By Jay McKenna, President and COO
After a very nice several years of relative calm, certainty, growth, and prosperity, our country has been sent into shock by the current virus outbreak. Financial markets have been roiled, events and travel are being canceled, and people are rightfully feeling very unsettled. First and foremost, I know each of you shares with me our overall concern and sympathy for those individuals and families affected by the virus.
In the bank’s strategic planning process, we try to plan and prepare for the worst, but of course something of this magnitude cannot be absolutely accurately predicted or planned for. Having been in leadership at North Shore for over 20 years now and having gone through some very interesting and challenging times, I would say this feels a lot like 9/11 to me, in terms of the shock and reaction. Beyond the personal tragedy involved, that event did cause a slowdown in the economy, which soon quickly recovered. I will also add that our country has a history of overcoming outbreaks — certainly not without some loss of life, but with little economic or social impact.
I certainly will not try to predict where this is all heading. As an optimist and believer in the human spirit and our ability in this country to innovate and develop solutions, I am hopeful that the coordinated efforts of governmental bodies and agencies and the private sector will lead to this being a relatively brief phenomenon. I am quite certain that our economy will take a hit in the short term, and I hope the impact is not severe. The very good news is that our local and national economies had been on excellent footing prior to this breaking out in late February. Unemployment was virtually zero, wages had risen, and personal and business balance sheets were strong. So we as a collective economy are as well-positioned as ever to absorb a shock like this.
What about the bank? Having survived, and even thrived, during the 2001 and 2009 downturns, we understand clearly that the key to our longevity is to always maintain a very conservative, fortresslike balance sheet and financial strength, even when times are good and there are no clouds on the horizon. That is a key value that guides our decision-making every day, without compromise, because we have long memories. With that being said, our bank has never been stronger or healthier than it is today. Our capital levels are at all-time highs, delinquencies and problem assets are at all-time lows, and liquidity is very high. By all measurements, we are in outstanding condition, so we can reassure our customers and the public that we are strong and are ready, willing, and able to lend. That should absolutely be the message from all North Shore employees.
As I am sure you are aware, recent market and Fed moves have put us into a very low-interest-rate environment. While this certainly has an adverse impact on savings rates, our branch and investment teams are knowledgeable in helping customers with their concerns. And at the same time, it is providing a fantastic opportunity for loan customers to borrow at ridiculously low rates. Mortgage refinance volumes at our bank and across the country have quickly achieved records. I salute our mortgage team — from the originators to the processors, underwriters, and servicers — who are doing incredible work under intense workload pressure, to deliver for our customers.
As to the virus, Molly Schissler will continue to monitor things and keep you updated. We do have business continuity and pandemic plans, and the BCP team will be refreshing procedures with all managers. The marketing team will be issuing a customer communication shortly.
In the meantime, please continue to use proper sanitation habits in public, at home, and in the workplace. If you are feeling under the weather, better to stay home than infect your customers or colleagues, and explore a temporary work-from-home option, where applicable, with Molly.
And in the interest of maintaining some sanity, I highly recommend disconnecting from social media and news feeds, as it can all get overwhelming. I am looking forward to a nice weekend of watching (spectator-less) basketball and funny movies. My kids highly recommend funny kitten videos as therapy. So we will remain calm, be smart in how we go about our day, and meet the challenges head on together.