Hartford Business Journal

www.HartfordBusiness.com March 14, 2016 • Hartford Business Journal 5 REPORTER'S NOTEBOOK CT banks made more money in 2015 Connecticut bank profits continued to improve in 2015 even as historically low interest rates put pressure on lenders' margins. The 43 banks headquartered in Connecticut saw their collective 2015 profits increase 10.3 percent in 2015 to $704 million, com- pared to $638 mil- lion a year earlier, according to the Federal Deposit Insurance Corp. It was their highest profitability since prior to the Great Recession. Nationally, commercial banks and savings institutions insured by the FDIC reported aggregate net income of $40.8 bil- lion in the fourth quarter of 2015, up $4.4 billion, or 11.9 percent from a year earlier. The increase in earnings was mainly due to higher operating revenues and declining operating expenses, FDIC said. "Revenue and income were up from the previous year, overall asset quality contin- ued to improve, loan balances increased, and there were fewer banks on the problem list," said FDIC Chairman Martin J. Gruen- berg. "However, banks are operating in a challenging environment. Revenue growth continues to be held back by narrow inter- est margins. Many institutions are reaching for yield, given the competition for borrowers and low interest rates. And there are signs of growing credit risk, particularly among loans related to energy and agriculture." During 2015, two Connecticut banks failed to turn a profit, while nearly two- thirds saw their profitability increase. Total assets and deposits grew 7.3 per- cent and 9 percent, respectively, during the year to $99.6 billion and $74.7 billion. Lending to individuals and businesses also grew, as Connecticut banks reported $71.7 billion in loans and leases on their books at the end of 2015, up 9 percent from a year earlier. Meanwhile, loan quality is also improving as banks reported a lower per- centage of noncurrent loans and leases and nonperforming assets, at 0.89 percent and 0.69 percent respectively. – Greg Bordonaro State wants more leeway to dole out gov't aid Two state entities that provide low-interest loans, financial assistance and equity invest- ments to Connecticut companies are asking lawmakers to give them more autonomy to make bigger deals without legislative signoffs. The Department of Economic & Com- munity Development (DECD) and the quasi-public ven- ture capital lender Connecticut Inno- vations have again asked the legis- lature to allow them to award larger assistance packages without requiring review by the legislature's Finance, Revenue and Bonding Com- mittee. A similar 2014 bill died in that committee. It had opposition from the Foundation for Fair Contracting of Connecticut, a nonprofit that aims to increase transparency of state- funded construction projects. This year's proposed bill would allow DECD to provide up to $40 million in Urban and Industrial Sites Reinvestment (UISR) tax credits to a company without getting legislative approval. That would double the current $20 million exemption threshold. DECD is also asking lawmakers to increase the legislative approval exemption threshold on financial assistance provided to businesses through the state's Manufacturing Assistance Act (MMA) from $10 million to $20 million. The MAA, created in 1990, is funded by general obligation bonds and is DECD's flagship program for economic loans and grants, while the UISR, created in 2000, provides state tax credits to incentivize investment in urban centers and economi- cally distressed areas. DECD Commis- sioner Catherine Smith argued in testimony that the current finan- cial thresholds are out- dated and put her agen- cy at a disadvantage to counterparts in some other states, which have wider discretion. Smith said it would make Connecticut more competitive if the legislature eliminates the caps altogether. CI CEO Matthew McCooe said legisla- tive oversight can slow down deals, which can be particularly damaging when negoti- ating with biotech companies. – Matt Pilon PDS has been meeting the needs of the construction industry since 1965. Our dedicated team of design and construction professionals welcomes the challenge of serving its past and future customers on their most demanding projects. Shiloh Baptist Church | Hartford, Connecticut This project included 10,000 square feet of historical renovations. The exterior renovations consisted of new doors, handrails, roof and repointing. Interior renovations to the 1st and 2nd floor lobby and handicap lift. This job was completed on time and within budget. Project Size: 10,000 SF 107 Old Windsor Road, Bloomfield, CT 06002 (860) 242-8586 | Fax (860) 242-8587 www.pdsec.com DESIGN BUILDERS • GENERAL CONTRACTORS • CONSTRUCTION MANAGERS SPOTLIGHT ON: Religion PDS ENGINEERING & CONSTRUCTION, INC. THINK • PLAN • BUILD 273 Hebron Avenue, Glastonbury Business loans from a bank that lends more than just money. Company expanding? Need working capital or guidance as you grow? Stop by our Lending Center to discuss how our innovative products and services, including our new suite of small business loans, can support your changing needs. 860-934-1300 chelseagroton.com CT Bank Performance ($ in millions) 2015 2014 % Change No. of CT-based Banks 43 44 (2.3%) Net Income $704 $638 10.3% Total Assets $99,630 $92,858 7.3% Total Deposits $74,703 $68,514 9.0% Total Loans & Leases $71,695 $66,080 8.5% S O U R C E : F E D E R A L D E P O S I T I N S U R A N C E C O R P. Catherine Smith is the commissioner of the state Department of Economic & Community Development. P H O T O | H B J F I L E

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