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36 2017 Economic Forecast • www.wbjournal.com • Worcester Business Journal B a n k i n g a n d F i n a n c e Increased interest With interest rates rising significantly for the first time in 15 years, the finance industry is headed for a change of pace T he increase in interest rates is exactly what many in the financial field have been wait- ing for, and something we have been talking about seemingly for years. Low rates have meant low mar- gins, which have meant struggling times for many lenders. With interest rates set to rise on the back of positive economic indicators, 2017 will be the year that lenders get some breathing room. What lenders do with that breathing room will help to define 2017. Competition for customers Rising rates mean breathing room for lenders, but it also means opportunity for those willing to play with lower margins. A rise in rates might not directly be felt by the con- sumer as some businesses would take this as an opportunity to build their share of the borrowers in a tight-rope walk along balancing more customers with a thinner margin. Credit unions vs. banks, continued The land grab will not just be between banks, as credit unions will continue to assert themselves within the market. This has been an ongoing trend, but credit unions in Central Massachusetts will continue to dip into the territory of banks, whether that is auto loans or sav- ings accounts. While some banks cry foul of this intrusion, it is the reality of doing business in Central Massachusetts. Digital expansion For some time it has not been enough to just have a website, you (at least) need an app and social media outreach. But the interconnected nature of our world is only get- ting deeper, and this will continue to hit the banking industry. This means not only new platforms but new servic- es through those platforms, such as Citizens Bank that recently announced an expansion to its wealth man- agement platform that taps into investments as well as loans, savings and checking. Scott McCarthy, the branch manager at the new Digital Federal Credit Union on Tobias Boland Way in Worcester, found suc- cess in the urban market by helping customers find their way out of bad financing deals with other institutions. Marlborough and North Middlesex savings banks to merge; create $1B bank Two area mutual banks have announced that they have agreed to a merger that would create a bank with nearly $1 billion in assets and $95 mil- lion in equity across 14 branches. In a joint release put out by the banks, officials said the merger would allow for increased lending capacity and a larger network of branches and ATMs while continuing the hometown focus that the banks had been built on. There will be no staffing reductions as a result of the merger. Walter Dwyer will serve as president while Richard Bennett, president and CEO of Marlborough Savings Bank, will serve as CEO of the combined bank and its hold- ing companies. The Boards of Directors of the combined bank and its holding companies will consist of eight directors from Marlborough Savings Bank and seven directors from North Middlesex Savings Bank. Banks, SBA increase small biz lending The U.S. Small Business Administration lent $657 million to Massachusetts businesses in 2015 through its three main loan programs. In terms of loan volume, Massachusetts surpassed pre- recession levels for the first time since the economic downturn last year. Several banks with locations in Worcester County have boosted their SBA lending, partly aided by a push from the agency to increase lending to small businesses and traditionally underserved populations by waiving certain fees on loans under $150,000. According to the SBA's Massachusetts office, total 2016 lending in dollars for Worcester County through September has surpassed 2015 figures by 33 percent. In all of 2015, SBA issued 223 loans totaling $42.2 million in Worcester County. So far in 2016, it issued 244 loans totaling $56.1 million. Wells Fargo removed as Mass. Treasury underwriter Massachusetts Treasurer Deb Goldberg has instructed her debt management deputies to immediately remove Wells P H O T O / C O U R T E S Y Top banking and finance stories of 2016 BY SAM BONACCI Worcester Business Journal Digital Editor Workers Credit Union rebranded this year in an effort to lure a larger market share. Citizens bank expanded its digital offerings in 2016. W Richard Bennett, president and CEO, Marlborough Savings Bank John Rainey, the director of the Massachusetts Small Business Development Center said banks are more educated about SBA loan offerings.