spot is the $1 million to $7 million relationships. Our legal lending limit is $12 million, but we have several relationships above $20 million that we work with other banking partners to service. Q. What's Windsor Federal's brick- and-mortar branch strategy? A. We have eight full-service branches and a couple of branches in high schools. We're not going to look to grow aggressively, but where there's opportunity, we'll take advantage of it. It really comes down to people and making sure we can hire the right bankers. It's a tight employment market, and trying to find the right people and right teams to grow prudently can be a challenge. Q. What about digital banking and technology investment? What's Windsor Federal doing there? A. Technology is probably one of the most significantly increasing pieces of our budget. We have an Interactive Teller Machine (ITM) strategy and imple- mentation plan. We'll be using more ITMs in our existing branches, and possibly as opportunities to grow outside of that. ITMs give us the ability to expand our full-service banking hours, but in a different format. We also continually look to partner with the right fintechs and establish and expand those types of relationships. WINDSOR FEDERAL SNAPSHOT Assets $755.2M Deposits $649.2M Net loans and leases $535.6M 1Q net Income $1.2M Branches 8 Employees 102 Source: Federal Deposit Insurance Corp. Bring Clarity to Your Business Communication Tell Your Story More Effectively WORDS are the catalyst for ACTION

• Cover