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www.wbjournal.com Worcester Business Journal • 2015 Central Mass By The Numbers 21 Finance Leading banks in key communities Sources: Federal Deposit Insurance Corp., UMass Donahue Institute NOTE: Data as of June 30, 2015 Share of deposits Number of Deposits in town Town Bank in community branches (in thousands) I n many ways, 2014 has been a lot of the same for banking. We are going on eight years of essentially zero- percent interest rates as a result of a stagnant federal funds rate. That rate impacts everything from car loans to mortgages and means there is a relatively small margins on banks' loans. With continuing insta- bility internationally, where once Greece seemed to settle down some China's potential slow down contin- ued the perception of instability, these rates aren't likely to rise anytime soon. The answer for many banks has been commercial and industrial lending. The market has been grow- ing in Central Massachusetts this year, following a national trend. As of August, all commercial and industrial loans had climbed to $1.9 trillion, up from $1.72 trillion a year earlier. This was up from up from a recent low of just under $1.19 trillion in October 2010. Commercial lending has not been this brisk since October 2008, when $1.59 trillion in loans were underwritten just before the Great Recession. Banks have been jumping to get a handhold in the market, with Connecticut-based United Bank recruit- ing six Springfield and Worcester lenders in January. In a tough environment with low interest rates across the world, it is important to get into growing markets, United Bank CEO Bill Crawford said shortly after hir- ing the new Central Massachusetts team. There are plenty of lending opportunities in Central Massachusetts from $500,000 for small businesses all the way up to $30 million loans for the bigger players. All this market growth comes down to expanded confidence among the business owners, said Dan Barnard, the relationship manager in commercial lending for TD Bank in the MetroWest region. Prior to the end of 2014 and beginning of 2015, businesses had still been hesitant despite low rates but there have been more businesses seeking capital needed to grow, he said. Banks have also been able to tap into a slowly but surely growing housing market in the last year. While real estate sales have been held back by a lack of inventory, there are plenty of people looking to buy homes or make improvements to their current home. Home equity and home loans are up 40 percent this year, according to Cathy Pallin, Northeast regional sales executive for Bank of America. While in recent years much of the action had been refinancing, 70 percent of the banks loans have been a purchase mar- ket, she said. This growth in home loans is a thankful occurrence for banks that had been expecting a slowdown in refi- nancing as eventually the Feds will have to increase interest rates. While expectations that this would occur before the end of the year have been pushed back in light of a slowing global economy, banks have been preparing for this refinancing slow down for some time. Even without increased interest rates, the demand for refinancing is already waning, said Jeff Bajema, senior vice president of retail lending for UniBank for Savings in Whitinsville. He said there has been a strong mortgage market for the last year but stipulat- ed that most of that has been a purchase market. "It seems like anyone that had wanted to refinance has probably done it," Bajema said. n By Sam Bonacci Worcester Business Staff Writer Continued low interest rates drive banks to commercial and industrial loans Sources: City of Worcester, Federal Deposit Insurance Corp., Mass. Department of Revenue QUICK HITS Which banks have the highest market shares in the largest Central Massachusetts communities? Bank of America and Middlesex Savings Bank each lead the pack. Amount Worcester expects to collect in property tax levies in fiscal 2016: $270M Share of deposits in Fitchburg held by Rollstone Bank & Trust, the largest market share percentage in the region: 42.6% Taxes that Berlin expects to collect on open space, the highest in Central Mass.: $33,712 Amount of commonwealth's fiscal 2016 budget to be spent on economic development: $228M Worcester Commerce Bank & Trust 28.2% 6 $1,024,125 Framingham TD Bank 23.6% 4 $452,890 Leominster Fidelty Co-operative Bank 33.6% 3 $256,253 Fitchburg Rollstone Bank & Trust 42.6% 3 $240,317 Marlborough Bank of America 37.4% 3 $297,379 Shrewsbury Bank of America 27.1% 1 $171,425 Natick Middlesex Savings Bank 35.4% 2 $387,421 Franklin Rockland Trust Co. 28.0% 2 $202,746 Milford Milford Federal Savings & Loan Association 25.9% 2 $237,203 Acton Middlesex Savings Bank 33.3% 2 $339,238