When it comes to lending in the Bay State, David is giving Goliath a run for his money – quite literally, it seems.
Banker & Tradesman’s Top Lenders of 2012 contained few overnight surprises, but instead reflect a steady trend in which community banks are gradually catching up with, and even sometimes outpacing, national giants like Bank of America and TD Bank.
Community bankers have long touted their advantages lending in the towns they call home. For some, it’s old connections and goodwill in the community paying dividends. For others, acquisitions and investment in internal operations have paid off. And undeniably, public opinion in recent years has favored the little guys over multi-billion dollar behemoths.
In fact, Bank of America, once the top mortgage lender in Massachusetts, has continued its steady slide down the ranks. While it wrote 1,241 conventional single-family mortgages in 2011, it wrote 719 such mortgages last year totaling just more than $226 million. Wells Fargo, still holding onto its No. 1 spot from the previous year, wrote 1,712 single-family home mortgages last year worth $533.8 million, still down slightly from 1,921 in 2011.
But last year Arlington-based Leader Bank overtook Bank of America, as well as other giants like Sovereign Bank and USAA Federal Savings Bank, in that category, writing 820 single-family home mortgages worth about $246 million. That’s up significantly from the 482 mortgages it wrote in 2011, totaling $159 million.
Jay Tuli, vice president of retail banking and corporate development, attributed the increase to faster turn-around times on mortgages, and he said the bank has made an effort to differentiate the mortgage lending process from the refinancing process.
Leader Bank does a good deal of business in Middlesex County, and the market can be quite competitive in some of those towns, he said. A buyer who can close a loan in 30 days has a leg up on another prospective buyer whose bank will take longer to close.
Tuli told Banker & Tradesman that paperless loan processing has helped speed up closing times at Leader Bank.
Berkshire Bank also made a showing in single-family mortgages, condo mortgages and refinances last year. The Pittsfield-headquartered bank made 600 conventional purchase-money mortgages on single-family homes last year worth a little more than $173 million. The bank came in seventh in number of loans and sixth in dollar volume on the list, where it hadn’t so much as rated a mention last year.
Sean Gray, executive vice president of retail banking, said the bank’s acquisition of Needham-based Greenpark Mortgagecontributed to the uptick in residential lending and also expanded the Western Massachusetts bank’s presence into the eastern portion of the state.
Greenpark Mortgage Corp. also carried with it the endorsement of the Massachusetts Teachers Association as the organization’s exclusive home mortgage provider.
Another Massachusetts-based bank, Salem Five, essentially maintained its top lender status across all categories, under its subsidiary mortgage corporation.
Hyde Park-based Blue Hills Bank attained number one status on the jumbo mortgage list in terms of dollar volume, coming in at mortgages worth $594 million, but the $1.1 billion institution did not make the list in number of loans made, suggesting that perhaps a smaller number of very large jumbo mortgages vaulted it onto the list.
And Rockland Trust pushed its way onto the list of jumbo mortgage lenders last year, making about $191 million worth of loans.
Apartment Building Demand Increases
Rockland Trust also maintained its status as one of the top commercial lenders last year, making 212 commercial and retail mortgages worth just under $189 million.
And Belmont Savings Bank also made an appearance on that list, where it hadn’t last year. The five-branch, $700 million bank leaped into the top 10 by dollar volume, increasing its commercial lending to $85 million in 2012 alone.
President and CEO Robert M. Mahoney attributed the increase at Belmont Savings Bank to a greater demand for apartment buildings, fueled at least in part by a demand for rented apartments and the local demographics. He characterized most of his commercial borrowers in this area as already owning several apartment buildings and seeking to add more buildings to their portfolio or build new ones.
“I think we’re in a very fortunate place,” he said. “Interest rates are still low, so people can afford to borrow, and we’re still pumping out young students who want to live away from home.”
Mahoney also noted that he’d brought on a team of experienced lenders with roots in the area.
“They have a strong following of customers from other banks where they worked,” he said. “We’re basically financing old friends.”
A flurry of refinance activity is somewhat predictable in the current low rate environment, but while banks reported only a slight uptick in that category, credit unions and mortgage companies increased their refinance activity more dramatically last year. Digital Federal Credit Union, for example, retained its number one spot on the list, but in 2012, it made 2,236 loans in that category, compared with 1,731 in 2011. Similarly, Mortgage Master did 11,367 loans, worth about $3.5 billion, up from the 7,533 worth $2.4 billion it did in 2011.
Email: lalix@thewarrengroup.com
