Business borrowing "has slowed some" in the Philadelphia area since Christmas, bank analyst Frank Schiraldi tells clients of Wall Street bank investment firm Sandler O'Neill + Partners in a report today.
At Beneficial Bank, the largest lender based in Philadelphia, the current loan "pipeline is at about 70% of year-ago levels," Schiraldi wrote, citing Beneficial boss Gerry Cuddy and other managers' remarks to Wall Street investors at a conference last week.
Beneficial said other Philadelphia banks also reported slower business loan growth, which Schiraldi said confirms recent Federal Reserve data projecting "a broader slowdown" this year, after lending revived in 2015-16.
Separately, Philadelphia-area industrial employers continue to close:
Last month Axeon Special Products said it's shutting its Paulsboro, N.J. refinery, once the largest of its kind, laying off 115 workers in an area already studded with shuttered oil and chemical plants.
And Philadelphia-based PaperWorks LLC, controlled by 76ers billionaire co-owner Marc Leder's Sun Capital buyout fund, is shutting its Manayunk plant, idling 147.
Despite the recent drop-off, Philadelphia-area business remains generally "healthy," with borrowers paying back on time; Beneficial expects "high single digit" business loan growth in 2017, though not as much as in the previous couple of years, Schiraldi wrote in his report.
Since loan growth is slowing, Beneficial is looking for other banks to buy -- so long as the company can find smaller southeastern Pennsylnnaia and South Jersey banks at prices that will pay for themselves over the next five years.
The company has digested Conestoga Bank (including ex-Sen. Vincent Fumo's old Pennsylvania Savings Bank) after chopping 40% of the smaller company's people and other expenses, and closing six branches without a net loss in customers, Schiraldi concluded.