While economic conditions in the state of Connecticut are certainly not ideal, lenders are finding success in the residential and commercial sectors by taking community-driven approaches and following through on strategies they put into motion in previous years.
The Warren Group, publisher of The Commercial Record, reveals last year’s top lenders by volume and number of loans in a variety of lending categories in Connecticut.
Big banks such as Wells Fargo led the way in single-family residential mortgages, with over $424 million total volume. But smaller banks like Webster Bank, United Bank and Liberty Bank also made the list, attributing their success to an added focus on the burgeoning first-time homebuyer market.
“The Connecticut Housing Finance Authority has products with various down payment assistance and we did quite a few those,” Shirley Theriault, senior vice president and manager of retail lending at Middletown-based Liberty Bank, told The Commercial Record. “I think we did more of those this year and got more involved with down payment assistance.”
The $4.7 billion asset institution originated 345 residential single-family mortgages for a total volume $87.7 million in 2017, according to analysis from The Warren Group.
Liberty Bank was also one of the top lenders in terms of refinancing, with 1,164 transactions for a total volume of about $229 million. A lot of those deals, said Theriault, were driven by customers taking out cash for home improvements or combining their first mortgage with their home equity products.
Theriault said the bank saw success by offering a choice selection of products and services and getting its 18 loan originators out into the communities the bank serves. The bank has also sped up its turnover times on loan decisions, and offers its own Community Reinvestment Act product, which only requires 3 percent down and covers mortgage insurance.
Liberty Bank also got creative by establishing a portfolio for mortgages slightly below the standards set forth by Freddie Mac or Fannie Mae, but that the bank deemed did not pose a credit risk. For example, someone who holds the title of an LLC might fall under this category.
Webster Bank was another bank that got mileage out of first-time homeowners.
“Our strategy has been very consistent focused all around the education piece, particularly more so now than ever, as the industry is moving to true purchase market that hasn’t been seen in years,” said Simon Tahan, senior vice president and director for home loans at Webster Bank. “We are partnering with community organizations, getting our originators out in the field and trying to get consumers to understand the value of owning a home verse renting a home. The mortgage process over the years has become very complex, so education is important on that front as well.”
The $26.5 billion asset bank made 479 residential single-family originations for a total volume of $126.9 million, according to The Warren Group. Webster also did 3,780 residential refinancing transactions for a total volume of $588.7 million.
Tahan said the bank has done well in other markets in which it has a presence, including Boston and Westchester, New York. But the relatively flat real estate market in Connecticut has also presented an opportunity for first-time homebuyers, especially with all the down payment assistance programs available, he said.
“Chances are, most Millennials right now out of school are living with their parents or renting,” Tahan said. “But with good economic activity, I would anticipate Millennials will really start looking at homeownership and getting educated about the process.”
Success in Commercial Sector
With the economy the way it is, the banks that flourished in the commercial market did so by completing deals in 2017 that first entered the pipeline years before.
Union Savings Bank decided four or five years ago to focus on the commercial sector, and the strategy has paid off, as they were one of the top lenders in the category.
“It was one of our best years in the history of the bank,” Cynthia Merkle, president and CEO of Union Savings Bank, told The Commercial Record. “From an interest rate perspective, it did not make sense to continue that path (mostly residential) without further penetrating the commercial market. … For the first time, our commercial portfolio exceeded our residential portfolio.”
Union Savings Bank originated 81 commercial loans for a total volume of close to $180 million, according to analysis from The Warren Group.
Merkle credited her top-notch lending team for the success, which came largely in Danbury, a community she said that for the most part has weathered the storm in Connecticut.
“When we recruited new lenders, we put them strategically around Danbury so we could penetrate extended market areas commercially,” she said.
Projects the bank financed include those in the health care and medical facility arena, housing for seniors and some retail, although Merkle said the bank checks incoming tenants on these properties very carefully.
The bank also made gains in the small business lending area on credit needs of $500,000 and less by streamlining its processes so businesses could access capital more efficiently.
See all of 2017’s Top Lenders.
