Second verse, same as the first. That refrain might about sum up this year’s Top Lenders, as lenders who started the year apprehensive about interest rates saw rates and loan production more or less hold steady.But a happy exception was residential real estate. According to data compiled by The Warren Group, publisher of Banker & Tradesman, banks, credit unions and mortgage companies across the board saw their residential lending ramp up as interest rates stayed low.
Credit unions saw particular success in this area. For instance, in 2013, Digital Federal Credit Union booked 204 residential mortgages worth $53 million, but last year, it closed 368 mortgages worth $110.4 million, more than doubling its mortgage loan production year-over-year.
Elsewhere on the list, Arlington-based Leader Bank, long a recurring name on the residential purchase list of Banker & Tradesman’s Top Lenders, broke into the jumbo loan category last year, making 339 jumbo loans totaling $215.7 million. Jay Tuli, senior vice president, said that was driven partly by rising property values and partly by greater availability of jumbo loans. A qualified borrower looking to buy a million-dollar property today could put down 10 percent, where in the past he or she might have had to put down 30 percent.
The standards are still very tight, Tuli said, but that suits certain demographics very well.
“We see a lot of doctors who’ve recently finished residencies. They have the income but don’t have the savings yet,” he said.
Needham Bank also targeted jumbo borrowers in 2014, booking 163 jumbo loans totaling $164 million. Laura Dorfman, senior vice president of residential lending, said the bank had doubled its loan officer staff and made some enhancements to its products for jumbo borrowers.
It helps that Needham and Leader are both located squarely in jumbo territory, of course, but sustained low interest rates buoyed purchase business over the year and even pushed up refinance activity toward the end of the year. Dorfman, Tuli and others said that’s not what they were expecting to see at the outset of 2014.
“In the beginning of 2014, the year looked a little bit bleak. Refis had dried up completely, and on the purchase side, inventory was really, really low,” Tuli said. “But it ended up being a pretty good year.”
“We weren’t sure about rates, which I think have stayed lower longer than we thought, and we didn’t know how long it would take the new staff to ramp up,” Dorfman said. “But it all worked out in our favor. [The new staff] did really well and contributed quickly after they joined the bank, and rates were on our side.”
The Return Of Industrial
Commercial loan production took a slight year-over-year dip across the board, which you could well attribute to increased competition – especially in the Greater Boston area, already flush with banks.
Rockland Trust, which solidified its presence inside the city limits with its recent acquisition of Peoples’ Federal, topped the list in commercial and retail mortgages, booking 158 commercial or retail mortgages totaling around $144.3 million. The bank also closed 31 industrial or manufacturing mortgages, totaling $55.4 million.
Gerard Nadeau, executive vice president of commercial lending, said the bank saw particular success lending for healthcare-related commercial real estate, followed by multifamily, one-to-four family construction lending and industrial.
“Residential and hotels came back really early on [after the recession]. Office continues to bounce along a little bit. … But industrial has really come back very nicely,” he said. “I think we’re seeing the industrial-manufacturing user finally needing to add space on a net basis, which hadn’t been the case for a while.”
Eastern Bank last year closed 137 commercial or retail mortgages worth $141.5 million, and 38 industrial or manufacturing mortgages totaling $38.7 million.
Nick Moise, Eastern Bank’s director of commercial real estate, said that although 2014 was not necessarily a record year for the bank, it did compare with 2013, which was.
“We saw commercial, retail, industrial generally stay the same. We did quite a bit of multifamily lending, construction of new projects,” he said. “If anything increased for us, it was our multifamily lending.”
Indeed, Eastern Bank booked 65 multifamily mortgages last year totaling $31.3 million, according to Top Lenders data.
Looking to the year ahead, Moise said, “There are two things that do concern us: One is rising interest rates and the other is competition.”
“Our feeling is, we do want to compete but we’ll compete within reason,” he said. “That’s been our MO for a long, long time and we’re going to stick to that. We’ll be diligent in our underwriting and be sure we remain conservative.”
Email: lalix@thewarrengroup.com
