A strong economy and a renewed focus on customer service continued to boost commercial lending in 2018.
Real estate data analytics firm The Warren Group, publisher of The Registry Review, has compiled the top 10 mortgage lenders among credit unions, banks and mortgage companies, ranked by number of loans and loan volume in several origination categories. All loans were originated in 2018.
While the big banks continued to take top honors in the commercial category, community banks in New Hampshire had a good showing last year.
The $1.64 billion asset Bank of New Hampshire originated 42 commercial real estate loans for a total annual volume of nearly $24.5 million. The bank attributed its success to redoing its entire approach to commercial lending and focusing on referrals.
“Existing customers at times were choosing not to deal with us,” Paul Falvey, CEO and president of Bank of New Hampshire, told The Registry Review. “We got them back doing business with us, showed them a different experience and then they would tell two friends.”
Falvey said he saw strong loan demand across the state last year, but the bank more than doubled its lending in the lakes region, where it is located.
He also said Bank of New Hampshire saw good activity across the hospitality sector, an industry that has been reinvesting.
Commercial Real Estate A Good Bet
Real estate investment groups also proved good borrowers, although given where the cycle is in commercial real estate, Falvey said the bank is only doing business with groups that have built portfolios over a long period of time with good equities. This customer base is seasoned and does not have leveraged portfolios, he said.
Bedford-based Primary Bank is another local bank that made The Registry Review’s top lenders list for commercial real estate.
The bank has been in operation for only three years and does not do any residential business. It was launched to respond to what CEO Bill Stone deemed a lack of small business lending in the market after Nashua Bank, Hampshire First and Centrix Bank & Trust were all acquired, starting in 2012.
“We saw an opportunity to fill a void for the small– to medium–sized customer who wanted to deal with local community bank,” Stone said. “We have seen really strong demand across the board on all loan types.”
The bank has built up a $176 million loan portfolio in three years and recently enjoyed its first year of profitability. Stone attributes the success to the bank’s fast decision making – Primary Bank’s slogan is “We start with yes.”
Stone is expecting a solid year in 2019 but said he will keep a cautious eye on the commercial market given how deep the cycle is.
“Deposit gathering is very competitive and deposit rates are very aggressively priced,” he said. “I think it will always be a challenge to continue to gather liquidity.”
Residential Market
Big banks also grabbed many of the top lender spots, although some community banks not only hung in, but competed with the larger ones for single-family purchase loans.
Bank of New Hampshire, the Granite State’s second largest state-charted bank, topped the list, originating 245 loans for a total volume of nearly $61 million, according to data from The Warren Group.
Other New Hampshire community banks that made the list include Mascoma Bank and Meredith Village Savings Bank.
Falvey said demand for homes has been strong, but even with the success, the bank’s mortgage business slowed a little due to low inventory.
Still, he said the bank did a lot of 10-1 and 7-1 adjustable–rate mortgages and traditional 30-year fixed mortgages.
“There are lower rates and people on average are still only in their existing residence for a seven to 10-year cycle,” Falvey said. “There is a lot of good rate protection and you get a lower rate out of gate.”
