Despite CU Presence, Midsize Banks Doing Just Fine with Commercial Lending

WASHINGTON – Will community banks, particularly, midsize banks, back off a bit with their concerns of credit unions offering business loans? Recent statistics indicate they have all the business they can handle. Midsize banks are starting to see a rebound within their business lending portfolio. While data culled by the Wall Street Journal show the Sept. 11 terrorist attacks hit banks hard in the business lending area with commercial loans outstanding at $1.074 trillion compared to today’s $889.7 billion, according to the Federal Reserve’s most recent commercial and industrial loan analysis, the picture is starting to look a little rosier. The demand for commercial loans has become “moderately stronger” as 44% of senior loan officers indicated in a July survey from the Federal Reserve. That number is significantly up from last year’s percentage, which was 12% in October 2003, the WSJ reported. Loan Pricing Corp., a New York firm that analyzes the loan market, says new syndicated loan issues – including investment grade, leveraged and institutional – totaled $272.5 billion for the first nine months of this year, the WSJ reported. FDIC Chief Economist Richard Brown also told the WSJ that “the fundamentals behind commercial and industrial lending are in pretty good shape.”