First Bank Moving Lending
Center to Hazelwood
First Bank is shuttering its small business lending center in Folsom, Calif., and moving the office to its operations center in Hazelwood.
Article written by St. Louis Post-Dispatch reporter Lisa Brown. Reprinted from STLToday.com, 9/9/2011
Having the center closer to other bank operations and executives will enable the bank to focus more on growing small business lending, said Chris McLaughlin, executive vice president and director of retail banking for First Bank.
First Bank is a subsidiary of Clayton-based First Banks, which has 149 bank branches in Missouri, California, Florida and Illinois.
"For us, it will allow a faster response to our customers," McLaughlin said. "We were never a large player in (Small Business Administration) loans in St. Louis or most other markets, and we want to grow that."
Currently, First Bank has 900 small business loans totaling about $100 million, and of that amount, 20 percent of its portfolio are SBA loans.
McLaughlin said that with the new small business lending center, First Bank is seeking to grow its SBA loans to 60 percent of its small business lending portfolio.
The California office, which had 25 employees and opened five years ago, will close this month. The expanded Hazelwood office will open Monday (9/12) at First Bank's current office space at 600 James S. McDonnell Boulevard.
First Bank has recently hired several senior-level employees to staff the small business lending office, said Wayne Henson, the bank's SBA lending manager. It also has shifted some internal employees to the expanded center, including sales, underwriting and back office functions, the small business group will have 62 employees.
Low interest rates for some SBA loans are driving an increase in demand for the loans, Henson said. SBA 504 loans, for example, had interest rates of 4.69 percent for 20-year loans this week and 3.75 percent on 10-year loans.
"The opportunities for small business lending are very good right now," he said.
The bank is focusing on growing loans in its own backyard after some of its nationwide expansion efforts have failed. Privately held First Bank expanded in California in the 1990s and in Florida in 2007, where real estate loan defaults skyrocketed during the recession. Last year, the bank shrank its geographic footprint by selling 19 branches in Texas, 24 in the Chicago area, and 11 in central Illinois.
In 2008, to boost capital, First Bank's parent company participated in the federal Troubled Asset Relief Program, or TARP. Through TARP, First Banks owes the treasury more than $32 million in unpaid dividends on a $295 million investment made by the treasury.