BANKING CONSTRUCTION & FINANCE OVERVIEW
and August 2019 alone, five banks in the state reached a purchase agreement, including Stewardship Financial, Two River Bancorp, Bancorp of New Jersey and Oritani Financial. Within that time period, only Illinois and Texas ranked higher, with nine and eight mergers, respectively. In aggregate, New Jersey reported a total 18 bank acquisitions between 2019 and July 3, 2021, showcasing an ongoing healthy appetite for acquisition even in the midst of the pandemic. On the deposits front, New Jersey’s financial fabric outperformed 2019, even with fewer institutions. In June 2019, the Garden State counted 58 New Jerseychartered banks and 13 federally-chartered banks. In aggregate, New Jersey-based banks held $14 billion in deposits outside of the New Jersey market and $106 billion within the New Jersey market. In June 2020, the state counted 52 chartered banks and 11 federallychartered banks. Outside the New Jersey market, these financial entities held $17.7 billion while inside the Garden State market they held $119 million. The consumer lending environment was perked up by federal aid programs and funding, which are only now starting to run scarce, with the SBA reporting only $66 billion remained nationwide from its $292 billion portion of the $1.9 trillion American Rescue Plan in May 2021.
Harry Stone President & CEO Cooperative Business Assistance Corporation (CBAC)
What is CBAC’s purpose within the South Jersey community? The primary purpose of CBAC is to provide financing to small businesses in addition to providing technical assistance. We make commercial loans to businesses only. We provide as little as $1,000 and up to about $250,000. CBAC offers the Community Development Financial Institution (CDFI) advantage, under the U.S. Treasury Department. As a result of that, we are also an SBA microloan lender. Our mission is to provide financing to those communities, businesses and individuals that are not able to get credit elsewhere and at reasonable interest rates as well. As a nonprofit CDFI, we’re able to spend more time with our customers, assisting them. Our other real asset is that we partner extensively with commercial banks and economic development offices throughout South Jersey and Philadelphia How does loan demand through CBAC compare to pre-pandemic level? Our lending volume doubled during the past year because small businesses needed working capital, specifically for two reasons. First, if their cash flow was strained because of decreased revenue, increased expenses, such as PPE equipment purchases, or business reinvention expenditures, such as outdoor seating for eateries. Second, certain businesses have skyrocketed as a result of the pandemic, with certain industries that have been busier than ever. They also need working capital to sustain their growth because they are adding employees, products and revenues. What is your outlook on loan activity toward 2022? With all the resources coming into businesses through loans and financial aid programs, which for CBAC represented double the volume it historically deals with on a yearly basis, a lot has been done in the last 12 months and we do not know yet where that is going to balance out. Inflationary pressures are looming and labor issues have emerged. It’s too early to project one way or the other what the demand is going to be. www.capitalanalyticsassociates.com
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