Many banks add business lenders as demand rises for borrowing
Perhaps indicating better days are ahead, many local banks have added commercial lenders in recent months to serve businesses' growing need for credit.
Industry experts say the trend shows that to some degree, banks are returning to their roots.
“Commercial loan generation is a key strategy, not only for us, but for all banks,” said David Antolik, senior executive vice president of commercial lending at S&T Bank, Indiana, Pa.
“To generate revenue, you've got to put (loans) on the books. And to grow loans, you need to add people who can generate loans,” said Antolik, whose bank added three senior commercial lenders at the end of August.
Fifth Third Bank, the large Cincinnati-based bank with 15 branches here, added four commercial lenders to serve the Western Pennsylvania and northeast Ohio market this year, including two senior executives in September, said Bill Dickson, senior vice president in charge of Fifth Third's middle market group for Western Pennsylvania.
NexTier Bank, a Butler-based community bank, hired four commercial lenders in August, including a new chief lending officer.
“Our commercial loan pipelines are fuller than we've seen in about two years,” NexTier President Margaret Irvine said. With $202 million in commercial loans on the books, the bank is projecting a 16 percent increase in 2013, she said.
The nation's business loan volumes have risen steadily for at least a year, according to data from the Federal Reserve. The level of commercial and industrial loans has increased nearly 13 percent to about $1.48 trillion at the end of October from about $1.32 trillion last November. Companies use such loans for equipment, expansion or working capital to operate their businesses.
Several bankers said the region's boom in natural-gas-related activity is helping drive business loan demand.
“Deals we've looked at are all over the board,” said Antolik, citing loan demand from manufacturers and wholesalers. “But a lot of it has centered on Marcellus shale-related business, including drilling over in Ohio.”
Bank of America, the nation's second-largest bank, had one business banker in Western Pennsylvania in 2010. But the Charlotte-based bank now has seven based in Pittsburgh, which it dubbed a “strategic market” in mid-2011, said James Neese, middle market banking executive for this region.
“Companies can only go so long putting off capital expenditures,” said Neese, adding that commercial loans were relatively flat in 2012. “We look at 2013 as having a little more robust activity, probably beginning toward the end of the first quarter.”
His colleague, Carlos Carter, senior vice president and senior client manager for this region, said Western Pennsylvania businesses have long been interested in cash-management and other services but nowadays also want credit, especially manufacturers.
“I have seen equipment financing activity perk up since the beginning of the year,” Carter said.
“We've seen particularly strong loan demand” from energy, health care and manufacturing companies, said Susan Shipley, Western Pennsylvania /Ohio Valley regional president of Huntington National Bank.
Area banks also have added seasoned commercial lenders because of the loan underwriting experience they bring to a bank, as well as the business clients, say industry experts.
“One way to grow a bank's loan book is to pick bankers that have client relationships,” said David Lazar, managing director of Stifel Nicolaus Weisel, an investment banking firm in Philadelphia.
For instance, S&T Bank hired three experienced commercial lenders away from FirstMerit Bank, Akron, in order to penetrate the Akron/Cleveland market, Antolik said.
Some banks also might hire seasoned business bankers to gain expertise, said Lazar. On Jan. 1, the Office of the Comptroller of the Currency will no longer allow banks to rely on credit-rating agencies to evaluate investments.
“It's going to mean a big increase in costs and a huge headache for community banks,” Lazar said.
Thomas Olson is a staff writer for Trib Total Media. He can be reached a 412-320-7854 or at firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Russian winger Plotnikov could join Penguins in August
- Pirates notebook: Taillon headed for surgery, Richard traded
- Ex-teammates say Kessel unfairly criticized
- Pirates can’t overcome long rain delay, Indians in interleague setback
- New Penguin Kessel’s shot is what makes him special
- Bethel trio of siblings celebrate 150 years of marriage
- Homewood West woman charged after stabbing woman during card game
- Tiny black weevils booming in W.Pa.
- Man fatally shot in East Liberty; police investigating 2nd shooting
- America’s path to freedom reflected in region’s numerous historic sites
- City police investigate death in Squirrel Hill