In The News
Commercial lenders have dusted off their boots in San Antonio
After years of a stagnant commercial lending activity, local bankers are expecting to be — as we like to say in Texas — “walkin’ in tall cotton” for 2014.
Broadway Bank experienced about a 10 percent increase in commercial lending in 2013 and expects 2014 to be on that level or above, says Steve York, executive vice president for San Antonio-based Broadway Bank’s commercial banking division, says.
“We’ve seen a lot of commercial real estate activity recently, with multi-family construction being the most active,” York says. “Every couple of weeks we entertain a new proposal.”
It has been much the same story for big banks such as JPMorgan Chase.
In San Antonio, Chase Bank has experienced double-digit growth this past year in its loan balances, says John Wallace, head of business banking for Chase Bank’s South Texas region.
“We have enjoyed considerable growth in San Antonio recently, and it is not all due to the improving economy,” Wallace says. “We have simplified our loan product offerings and processes and small businesses have been responding positively.”
Many bankers and borrowers were optimistic that 2013 was the year for the lending spigots to loosen. Instead, 2013 started strong, but turned out to be more of a ramp-up year.
Economic growth was steady, nonetheless — and managed to kick start a local resurgence in commercial lending.
“Indications early on in 2013 were that it would be a really strong rebound. During the first part of the year, there was a lot of activity,” York says. “A lot of plans for moving to the next level that had been set on the shelf were taken out and dusted off.”
But things slowed down by mid-year after labor data revealed that the recovery was not going to be as rapid as anticipated.
“I think we are going to see a strong 2014 as plans that have been in the works for three or four years begin to blossom,” York says. “A lot of the entrepreneurial spirit that was put on the sidelines during the recession is now back in motion and businesses are seeking solid relationships with bankers who can support their efforts.”
Areas that have seen the most growth lately include the medical arena and real estate, Chase Bank’s Wallace says.
There has also been growth in lending to owner-occupied businesses to make new equipment purchases.
“We are seeing more optimism in the San Antonio area, and we are gearing up for the new opportunities that we see happening,” Wallace says.
Chase has seen its market presence in San Antonio explode over the past decade.
In 2004, Chase had just three branches in San Antonio. By 2007, due in part to acquisitions and mergers, that number had jumped to 25.
Today, Chase has 51 branches in the San Antonio region.
“Every one of our branches is covered by a business banker or relationship manager,” Wallace says. “That makes it easy and convenient for businesses seeking support for new loans.”
Chase is a preferred lender with the Small Business Administration and the bank does a mix of conventional and SBA loans.
There has been no drop-off in SBA lending in the local market despite a backlog created by the October 2013 government shutdown.
“There were some delays at the time, but the bottom line is that those loans did eventually get funded,” Wallace says. “We have not seen a shift in the local market since then. The mix is still the same.”
York agrees that local SBA lending is back on track after the delays brought on by the government furloughs.
“The biggest factor that borrowers today need to be aware of is the need to have a commitment to capital in their business,” York says. “Once they reach a level of profitability, they have to maintain a commitment to capital in order to access the borrowing they need to achieve their goals.”