Banks that hunkered down during the recession – and subsequent molasses-speed recovery – to recruit new lending staff, branch out and brainstorm new ways to reach customers saw those efforts pay off this year, at least if The Commercial Record’s Fast 50 is any indication.
The Fast 50 is The Commercial Record’s annual ranking of lenders who experience the greatest increase, by percentage, in loan volume and number of loans in the first half of the year.
Connecticut banks scooped up plenty of business this year on the residential side of the Fast 50. New Canaan-based Bankwell Bank increased its purchase mortgage volume to $10.8 million in the first half of 2014, an increase of 456 percent from $1.9 million in the year-ago period. United Bank in Glastonbury saw a 331 percent increase in purchase business, from just under $8 million last year to nearly $34 million this year.
Branching Out, Diversifying Channels
Washington Trust Co., which is headquartered in Westerly, R.I., benefitted from new locations in Connecticut – in Glastonbury and Stamford – and saw its purchase business increase 167 percent, from about $8 million in the first half of 2013 to $21.3 million in the same period this year.
“Connecticut’s always been in our backyard. We just never went after it,” said James L. Gueltzow, executive vice president of Washington Trust Mortgage Co. “In 2011, we opened a loan production office in Glastonbury, [and] we’ve had strong success there. We’re happy with the results and decided to keep growing that.”
Plus, Washington Trust can keep loans on its own portfolio, which gives the bank a little bit of an advantage in Fairfield County, where loan sizes can be “pretty robust,” Gueltzow said.
Washington Trust entered Connecticut in the midst of the refinance boom, but the bank took that time to solidify relationships with Realtors and attorneys so it could take advantage when market conditions improved. Indeed, many banks hired additional staff or brainstormed new products and strategies in anticipation of a housing market recovery. First County Bank in Stamford was no exception.
Year-over-year, First County Bank saw a more modest increase in its purchase mortgage volume, increasing to $16.4 million in 2014 from the $11.7 million in the same period last year. Still, Chairman and CEO Reyno Giallongo was more than pleased with his bank’s loan production, and attributed some of the increase to a concerted effort to speed up and streamline the application and prequalification processes.
Anticipating an uptick in purchase demand, First County added more staff in its processing and underwriting functions, “so there’s no funnel when the application comes in,” he said.
And in the name of diversifying its channels, Giallongo said First County Bank also focused on training its branch staff to prequalify and consult with potential borrowers.
“We know borrowers have choices, and it’s somewhat of a commodity market and rates are pretty much all the same, but it’s how you differentiate yourself on origination staff, streamlined process and speed of delivery,” he said.
Cautious Commercial Optimism
Meanwhile, on the commercial side of the house, several Connecticut community banks showed up on this year’s Fast 50. Essex Savings Bank, for example, saw a 507 percent year-over-year increase in its commercial loan production, to $4.2 million in the first half of 2014 from $692,500 last year. And Newtown Savings Bank increased its commercial mortgage production to a little over $5 million for the first half of the year, compared with just $324,900 in the same period last year, for an increase of 1,448 percent. No, that’s not a typo.
“Our sweet spot is between $1 million and 3 million, and we had a few of those come on this year,” said John Trentacosta, president of Newtown Savings Bank.
Trentacosta also noted an uptick in community banks working together on participation loans, and said Newtown Savings had worked on a few such deals. More generally, he noted that Newtown Savings was well-positioned to pick up its piece of the pie in Fairfield County, an area that he says is recovering well.
Gregory R. Shook, president and CEO of Essex Savings Bank, said much of the increase in Essex Savings Bank’s commercial loan production happened after the first quarter of this year. The first few months of the year, he said, were some of the slowest he’d ever seen.
But as the Constitution state thawed, business picked up. Many business owners along the shoreline jumped on attractively-priced properties they’d been eyeballing for some time, and Shook said Essex Savings picked up its fair share of new clients, many of them business owners disgruntled with how they’d been treated at big banks.
Like others, Shook feels positive for what the rest of the year may hold.
“I’m positive, but I’m cautiously optimistic,” he said. “I like to believe that this is the beginning of the turn-around for Connecticut.”
Email: lalix@thewarrengroup.com
See list of Fast 50 here
