Bradley attorney Dave Dresher was quoted in the Birmingham Business Journal on the role of community banks in Birmingham’s commercial real estate lending scene. Business growth and the need for credit to finance business expansion has made loan growth across the country relatively flat.
Dresher explained that this has caused larger banks to allocate a greater percentage than they may have originally wanted toward real estate lending, as the opportunity was greater for lending in that space than in non-real estate commercial lending.
“Now, some banks may be getting back to a point where they are approaching concentration levels in real estate secured lending that may be as high as they wish to go (or their regulators want them to go), and so they may be looking more to diversify and spread lending into other business or consumer categories,” Dresher said. “This may mean that some larger banks just do not at this time have the same appetite for real estate lending as do the community banks, so they are not as willing to compete on price and loan terms for the business, even for owner-occupied lending.”
Dresher said smaller community banks are generally more inclined to real-estate secured loans, although some community banks -- particularly in the Birmingham market where small bank executives were previously with the larger banks -- are good enough at commercial lending to compete with the larger banks for that business in these smaller-size deals.
The complete article, “Birmingham community banks scoring more CRE loan business,” first appeared in the Birmingham Business Journal on August 11, 2016. (login required)