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60 Doing Business in Connecticut | 2015 Insurance & Finance INDUSTRY SPOTLIGHT › By Carol Latter S even years aer the financial crisis of 2008, Connecticut's financial institutions seem to be in good shape. Barry Abramowitz, executive vice president and chief information officer for Liberty Bank, says aer an extended stretch of economic weakness touched off by the Great Recession, the Nutmeg state's financial institutions are on solid ground. "I think things are much better in general, across the economic board. Like all companies, we [banks] live and die by the performance of the economy. e economy is doing better. Unemployment is down. I think from a pure banking perspective, the lending crisis appears to be over." Abramowitz said much of the financial crisis of 2008 and 2009 "was caused by mega- banks and poor lending practices. But com- munity banks, especially in Connecticut, had strong lending practices, especially residential lending, so we never participated in the ter- rible things — robo-lending, robo-signing — that some of the larger banks did," he said. "e impact of the whole crisis was a loss of business due to the slide of the economy. We were damaged like everybody else in the economy." Now, he said, things are substantially better. "e housing market has rebounded by nature of the employment marketplace rebounding. We're seeing an uptick in lend- ing for new home purchases rather than refinancing, and rates continue to be low." Over the past few years, he said, there's been a lot of positive activity in community banking, with the sector continuing to grow. "New branches have been opening up, there's been a little bit of merger activity, and on a go-forward basis, the community banking industry is sitting in a very good position to be successful." Concurrently, "we have seen small busi- ness lending picking up, which is another in- dicator of an improving economy. e rates remain very, very competitive for business lending, so there are a lot of financial institu- tions that are vying for loan relationships; it's very favorable for businesses." As a banker, "I always say we can only fare as well as our customers and our customers' prosperity. Healthy communities make healthy banks." He's glad to see his in- dustry — and his clients — recovering from the dark days of the recession. Bruce Adams, the Department of Banking's general counsel — and the acting commissioner for the first three months of this year — agrees that the banking picture is improving, both nationally and statewide. "e green shoots in our economy are push- ing through the earth, and our Connecticut banks are well prepared to look to the future safely," he said. Another bright spot for Connecticut's chartered banks is an effort at the federal level to "ease the regulatory burden on smaller banks because they don't have the same impact on the economy if they fail; they don't have the same compliance issues. We expect to see something happen in that area over the next year," Adams said. He added, "If you ask a Connecticut bank what the largest part of its budget growth is, it's hiring compliance employ- ees. But these banks would rather hire loan officers, make loans and do business. If com- munity banks get this easement, they can do more lending to consumers." ere's also been good news for the state's credit unions. "Last year, the legisla- ture passed a bill so that Connecticut char- tered credit unions would no longer have to pay state sales tax. Federal credit unions already didn't pay any sales tax, so this had been an unlevel playing field." He said aer that legislation passed, several credit unions with collective assets of nearly $2 billion switched over from federal to state charters, including American Eagle Financial and Nutmeg State Financial, "and we wouldn't be surprised if we saw more credit unions come over." Putnam Bank also made the switch. In fact, he said, "we've had a number of banks as well as credit unions leaving the fed- eral regulator and coming into state regulation. It's kind of a national trend. We don't compete with the federal regulator or recruit, but we have a very good relationship with our finan- cial institutions and our brand has been well received by the financial community." Adams estimated that some $3.5 billion in assets are coming under Connecticut regulation. "ey [banks and credit unions] pay us in the nature of 50 basis points per million, so the Department of Banking is going to realize more revenue from it." ❑ Banking on Success Connecticut's chartered banks and credit unions see bright days ahead ' Connecticut banks are well prepared to look to the future safely. ' — Bruce Adams, the Department of Banking's general counsel Bruce Adams says things look bright for local banks. PHOTO/CONNECTICUT DEPARTMENT OF BANKING