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    Tuesday, July 23, 2024

    A wild but profitable year for Chelsea Groton

    Groton — In a year defined by fallout from a worldwide pandemic, Chelsea Groton Bank reported this week profits that were largely unsullied by economic turmoil.

    Sure, profits were down slightly from a record-breaking year in 2019, but bank President Michael Rauh said he was pleased with the results. He was especially happy that the bank withstood the pandemic-fueled economic downturn as its foundation handed out $1 million to nonprofits in need — double the amount it had been giving out most recently.

    "I couldn't be more proud of how everybody came together ... doing what was right for our customers, our community and each other," Rauh said Monday in a Zoom interview in anticipation of Chelsea Groton's annual meeting Tuesday, when 2020 financials were released.

    Highlights from the year-end report showed that operating income — profits minus one-time financial gains from investments — decreased slightly on the year, from $13.2 million to $13.1 million. But total assets rose by about $300 million to $1.4 billion, a dramatic increase compared with previous years. What's more, the bank increased its capital position by $16 million, putting it on a solid financial footing.

    Rauh said the early part of the pandemic was concerning, and the bank initially projected much more dire results than actually occurred. He added that the bank had been investing in technology to the tune of about $500,000 in case of a significant business interruption, and the investment paid off. He said online accounts, for instance, rose by 220% during the year.

    The bank also processed a remarkable 570-plus Paycheck Protection Program loans for local businesses, for both existing and new customers, totaling nearly $74 million. Chelsea Groton by far was the biggest local producer of such loans, he added, thanks largely to a voluntary program that saw dozens of bank personnel reassigned to push through PPP loans. Rauh said estimates showed the loan program helped secure more than 8,400 jobs locally.

    Other strengths last year included first mortgages, which had a record-breaking year at Chelsea Groton as it served 155 first-time homebuyers and approved a total of 908 first mortgage loans. That doubled the previous year's number.

    "It was a spectacular year for us," Rauh said. "We just didn't get there the way we thought we would."

    On the challenging side, Rauh said net interest margins have been shrinking, cutting into loan profits. But he said the bank could overcome that challenge through its recent explosive growth.

    The pandemic also resulted in a significant increase in nonperforming loans, so the bank has bolstered its provisions for bad debts. But he expects lending problems to dissipate as the economy rebounds.

    In addition to reviewing year-end financials at the annual meeting, Chelsea Groton named four new corporators: Wendy Bury of Stonington, executive director of the Southeastern Connecticut Cultural Coalition; Shiela Hayes of Norwich, president of the NAACP Norwich Branch and a corporator at Norwich Free Academy; Suki Lagrito of Norwich, a local entrepreneur and liaison for Global City Norwich; and Larry Rivarde of Groton, chief operating officer at Mystic Aquarium.


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