In 2015, Cindy Merkle made history in becoming the first female president and CEO of Union Savings Bank in the Danbury-based financial institution’s 155 years. And according to Merkle, she is overseeing the bank during a particularly historic stretch of time as well.
Coming off a year with a record number of bank closures, Merkle was proud to report that Union Savings Bank has held steady.
“The number of customers that are coming into the branches is diminishing every year,” she said. “But we still firmly believe you need a branch for a customer who wants financial assistance or a perspective on financial planning or consulting on mortgages. And a lot of small businesses still visit our branches, so you want to make sure that you have individuals with the expertise that can help them on the business sector as well.”
Merkle stated that for a large portion of the bank’s customers, branches mainly serve as billboards until customers decide they want the personal touch in their transactions. In the meantime, customers — particularly younger ones — are doing more of their banking online and through mobile apps, while the branch locations provide a staging ground for Union Savings community outreach programs and a hosting venue for the Love of Reading Libraries program that distributes free books for children.
Merkle forecasted economic headwinds for the coming year.
“We have had a very good year,” Merkle said of 2021, “as did, I think, most of our counterparts in Connecticut. It was a challenging second year of the pandemic, but most of us participated in the Paycheck Protection Program (PPP).
“After the second round of the PPP early on in 2021 there was a robust mortgage market with refinance activity because interest rates were so low,” Merkle added. “We had a lot of purchase mortgages, but now I think homebuyers are finding it difficult due to the tiny inventory.”
Merkle predicted the strong market performance from last year is not going to have an encore.
“2022 is probably not going to be a repeat of 2021,” she warned. “We anticipate this year a number of interest rate hikes from the Federal Reserve. We don’t know how many, but I think if you were to talk to any CEO six months ago, they would’ve said maybe one or two in 2022 — but we’re hearing from the Fed that it could be radically more than that. So, we’re interested to see what will happen mid-March at the Fed meeting.”
The Russian invasion of Ukraine and U.S. sanctions on Russia are unlikely to have an obvious economic impact on Fairfield County businesses, according to Merkle, who believed fuel prices may be worth watching — although she believed that the real threat for many local businesses is digital.
“There’s been heightened cyber alerts to make sure that everyone is doing what they need to be doing,” she said, “but we were getting those over a year, two years ago. We’ve consistently invested in our information security infrastructure, and I would say from an industry perspective we’re ahead of the curve for quite a few years.”
As a result, Merkle characterized the coming year as a time for Union Savings to consolidate its customer base and provide them with more services. That will include integration into mobile pay systems and expanded online banking options. Union Savings is also one of the first banks in the region to offer advances of up to two days on pay day deposits, a service that can be critical for those with unexpected expenses or with rent coming due before payday.
“What we’re really looking at is to enhance and increase the number of households that we bank in Connecticut from a relationship perspective,” Merkle said. “Because that’s really how we have to grow: organically.”