VantageSouth Bank in North Carolina is taking steps to rekindle lending to home builders.
The subsidiary of $794 million-asset Crescent Financial in Raleigh announced Monday it has launched a division to address the financing needs of residential builders and developers in Virginia and the Carolinas.
The company said it has named Bill Bickett to lead the group, which also includes Clark Gregory and Jay Hall. All three men worked at worked together at Royal Bank of Canada's U.S. subsidiary before it was bought by PNC Financial Services Group (PNC) in March. Loans to construction firms contributed to the unit's financial troubles before its takeover by PNC.
VantageSouth said in a news release that an uptick in applications for building permits in all three states make the present a good time to lend to builders and developers.
"Adding this new division aligns with our strategy to be the bank for businesses and business owners," Steve Jones, president of VantageSouth, said in a news release. "As the housing market rebounds, we are in an excellent position to provide financing for well-qualified builders and developers."
Bickett added in a news release that the division would aim to serve small- and mid-sized builders who larger lenders forsake. "Larger developers and builders can self-finance, but smaller organizations do not have that luxury," he said.
VantageSouth's move comes amid signs that bankers are showing interest in making construction loans as the housing market starts to regain momentum. Housing starts rose 3.6% in October from a year earlier, to an annual rate of 894,000 units, marking a four-year high, according to Bloomberg.