Published December 2004

Banking & Lending
Briefs

Banner expands presence
in Puget Sound region
Walla Walla-based Banner Bank is growing to meet demand in the Puget Sound region, having recently purchased branches in Edmonds, Everett and Kent and focusing on regional customer needs by splitting its Metro Division into two groups.

Beginning in October, Banner’s Metro Division was divided into the East Metro Division and the West Metro Division, with the West Metro Division comprising Banner’s offices in Belltown, Bothell, south Everett, Madison and Woodinville, and new offices in Edmonds and on Evergreen Way in Everett.

The East Metro Division includes Banner offices in Bellevue, Federal Way, Kent, Kirkland, Redmond and Renton.

HomeStreet gives $2,000
to Recreation Scholarship Fund
HomeStreet Bank recently contributed $2,000 to the city of Mountlake Terrace’s Recreation Scholarship Fund.

The fund was established in 2002 to provide access to city-sponsored recreational programs for children in the Mountlake Terrace community who are unable to participate due to financial constraints.

Since the fund’s creation, more than 300 children have been able to take part in swimming, dance, preschool, sports and camp programs offered through the city’s Recreation and Parks Department.

“Every year, the parks department receives a growing number of requests for scholarship support from families that qualify,” said Marilla Sargent, banking manager of HomeStreet Bank’s Mountlake Terrace branch. “The kids get so much out of the activities, and it’s such an important resource in our community. We hope that others will join us in supporting this great program.”

SBA: Demand for 7(a) loans
still strong despite fee increase
Demand for the U.S. Small Business Administration’s 7(a) loan guaranty program remains high despite the increase in fees that began in October, the agency reported.

Since the start of the fiscal year, during the period of Oct. 1 through Oct. 22, the U.S. Small Business Administration approved a total of 6,215 loans totaling more than $1 billion through the 7(a) program, the agency reported.

Subtracting the carryover loan applications received before Oct. 1, the SBA approved 4,669 loans for $659 million. That compares to 4,205 loans approved for just under $644 million for the same period last fiscal year, the SBA said.

The increase in loan volume indicates that the increase in fees in October has not significantly affected demand, the SBA said.

The new fee structure ranges from a 2 percent guaranty fee for loans of $150,000 or less to a 3.5 percent guaranty fee on loans greater than $700,000. There also is an ongoing service fee of 0.5 percent of the outstanding balance of the guarantied portion of the loan.

By implementing the fee structure, the agency aims to be a self-supporting, “zero subsidy” government program, the SBA said.

OCC: Standards easing
for commercial credit underwriting
Commercial loan standards have eased over the past year, particularly in the areas of structured finance and syndicated/national loans — areas that had shown the greatest tightening in the past four years, according to a survey by the Office of the Comptroller of the Currency.

The OCC’s 10th annual survey of credit underwriting practices also noted that slightly more banks eased credit-underwriting standards than tightened them. Examiners reported that 13 percent of banks eased, 12 percent tightened and 75 percent did not change their commercial standards. In 2003, by contrast, many more banks tightened than eased; examiners reported that 47 percent of banks tightened and only 5 percent eased.

The survey found that underwriting standards for retail credit products also reflected more easing and less tightening, but the change from prior years was less pronounced. Most of the easing of retail standards was centered on credit cards and home-equity products.

“It is not surprising to find some adjustments to underwriting criteria due to improved loan portfolio quality, stepped-up competition and a more optimistic economic outlook,” said Barbara Grunkemeyer, deputy comptroller for credit risk. “However, ambitious growth goals in a highly competitive market can create an environment that fosters imprudent credit decisions.”

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