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After spending recent years repairing its balance sheet, Hanmi Financial (HAFC) is again looking to grow. To do so, it's eyeing markets that Korean-American lenders have traditionally neglected.
June 12 -
Shareholders took a big gamble that Atlantic Coast Financial in Florida can raise enough capital to save itself when they rejected a buyout offer. There are more funds to be had these days, but they are harder to get, experts warn.
June 12 -
Loan yields are still healthy relative to funding costs. Its the pileup of low-rate bonds on bank balance sheets that has crimped profit margins.
June 7
Go where the growth is.
That appears to be the motto of a group of banks that have transformed their loan portfolios. Since the dawn of the recession, these banks have aggressively shifted into commercial and industrial lending, a
Depending on your point of view, such banks might be pushing into a sector
Or they might just be hustling to fill space on balance sheets that would otherwise be occupied with cash and low-yielding securities that
Broadly, few banks have dramatically reoriented toward business loans, but NIMs at those that did have caught up with those that did not.
Among a group of nearly 900 publicly traded banks for which data is available across all the periods considered here, less than 40% increased the percentages of their loan portfolios devoted to business loans between the end of 2007 one month after
About 80 banks, or 9%, increased their allocations by more than 5 percentage points, and just 23, or 3%, increased their allocations by more than 10 percentage points.
The banks that increased their allocations by more than 5 percentage points had a median net interest margin of 3.56% in the first quarter, a hair above the median 3.54% for everyone else. From 2007 through early 2010, the median NIM at the banks with big increases in business loan allocations had lagged the median NIM among the others by 10 basis points or more.
Low rates have sharply
Reconfigurations toward business loans at some banks are the result of mergers. C&I as a portion of Hancock Holdings (HBHC) total loans jumped about 17 percentage points in the second quarter of 2011 to 25% after
Others, like Bridge Capital Holdings (BBNK), have simply pressed ahead with
Ultimately, even if competition for commercial loans is intense and growth is hard to find elsewhere, radical changes in a banks business focus seem rare.