Credit still flowing, but demand is down at banks, credit unions - South Florida Business Journal:

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The bad news is that loan demand has dropped dramaticallyy and greater deposits will be needef if and when the demand for credit increases, according to Rudy Schupp, CEO of Boca Raton-baser 1st , ranked No. 20 on the Soutuh Florida Business Journal’s list of top communituy banks. “There are several forces at play in thecreditf markets,” said Schupp, who also serves on the board of the Federal Reservw Bank of Atlanta. “We are primarily a busines s bank and arestill lending, but the lending demans from our customer base has shrunjk quite a bit.
” Customet deposits have also shrunk, as title companies, real estat e firms, law firms and others have paredr back the volume of “Very few banks are growing core depositsa at any exciting rate,” Shupp said. “The ratio of depositx to loans – even at the reduced demand – is runninvg about 100 percent of depositsto loans. That meanws the industry will need more capitalo to grow inthe future.” The customer mix of 1st United includes law firms, titlew companies, physician practice groups, real estate agencies, and smallk and mid-cap businesses. It has offices in Broward, Palm Beach and Indiajn River counties.
“Business expansion is down from 2005, 2006 and with customers today adding fewnew employees, additional offices or new produc t lines,” Schupp said. His bank usuallyu runs an average $90 millionh to $100 million pipelinre of prospective business with one group approved and awaiting closinyg while the other groupl is in due diligence and waiting tobe approved. our total pipeline is down two-thirds, to about $35 and our business credit loanrequirementse haven’t changed,” Schupp said. There has been a change in residentia and commercial real estate loan although those loans are still being as well.
“What has changed is that we are not relyinv on as robust an economic outlook as a year or two Schupp said. “For spec residential loans, we are lookingy for good net worth from substantial individualsxor entities.” For a commercialk loan, say for a non-owner occupied office funding was previously forthcoming when pre-leasinv reached 50 percent. Today, there needzs to be enough pre-leasingh to carry all the building’s costs, as well as a good financia l profile of theloan guarantors. “Wre are still lending, but are primarily focused on ourexistiny clients,” said T.L. Brown, chief marketingv officer at Miami-based , ranked No.
10 on the Businesds Journal’s list of top community The fast-growing bank has 28 branches inthe tri-county with the first Palm Beach County officeds recently opened in Boca Raton and Boynton Beach. “Business loans are being made to businesses that bank with us and that we Brown said. “We will still look at new accounts, but we are very versus beingjust transactional.” For , ranked No. 50 on the Busines Journal list, land loans are out but everything else is according to bank PresidentJorge Triay. “We’rew not looking at land loans because it’s hard to evaluate how long they will have to be he said.
“We’ve done other recengt real estateloans – small and large apartmentt buildings, a new renta complex, gas stations.” He said followingg the same conservative model for 12 years of knowing customerds well has resulted in a high-quality loan “We have a broad range of businesd clients including retailers, restaurants and lightg industrial,” Triay said. “We look for operators who have solid experiencre intheir industries.” The IBM Southeast Employees Financial Creditg Union, based in Boca Raton and rankex No.
3 on the South Floridza Business Journal’s list of top creditg unions, has a wide geographicak footprint, with additional offices in Atlantaand Birmingham, Ala.