Huntington has gigantic lead in SBA loans
In the field of government-backed small business loans, Huntington Bank is leaps and bounds ahead of competitors in the Cleveland market.
And with plans to expand that business even more, it's a position Huntington could retain a tight grip on, even as other banks ramp up efforts on that front.
But it's not just Northeast Ohio where Huntington is crushing the scene for U.S. Small Business Administration 7(a) loans, the SBA's flagship and largest program.
The Columbus-based regional bank, with just about $100 billion in total assets and a nine-state footprint, is the second-largest provider of SBA 7(a) loans in the country in terms of loans made (3,905) and fifth in terms of dollars lent out ($633.5 million), according to SBA data for the 2016 fiscal year.
That puts it in the company of some of America's largest national banks.
Comparatively, Wells Fargo Bank N.A., the most active SBA lender in the country at 8,737 loans made (totaling nearly $2 billion), has more than $1.8 trillion in total assets and offices in more than 40 states.
In the SBA's Cleveland district, Huntington made 1,091 7(a) loans in the past year, or about $134 million worth, according to data from the SBA's Cleveland district.
That means more than 20% of its total SBA 7(a) dollars was lent in this district, which covers 28 Northern Ohio counties between the Pennsylvania and Indiana borders and is anchored by the Cleveland market.
"Everything with us is growing right now, really," said Margaret Ference, senior vice president and SBA group manager for Huntington.
"And we are willing to lend to these businesses when no one else is," she said. "We have tried to build a sustainable, scalable model, keeping in mind that it still needs to make sense for us as well to make something like a $50,000 loan. Some banks won't go that low."
Loans between $25,000 and $50,000 fall into the lower end of the SBA 7(a) spectrum. The upper end is between $1 million and $5 million.
While it's a bit of a generalization to say no other banks are participating, the SBA figures show that Huntington is taking on a larger number of the smaller loans.
Demand for smaller loans
Through the last five years, Huntington has provided somewhere between 60% and 70% of all SBA 7(a) loans in the Cleveland district, said Gil Goldberg, director of the Cleveland SBA district. The figure peaked in 2014 with 71% of loans, but dropped to 64% in 2016.
There was actually a small dip in overall SBA lending for Huntington between 2015 and 2016. The recent figures show a drop of about $1.9 million in total dollars and 110 fewer loans made compared with the prior year.
In the Cleveland district specifically, SBA lending grew by 8% to top $367.8 million in 2016. But that was on 1,770 loans, which is 52 fewer than 2015.
"For Huntington, this still signifies a huge commitment," Goldberg said. "But the figures show that other banks are really participating in the SBA market. They want to make a mark and have been chipping away at Huntington's dominance."
Some of the overall increases in SBA lending are coming from more community bank participation. While some smaller banks might make a couple SBA loans in a year, as a group, those smaller banks are "playing a more significant role," Goldberg said.
When comparing individual banks, SBA growth for Huntington does show a greater propensity to support smaller loans. But in general, the bank lends across the spectrum better than others, Goldberg noted, as they still make large loans.
Nonetheless, nearly 80% of all SBA loans at or less than $25,000 in the Cleveland district — 375, to be exact, out of 473 — came from Huntington in 2016.
"If you look at loans $1 million and over in 2016, we did 81," Goldberg said (Huntington did 37 of those). "That shows the market here is really for those smaller loans."
Expect more in 2017
Huntington's 2016 activity marks an increase of more than 450% in both loans made and dollars lent since 2009, a period when the bank began investing in the business, which included accelerated support of SBA loans.
"We wanted to invest here," Ference said. "We believed the economy would recover faster than even some of the experts put out there. So we ramped up staff and took time to prepare, expecting an increase in demand."
Granted, the SBA program has grown consistently since then as well, with demand gradually increasing as businesses sought growth in the wake of the economic downturn.
As a whole, the SBA 7(a) program hit record levels in 2016, supporting $24.1 billion across 64,073 loans.
And other banks have certainly participated in that, including KeyBank N.A.
The Cleveland-based bank ranked third in the Cleveland district in 2016, making 54 loans for a total of $14.6 million, a 34% increase over 2015 despite fewer loans made. They were bested in that business in the local district by U.S. Bank N.A., which made 87 loans for a total of $21 million.
Nationally, Key, which has $135 billion in total assets, ranked 14th in terms of total SBA 7(a) loans, making 538 of them for a total of $222.2 million.
That's an increase of 44%, the largest gain among the top-20 SBA lenders with $15 billion or more in assets.
The bank, like others, has been a long-active player in the SBA space. But
that's still a significant increase.
Jim Fliss, senior vice president and national SBA manager for Key, said the bank intends to do even more in the coming year. Part of that will surely come from the expanded footprint provided to them through its recent acquisition of Buffalo's First Niagara Financial Group.
Similarly, Huntington intends to grow its SBA lending. Besides an ongoing commitment to the program, new markets courtesy of the acquisition of Akron's FirstMerit Corp. inherently grows lending prospects.
"In lock step with the FirstMerit merger, we are growing dramatically in Akron and Canton and Cleveland. We have increased salespeople and credit and operational staff here as a result," Ference said. "We do certainly see demand on the rise."
One line of thinking is that the need for SBA loans might dwindle as the economy continues to improve, businesses do better and banks feel more comfortable making loans without that government support.
"But we believe there's still a lot of demand for these products," Fliss said. "Regardless of the economy, what never goes out of style is that many business experience cash crunches. These products help companies conserve cash and cash flow."
7(a) GUARANTY LOAN APPROVALS BY LENDER CLEVELAND DISTRICT OFFICE FY '16 (10/1/15 THRU 9/30/16)*
|Lender||7(a) Loans||7(a) Amount|
|THE HUNTINGTON NATIONAL BANK||1091||$134,278,100|
|U.S. BANK NATIONAL ASSOCIATION||87||$21,068,600|
|KEYBANK NATIONAL ASSOCIATION||54||$14,693,900|
|CITIZENS BANK NATL ASSOC||54||$4,493,100|
|GROWTH CAPITAL CORPORATION||49||$4,273,000|
|FIRSTMERIT BANK, N.A.||49||$9,538,400|
|FIFTH THIRD BANK||40||$8,293,100|
|JPMORGAN CHASE BANK NATL ASSOC||25||$3,702,600|
|PNC BANK, NATIONAL ASSOCIATION||24||$3,369,000|
|CONSUMERS NATIONAL BANK||19||$4,569,700|
|STEARNS BK NATL ASSOC||17||$3,740,200|
|LIVE OAK BANKING COMPANY||14||$12,219,000|
|CELTIC BANK CORPORATION||14||$2,886,800|
|NEWTEK SMALL BUS. FINANCE INC.||12||$13,855,000|
|WESTFIELD BANK, FSB||11||$2,567,200|
|THE STATE BANK AND TRUST COMPA||10||$3,858,900|
|LIBERTY BANK NATL ASSOC||10||$3,126,000|
|FIRST HOME BANK||9||$1,950,000|
|WELLS FARGO BANK NATL ASSOC||8||$2,730,400|
|COMM. & SAVINGS BK OF MILLERSB||8||$2,711,700|
|FIRST FED. BK OF MIDWEST||8||$1,077,700|
|FIRST NATIONAL BANK||8||$1,741,300|
|UNITED MIDWEST SAVINGS BANK||6||$9,077,000|
|WEST CENT. DEVEL CORP||5||$367,000|
|WEST TOWN BANK & TRUST||5||$4,731,000|
|DOLLAR BANK A FED. SAVINGS BK||4||$123,800|
|SPIRIT OF TEXAS BANK, SSB||4||$507,600|
|FAITH COMMUNITY UNITED CU INC.||4||$701,000|
|FIRST SAVINGS BANK||4||$3,702,000|
|FIRST WESTERN SBLC, INC||4||$6,958,000|
|WAYNE SAVINGS COMMUNITY BANK||4||$1,313,700|
|FIRST FINANCIAL BANK||3||$2,150,000|
|FIRST MERCHANTS BANK||3||$469,900|
|EVOLVE BANK & TRUST||3||$1,205,000|
|FIRST NIAGARA BANK NATL ASSOC||3||$1,664,000|
|HOME SAVINGS & LOAN CO OF YOUN||3||$10,273,000|
|GROW AMERICA FUND, INCORPORATE||3||$1,572,000|
|FIRST FEDERAL LAKEWOOD||3||$2,439,000|
|FARMERS NATL BK OF CANFIELD||2||$761,600|
|THE BANCORP BANK||2||$7,455,000|
|TALMER BANK AND TRUST||2||$347,500|
|CORTLAND SAVINGS & BK. CO.||2||$112,700|
|FIRST FED. COMMUN BANK NATL AS||2||$250,000|
|PATHWAYS FINANCIAL CU||2||$65,000|
|THE APPLE CREEK BANKING COMPAN||2||$370,700|
|THE CROGHAN COLONIAL BANK||2||$353,600|
|HOME LOAN INVEST BANK F.S.B.||2||$2,580,000|
|THE COMMUNITY BANK||1||$125,000|
|CRF SMALL BUS. LOAN COMPANY LL||1||$225,000|
|BUCKEYE COMMUNITY BANK||1||$390,000|
|COMMUNITY DEVEL TRANSPORTATION||1||$250,000|
|COLUMBUS FIRST BANK||1||$4,005,000|
|AMERICAN BUSINESS LENDING, INC||1||$2,125,800|
|COMMUNITY STAR CU, INC.||1||$185,000|
|CITIZENS BANK OF PENNSYLVANIA||1||$45,000|
|PACIFIC PREMIER BANK||1||$1,350,000|
|HOMEBANC NATIONAL ASSOCIATION||1||$1,400,000|
|BANKUNITED, NATIONAL ASSOCIATI||1||$1,645,800|
|1ST SOURCE BANK||1||$36,000|
|FREEDOM SMALL BUS. LENDING BID||1||$450,000|
*Notes: The information shown above is for 7(a) approvals during SBA's Fiscal Year to Date - 2016 (October 1, 2015 through September 30, 2016). This report covers loans made through the Cleveland District Office whose territory covers 28 counties in northern Ohio The data provided is from a locally maintained database and is sorted by number of loans. The user of this information should be aware that changes may occur in the final data due to subsequent loan increases/decreases or other factors affected by timing differences. INFORMATION IS CURRENT AS OF 09/30/16.
Category: Bank loan