Area bankers and credit union executives said they are more optimistic about business for their institutions in 2013.
Last year was a good year, they said. But they look for 2013 to be better, if only slightly, and among the reasons is an increase in loan activity.
Jim Holt, president of Mid American Credit Union, said he expects the $196 million asset credit union to see an upswing in car loans, real estate loans and business loans.
He bases his expectations on car sales projections and interest and activity his loan officers are seeing.
“We’re expecting to grow our loan portfolio by about $2 million a month,” Holt said.
Brad Elliott, CEO of Equity Bank, which has more than $1 billion in assets, said a lot of his bank’s commercial customers have “pushed off” equipment purchases and expansions “as long as they can.”
“And we’re getting more loan demand from that,” Elliott said. “We’re seeing loan demand increases in the first quarter that we weren’t seeing a year or two ago.”
RelianzBank CEO David Harris said he’s expecting a strong year of growth for his $49 million bank, though he said the growth has come through hard work.
“There’s pockets of prosperity and pockets of stress as we come out of this economic recession very slowly,” Harris said.
Elliott said he expects to see more bank consolidation in the year ahead, but business for banks also will improve.
“On the lending trends overall, economic conditions are stable to improving,” he said.
Elliott said while lending activity will probably be higher, he thinks growing profits will be a challenge because interest rates are expected to stay low, which puts pressure on a bank’s net interest margin. “The net interest margin is how we make money,” he said.
Harris said those tighter net interest margins are prompting some banks to be more aggressive on the pricing of loans. The more loans they make, Harris said, the lower the pressure on their net interest margin and earnings.