Chelsea Groton Bank ended 2013 on a strong note, recording $4.8 million in net income over the $4.1 million it posted in 2012.
The mutual bank closed out the year with $592 million in total loans, compared with $551 million the previous year. That growth was driven mainly by increases in residential lending, President and CEO B. Michael Rauh said.
Rauh said the shift from a refinance business to a purchase market boosted the bank’s activity in that area, and he added that Chelsea Groton had added a number of new products for first-time homebuyers. Chelsea Groton originated $105 million in new residential mortgages last year and another $26 million in consumer loans, which includes home equity products.
"We tend to do pretty well in a purchase market environment," he said.
Rauh also said the bank made a conscious effort to increase commercial loan originations and had hired several new commercial lenders last year.
In 2013, Chelsea Groton did $78 million in new commercial loan business, most of that concentrated in small- to mid-sized businesses, Rauh said.
"We did everything from a new Starbucks to a continuing care senior living community to a jet fuel wholesaler," he said.
Rauh told The Commercial Record the bank’s financial services division had done particularly well last year, too, due in large part to New London County’s substantial second home and retirement population.
Finally, he said, Chelsea Groton Bank helped boost its bottom line by keeping expenses down in 2013. Rauh said the bank renegotiated every electronic banking agreement, as well as its telephone contract, and estimated the bank saved $500,000 every year going forward as a result of those negotiations.
And he credited improving economic conditions for helping push down nonperforming loans and assets.
"Houses that had been on the market for a long time finally sold. Some of the old real estate development loans we made that the developer hadn’t been able to sell house lots, those house lots are finally starting to sell. New construction is starting to come about. Businesses that had marginal or negative income finally turned the corner," he said. "I would say it’s largely reflective of an improving economy."
Email: lalix@thewarrengroup.com
