Hartford Business Journal

HARTFORDBUSINESS.COM | AUGUST 21, 2023 23 FOCUS: BANKING & FINANCE Building Ideas That Work... Building Ideas That Work... Contact us at 860.482.7613 or visit us at BorghesiBuilding.com 2155 East Main Street Torrington, Connecticut 06790 © 2011 BlueScope Buildings North America, Inc. All rights reserved. Butler Manufacturing ™ is a division of BlueScope Buildings North America, Inc. Borghesi Building & Engineering Co., Inc. will guide you in defining your project goals, help analyze your prospective property and provide a realistic budget. For more than 80 years, Borghesi Building & Engineering Co., Inc. has provided quality and reliability with design and energy efficient construction. With an attractive design, it presents to your customers a comfortable relaxing environment to help promote sales. You will appreciate the quality your facility presents. appropriate to build reserves. Q. In terms of commercial real estate, where do you see the most growth opportunities? A. I think affordable (housing) will continue to be a huge opportunity, and multifamily broadly. Apartment buildings are doing extremely well. Obviously, industrial continues to do well, although activity there is slowing. Q. What is your brick-and-mortar branch strategy? A. Branches will be an important part of banking for the foreseeable future. People have been projecting the demise of the branch for a long time. The fact is, people like to do business with other people and, at those crit- ical moments that matter – whether people are trying to buy a house, send their kid to college, or retire – they want to talk to a person. So, branches will still be around for a long time. Q. KeyBank is a $195 billion lender. What are your goals for growth over time? Will that be organic growth or through acquisitions? A. My experience as a banker for many years is that the best compa- nies grow both organically and inorganically. First Niagara, that deal was now seven years ago, but that's a busi- ness we purchased to keep the good people and to keep the clients. We were able to take out 42% of the cost. That's a pretty good business model. The other place I'm really proud of, what Key has done a great job of doing, is buying smaller, entrepreneurial businesses. (Examples include Laurel Road, a digital lending business that KeyBank acquired in 2019; and Gradfin, a public service loan forgiveness coun- seling provider purchased last year). I think we have figured out, as a large company, how to buy entre- preneurial companies and really leverage them, which, in business, is not always the case. Too many times, large companies buy small entrepreneurial companies and they proceed to destroy the very thing that they liked about what they just bought. I think we try to be careful. We call it 'not crushing the butterfly.' Q. After the Silicon Valley Bank failure, there was a flight to larger banks. Do you see a lot more consolidation going forward? A. There's been virtually no consol- idation year-to-date, and that's because there are three things going on. One, people have unrealized losses in their bond portfolios, and when you buy a bank with unrealized losses, they become realized. Two, everyone is still trying to gauge where we are in the economic cycle, which is a challenge. And third is the lack of clarity as to what deals can be approved (by federal regulators). I think over time, each of those issues will subside, and when they do, I think there will be a wave of consolidation, which has gone on in our industry for a long time. At one point, there were 20,000 banks (nationally). Today, there's 4,200. Q. Do you think we are heading into a recession? A. I think we'll have a recession, but I think it will be fine. I'm more hopeful today we can have a mild recession without really damaging the job market. I think a soft landing is possible. Data is as of June 30, for each year | Source: Federal Deposit Insurance Corp. CT DEPOSITS NO. OF BRANCHES *Data is as of June 30, for each year | Source: Federal Deposit Insurance Corp. $5B 4B $3B $2B $1B 0 70 60 50 40 30 20 10 0 2017 2018 2019 2020 2021 2022 2022 2021 2020 2019 2018 2017 KEYBANK'S CT DEPOSIT GROWTH KEYBANK'S CT BRANCH COUNT

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