CT bank loans exceed $100 billion after merger

Connecticut-based banks crossed the $100 billion lending threshold for the first time in February, following Webster Financial’s merger with a New York lender – likely a short-lived step after People’s United Bank was absorbed weeks later by M&T Bank based in Buffalo, NY

By bolting Sterling Bancorp, Webster Financial accounted for the vast majority of a $20 billion spike in loans on the books of Connecticut banks according to a spokesperson for the Federal Deposit Insurance Corp., a 24% increase in three months to push the total to $103.7 billion. This shattered the previous record of $92 billion in lending at the doorstep of the COVID-19 pandemic in March 2020.

Connecticut bank deposits also hit a record high of $140.5 billion following the Webster-Sterling merger.

If the FDIC applies the same loan classification rules for People’s United, Connecticut’s bank lending will already have fallen below the $100 billion threshold with M&T’s April takeover of Bridgeport-based People’s United. The FDIC will update Connecticut’s bank lending as part of its next quarterly banking profile scheduled for late July.

In Connecticut and nationally, banks worked to normalize lending as Paycheck Protection Program loans were canceled by the federal government for commercial borrowers. M&T’s chief financial officer predicted loan growth between 3% and 5% in the near term, even as some borrowers accelerate repayments.

Prior to the merger, Webster established a new head office in Stamford after having long been based in Waterbury. The FDIC provides an annual update each fall on the specific branches where banks collect or allocate deposits, but the agency does not track the cities and states where companies make loans.

Speaking in late April, Webster CEO John Ciulla said loans and deposits grew “smartly” in his own words during the first quarter, adding that customers at this stage remained confident in the economic outlook. despite the impact of the Ukrainian conflict on energy markets and persistent inflation fueled by the federal government. recovery funds since the COVID-19 virus outbreak.

“A lot of momentum,” Ciulla said on a conference call with investment analysts. “We have significant expansion capacity.”

Ciulla said the merger with Sterling allows the combined company to bid for larger trade finance deals that can generate bigger profits for the bank. He added that Sterling had also blazed a new trail for health savings accounts which form a significant part of Webster’s portfolio, particularly in the context of the current hiring drive in the North East and the East. nationwide, which requires companies to set up new employees for HSA programs as part. of their health plans.

On Friday, the US Department of Labor released estimates that employers added 390,000 jobs in May. Separately last month, the Connecticut Department of Labor reported that Connecticut employers posted 10,000 new job openings online in each of three consecutive weeks in May, a first, but employers are still struggling to hire people at the pay and terms they are currently offering.

JPMorgan CEO Jamie Dimon issued a warning on Wednesday, saying he and his fellow executives remained “quite concerned” about the economic outlook.

“Huge growth in this country driven by fiscal and monetary stimulus – that’s not a normal recovery,” Dimon told a Bernstein-sponsored investment conference. “Right now the weather is pretty good, so good, everyone thinks the Fed can handle this – this hurricane is right there, down the road, coming. We just don’t know if it’s minor or Superstorm Sandy.

Includes earlier reports by Brian Lockhart, Paul Schott and Luther Turmelle.

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