It’s been a long, challenging couple of years for Massachusetts’ lending institutions.
In many ways the consumer-facing aspect of banking hasn’t changed much. Community banks and credit unions are as committed to their founding ideals as they have ever been – they’re still taking local deposits, making local loans and serving as a valuable financial resource to the residents of the state. They continue to sponsor town days, donate to nonprofits and award scholarships.
But behind the scenes, from the Dodd-Frank fallout to prolonged low interest rates to TRID regulations to cybersecurity issues, the financial industry has changed in ways that we’re still trying to parse. Margins are tighter and interest income isn’t likely to come back any time soon – everyone is feeling squeezed from all sides, especially the smaller institutions.
And yet somehow they are making it work. This issue of Banker & Tradesman contains the annual Fast 50, a ranking of the top 50 fastest growing lenders in the residential and commercial real estate industries in our fair state. Comparing the first six months of 2016 to the same timeframe last year, these lenders cross all categories – banks, credit unions, mortgage companies and others.
The volume and number counts include both purchase and nonpurchase loans; breakdowns by company vary. Some cite robust refi portfolios this year as helping boost their rankings; others report moving strongly into underserved populations in their areas; still others say they’ve expanded their geographic territories and are seeing robust growth outside of Greater Boston.
Low interest rates have held on for so long one might assume any homeowner who was going to refi has already done so, but no, say local lenders – the refi market, while no longer at its peak of several years ago, remains strong.
On the other side of the low-interest coin, mortgages are more affordable than they’ve ever been – a boon for homebuyers, as it’s not like the homes are cheap to begin with. As the real estate recovery has gained traction in Massachusetts, rising home prices and sales figures have provided inroads for local lenders, and they are taking full advantage.
While housing inventory in the state remains low and median sale prices reach record highs, there’s also opportunity in multifamily development. Again, savvy lenders are finding success not only in Boston and its immediate environs, but also in the state’s still-struggling Gateway Cities.
On the commercial side, a slight cooling of the upper echelons (where local lenders don’t play anyway) has brought increased focus on the middle tier. There’s a whole world of commercial investment opportunities beyond Boston’s borders – and local institutions are scooping up those deals.
It’s a strange new world for financial institutions – particularly in the residential real estate sector – but the commonwealth’s lenders are a smart bunch and they’re already figuring it out.
Congratulations to this year’s Fast 50 – keep up the good work, and we’ll see you in 2017.
