3 | SIDS AWARENESS January 9, 2017 | VOL. 53, No. 2
7 | CAREER LEAP
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Bankers see minimal risk in interest rate hikes BY KEVIN ZIMMERMAN kzimmerman@westfairinc.com
T
he Federal Reserve’s decision to raise its benchmark interest rate on Dec. 14 — the second such increase in a year and only the second, too, since December 2008 — drew mixed reactions nationwide from banking and economic experts. Many saw it as an encouraging sign of an ongoing, if slow, national economic recovery, while others viewed it as possibly lessening both banks’ profitability and consumers’ interest in and ability to afford loans. But Connecticut area banks, which collectively were on pace to post strong results for 2016, maintain that the Dec. 14 rate increase — from a range of 0.25 to 0.5 percent to a range of 0.5 to 0.75 percent — is small enough to not have an adverse effect. Further, they said that expected additional increases this year — likely two or three — should not noticeably dampen business. “In my estimation, two increases feel
more likely than three,” said Newtown Savings Bank CFO William J. McCarthy. “And those would be modest, not skyrocketing.” “There could be a rate increase or two this year,” said Timothy Bergstrom, senior vice president and head of business banking for Connecticut at Webster Bank in Hartford. “But the end result would still be very affordable to businesses and consumers alike.” “People are increasingly feeling that we’re normalizing again,” Bergstrom said. “A moderate increase or two shouldn’t change that.” According to the Federal Deposit Insurance Corp., the 42 Connecticut banks it insures accrued a collective $562 million in profits through the first nine months of 2016, a nearly 8.1 percent increase from the $520 million posted by 43 banks for the same period in 2015. (Naugatuck Valley Savings & Loan was acquired by Liberty Bank in January 2016.) Through three quarters, total assets grew year-over-year by nearly 7.1 percent, from $97.1 million for the first three quarters
From left; John Trentacosta, Richard Muskus and William McCarthy
of 2015 to $104 million for the first nine months of 2016. Loans and leases at FDICinsured Connecticut banks during the same period rose some 7.6 percent, from $69.8 billion to $75.1 billion. With those numbers, banks are entering 2017 feeling confident, dismissing fears that higher rates could negatively affect their profitability. “In most cases, as rates go up, profitabili-
ty goes up,” said Newtown Savings President and CEO John Trentacosta. “When you’re in the banking industry, you’re hampered by having low rates for as long as we have. You need to figure out a way to make money in that environment. “Of course,” he added, “if rates go up a lot, that could slow things down.” Homeowners may feel the greatest » Bankers, page 6
Bridgeport makes progress in war on blight BY PHIL HALL phall@westfairinc.com
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ast July, Bridgeport Mayor Joseph P. Ganim ratcheted up his city’s efforts to improve the quality of life with a new get-tough cleanup and redevelopment initiative “We are declaring war on blight and illegal dumping,” Ganim said at the time. “That means zero tolerance for anyone who
disrespects the residents of this city and our neighborhoods by just leaving their trash in an abandoned lot or letting their house go to waste. We will find those responsible and bring criminal charges against them. Just dumping trash and leaving a blighted property in Bridgeport are going to cost you. We are also asking for the public’s help in finding the bad actors here so we can clean up our city, and we are now offering a reward » Bridgeport, page 6
Bridgeport officials and residents watch the demolition last month of a fire-damaged mixed-use property in the city’s East End, the first in a series of planned demolitions of blighted properties. Photo courtesy of city of Bridgeport.