Groton — Chelsea Groton Bank normally would be releasing its 2019 financial report about this time of the year, but instead of hosting an annual meeting President and CEO Michael Rauh has been working from home to oversee a weekslong battle to help local businesses and homeowners survive the financial outfall of the current pandemic.

"It's been a challenging but in many respects a rewarding six weeks," Rauh said in a May 1 phone interview.

Highlighting the bank's response to the coronavirus pandemic outfall has been a commitment by the Chelsea Bank Foundation to spend $300,000 locally helping food banks and other nonprofits deal with emergency human needs. Rauh estimated that is about $200,000 more than the bank foundation normally would have dispersed at this point during the year.

"We've been meeting every other week responding to the needs," he said. "And we're not by any stretch of the imagination done yet."

Rauh said community banks like Chelsea Groton, celebrating its 166th year in business, are uniquely qualified to help out the community during times of great stress. He noted the bank has survived many disasters over the years, including the previous pandemic in 1918, as well as wars, economic downturns, hurricanes and floods.

"In some respects we're at our best in times like this," Rauh said, citing the bank's strong financial position and $1.1 billion in total assets. "These are the times it's important to have capital and liquidity."

But Rauh pointed as well to human capital, praising the response of the bank's workforce, most of whom are working remotely. It's been a busy few weeks as local businesses and individuals called to inquire about piles of federal stimulus funding made available as part of the CARES Act, as well as a deluge of homeowners trying to take advantage of historically low mortgage rates to try to refinance their home loans.

The average rate of mortgage loans was about 3.25% at the end of last month.

"It's crazy low," Rauh said.

In April, Rauh reported, home refinancings were running about triple what the bank averaged monthly in 2019. And they were double the number seen at the highest point last year.

As if the deluge of refinance applications weren't enough, Chelsea Groton also has had to deal with the difficulty of doing title searches at town halls that are now closed, verifications of employment at businesses that have suspended operations, home appraisals in which appraisers and homeowners alike are reluctant to interact and real estate closings where face-to-face meetings were impossible.

"Despite the challenges, our team hasn't missed a beat," Rauh said.

In addition, many people have been calling to say they would be having trouble paying their mortgages, and Rauh said more than 400 customers have been granted a three-month deferral on their payments. For these customers, he said, the bank would simply add payments to the end of their mortgages.

Another role Chelsea Groton has played in this crisis is in connecting small businesses in the region to potentially forgivable federal loans that help companies fund their payrolls through the pandemic and will allow them to keep the money if they are able to maintain their workforces. As of the end of April, Rauh said the bank had helped 464 local businesses connect with about $73 million in federal stimulus money. That's an average of $160,000 in loans per business, for a net savings of about 5,000 jobs.

In a normal year, Rauh added, the bank does about 180 business loans, so in essentially one month the bank processed more than double the number of loans it did last year.

"I'm very proud, but the process has been difficult," he said.

The bank's call center workers, who normally field about 300 calls a day, have been averaging about 400 during the pandemic, Rauh said, and on a couple days those numbers have spiked to about 800.

To show appreciation, he said, the bank was able to give its employees a small bonus a couple weeks ago during a virtual Chelsea Pride Day. It also has been sponsoring Zoom exercise and training programs two to three times a day.

"I couldn't be more proud about how hard people are working," Rauh said.

Rauh added that Chelsea Groton, the biggest locally owned bank in the region, was well prepared for a health crisis partly because its management team had decided about three years ago to invest in technology that would allow the bank staff to work remotely in the event of an emergency. This has given bank managers and employees remote access to all of its critical systems, he said.

Still, all 14 bank branches remain open, mostly on a drive-thru basis. Customers also can come to the branches to access bank deposit boxes and other services by calling ahead for an appointment.

"Our team has been working tirelessly to keep doing what we do best," Rauh said.

And Chelsea Groton did very well in 2019. According to a year-end financial statement, its net operating income of $13.2 million last year was about 13.5% ahead of levels seen in the previous year. And its reported profit of $18.1 million, which included nearly $7 million in unrealized security gains that Rauh said were largely washed away in pandemic-related market turmoil, was a 60% increase from the previous year.

Highlights of the year included loan portfolio increases totaling $20 million, reduction in its provision for loan losses of more than $500,000, and $650,000 in charitable contributions.

"We had a terrific year last year," Rauh said. 

He said he believes the region is well positioned to come out of the pandemic in reasonably good shape. He pointed out that three pillars of the local economy — pharmaceutical maker Pfizer Inc., submarine builder Electric Boat and the Naval Submarine Base — have not been dramatically affected by the pandemic, as they were deemed essential businesses.

"This is a health crisis that has an economic tail to it," Rauh said, "Recovery is tied to how we deal with the virus and reopening, yes, but doing it in a way that doesn't cause us to take a giant step backward."

l.howard@theday.com