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NH banks announce record lending in strong economy

New Hampshire Union Leader

June 23. 2018 6:11PM
Last year "was a record - we're experiencing and expecting to see 2018 to be even better," said Dan Morrison, president and CEO of Optima Bank & Trust, shown here in 2013 with his wife Pam. (Gretyl Macalaster/Union Leader Correspondent file photo)

A strong economy is fueling record business borrowing for several banks operating in New Hampshire.

Last year "was a record - we're experiencing and expecting to see 2018 to be even better," said Dan Morrison, president and CEO of Optima Bank & Trust, which operates branches in Bedford and the Seacoast.

Records were notched in the number of loans and total dollar amount, he said.

James Key-Wallace, executive director at the state Business Finance Authority, said his organization works with most banks in the state to help businesses secure loans.

"These past few years have been a real good time to be a bank," Key-Wallace said. "I'd say all of them are seeing record or near-record lending activities, both in the real estate side as commercial real estate as well as operations, lines of credit, things like that."

Higher appraisals for commercial properties have meant businesses can secure larger loans, he said.

Banks are competing "to win the business," benefiting companies with lower fees or rates in some cases, Key-Wallace said.

Some banks are growing in size.

Primary Bank, which opened in Bedford in 2015, will open its first branch, at 1662 Elm St. in Manchester this fall, adding six new employees.

"We will be 3 years old next month, and we have continued to experience dramatic growth," said Bill Stone, president and CEO.

Last year, Primary's total assets grew by 63 percent to $147 million, and its loan portfolio increased by nearly 75 percent to $116 million, Stone said.

The bank saw increases in its first quarter, with assets up nearly 10 percent and its loan portfolio up by 11 percent, he said.

"We have continued to have a very healthy economy in New Hampshire, so I think a good economy will always help that," Stone said.

The Provident Bank, which has five New Hampshire branches, grew its commercial and industrial loans by 45 percent between the fourth quarter of 2016 and the same time frame in 2017.

That landed the bank seventh on the list of U.S. banks with under $1 billion in assets with the largest percent growth in such loans, according to an American Bankers article.

"Companies are really looking to grow their businesses, do additions, purchase new equipment, having increased lines of credit for growing business needs," Provident CEO Dave Mansfield said.

The bank notched records for the number of loans and total dollar volume, he said.

Mansfield said some businesses are expanding their lines of credit as their business grows.

"Customers don't pay immediately. Most of them are on 30- to 45-day terms, so to help with the cash flow, they need lines of credit that are based on those receivables," Mansfield said.

"The other thing we're seeing is just the demographics ... a lot of the business owners are reaching retirement age, and we are helping businesses transition (to new owners)," Mansfield said.

Keeping companies operating locally rather than being absorbed by a larger competitor that could move operations elsewhere also benefits the region, he said.

Optima's Morrison said he expects changes in federal tax law will spur more development. With businesses allowed to depreciate equipment purchases more quickly, they will be encouraged to buy more.

Dover economist Brian Gottlob said data is hard to interpret because of various factors, including the fact that loan information reported to the Federal Deposit Insurance Corporation is based on where the bank is headquartered, not where the loans are made.

Between the first quarter of 2017 and the first quarter of 2018, data reported to the FDIC by banks shows an increase in commercial and industrial loans of 12.6 percent in New Hampshire versus 4.7 percent for the United States as a whole, Gottlob said.

Bankers are seeing bright months ahead.

"Six months from now, we're going to continue going strong," Morrison said.

In the next six months, Mansfield said, "we certainly don't see things slowing down."

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