George Hermann
President and CEO, Windsor Federal Savings
Age: 63
Industry experience: 41 years
As president and CEO of Windsor Federal Savings Bank, George Hermann advocates for mutual banks. This year he was appointed chair of the administrative committee for the American Bankers Association’s Mutual Institutions Council and was one of five bankers added to the Office of the Comptroller of the Currency’s 10-member advisory committee for mutual institutions.
Hermann got his start in the financial industry in 1980 working for what was then called General Electric Credit Corp., GE’s financial arm. He got his first community bank job in 1986 running a residential mortgage team and has been Windsor Federal Savings’ leader since 2012. The community bank started the pandemic with just over $550 million in assets and now has $700 million.
Q: What’s your outlook for Windsor Federal Savings?
A: The biggest challenge we have is the flattening of the yield curve right now. But we have a very strong commercial pipeline because of the consolidations that have been going on in our particular market.
In the middle of all this, too, we built out a 20,000-square-foot administrative office. We were able to pivot right from the start to put the best possible protections and make the changes to our design so that it’s as COVID-friendly as anything could be. We’ve got an office that we opened in a medical building as we’re building a new office in South Windsor. It’s all positive right now. One of the biggest challenges is just being able to hire people as we grow.
Q: Has hiring become an issue in the banking industry?
A: It’s more challenging than it has been in a very long time.
Q: How does the bank attract and retain employees, particularly the younger generations?
A: We’ve been doing fine on the retention side. Actually, the consolidations that are happening in the market has allowed us to be able to hire some very qualified people from other institutions. It’s the entry level positions that are more of a challenge right now. I think we’ve pretty much filled everything we had open. It’s just been a different environment.
Q: Is that because of the pandemic, or does the banking industry need to do more to attract people into those entry-level positions?
A: I can only speak for our institution. We’re pretty proactive. We have a high school banking program that we do in two minority-majority high schools. Unfortunately, last year because of the pandemic, we weren’t able to do anything with that. But we’ve had 65 students that have come through the program to learn the business, and we’ve hired 25 of them. We just hired somebody who was in the program, went to college, got their degree and came back.
Q: How can a bank like Windsor Federal take advantage of industry consolidation?
A: Slow and steady. When I say we’re taking advantage of consolidation, it’s not this wave of consolidation right now that’s really paying dividends for us; it’s the last wave of consolidation. It’s People’s United purchasing Farmington and United; its Simsbury Bank being acquired by Liberty. It’s Savings Institute being acquired by Berkshire; it’s First National Bank of Suffield being acquired by Peoples[Bank] of Holyoke. All of those things are really what has been fueling our growth.
Q: You are on a couple of national committees for mutual banks. Why remain a mutual bank?
A: We’re 85 years old this year. The institution was started in the middle of the Great Depression to promote housing in the Windsor community. A group of people came together and pooled their money so that there was a resource that would finance housing. We’ve grown from that point. We view ourselves as a community trust. We belong to our community, so I don’t see us becoming a public institution. We’re committed to mutuality right now. Our capital is good, but we look at slow controlled growth.
Through COVID and through the PPP, ourselves and other mutuals were the lifeline. We’re the ones that did the loans to the small business customers. We knew the people; we knew the customers. Our people were working at 2 a.m. to make sure these loans went through, because these are the people you see in the restaurants, you see them at community and school sporting events, you see them at church. For all the criticisms, the PPP worked. I know in our situation, our delinquency is the lowest it’s been since anybody here can remember. So, by getting the money to the people at the appropriate time, people didn’t panic, and they’ve continued running their businesses.
Q: What work do you do on the national committees?
A: I had the privilege of serving on the board and as treasurer of the American Bankers Association, and right now I am chairman of their mutual institutions committee. Often people don’t think how things like different legislative changes are going to affect mutuals, and that’s where we focus. Windsor Federal is also the only federally chartered mutual in the state of Connecticut, and I have the privilege of serving on the OCC’s MSAAC, which is the mutual savings association advisory committee. This was set up a number of years ago – when the Office of Thrift Supervision and the OCC merged – to make sure that mutual issues stay right in the forefront.
Q: What are some of the main topics concerning mutual banks right now?
A: Credit unions are purchasing banks, and there’s a particular transaction where they’re trying to liquidate a mutual institution and then have it taken over by a credit union. That’s troubling because, in our business, we don’t want people to look at us as a liquidation value. We look at what the value is to our communities. That’s an important issue right now.
Another issue of concern is the current capital requirements, because a number of institutions have grown because of all the PPP lending that they did and all the PPP deposits that came in. Capital ratios are lower than they were. The regulators have temporarily adjusted what it means to be well capitalized if you use the community bank leverage ratio. But when they initially made those changes, they were anticipating one round of the PPP loans, not three rounds, and the loan term was supposed to go for 18 months, not for five years. So, it’s an issue on our side to make sure that they’re conscious of what’s going on – and right now it’s fine – and that they look at the capital requirements and what makes up the capital.
This is a good time to be a community mutual back. I really think that as difficult as the pandemic was, our industry as mutuals really stepped up. There’s an awful lot of goodwill from the communities and the business owners for institutions like ours right now.
Hermann’s Five Favorite Golf Courses
- Old Head in Ireland
- TPC Sawgrass in Florida
- The Coeur d’Alene Resort Golf Course in Idaho
- Whistling Straights in Wisconsin
- Ballybunion in Ireland
