Local lenders vanishing as banks consolidate
Where have all the bankers gone? The continental lenders, with their corner branches - Wells Fargo and PNC, Citizens, TD and Bank of America - still compete with JPMorgan Chase, Capital One, and other branchless brands for Philadelphia's corporate and mass consumer clients.
Where have all the bankers gone?
The continental lenders, with their corner branches - Wells Fargo and PNC, Citizens, TD and Bank of America - still compete with JPMorgan Chase, Capital One, and other branchless brands for Philadelphia's corporate and mass consumer clients.
But the local banks that focused on local businesses and their owners have consolidated, to cut costs and squeeze profits from low interest rates and weak loan demand in this slow-growing region.
BB&T, from North Carolina, has taken over National Penn and Susquehanna. Souderton- based Univest is absorbing Fox Chase Bank. Philadelphia's East River Bank agreed last month to sell to Downingtown's DNB.
Beneficial Bank, last of the multibillion-dollar banks once based in Philadelphia, made $93 million in new loans, mostly to businesses, in the year's first three months - but spent $82 million buying back its own stock to prop up share prices, betting that would be a better investment than more loans.
There were 13 area banks, large and small, at an event in Camden this month. It was designed to bootstrap small and midsize business growth and housing development atop the multimillion-dollar tax breaks New Jersey has been granting to lure Subaru, Holtec, and other suburban employers to fancy new Camden offices.
The bankers, mostly "community development" specialists, came to hear federal and nonprofit lenders tell how to apply for aid, in exchange for financing projects in what President Obama has dubbed Camden's "Promise Zone," one of several targeted areas across the U.S. (Mantua in West Philly is another.)
I asked Camden's mayor, Dana Redd, what happens to her constituents if all these incentives succeed and Camden development spreads from the taxpayer-subsidized waterfront to the worn brick neighborhoods?
Newcomers are welcome, Redd said.
"What I am more concerned about is Camden residents moving out," she told me. "We want to make sure we have the quality of housing here that can retain our residents."
The bankers were listening, but not committing.
Patrick Harker, new president of the Federal Reserve Bank of Philadelphia, is one of the few people whose job includes thinking about what's good for the entire region. He told me he was surprised to hear from Camden lenders and would-be borrowers that small and midsize factories and other emerging firms have a tougher time raising capital than the larger institutions with shiny downtown plans.
Too often, the money it would cost to update small properties for factories and warehouses won't drive up their value enough, in the city's still- depressed industrial areas, to serve as collateral to finance their growth.
"They have to fill the gap," Harker said. "The group we met with said this is a real challenge, in terms of getting the 50-person company, the 100-person company." Too often, the math for growth doesn't add up yet.
215-854-5194 @PhillyJoeD