Commercial lending

On Sep. 30, 2021. Dollars in thousands.

The world’s leading rater of green credentials is rewarding some of Wall Street’s biggest banks even though they continue to lend billions of dollars to fossil-fuel companies.

The Indiana bank announced a five-year, $8.3 billion agreement with the National Community Reinvestment Coalition in connection with its acquisition of First Midwest Bancorp. The Federal Reserve approved the purchase last month.

Underwriting has become more lenient amid increased competition for corporate borrowers, and as Paycheck Protection Program loans are disappearing from banks' balance sheets.

Blazing demand for leveraged loans is allowing companies to reduce borrowing costs by tinkering with a provision many viewed as key to weaning the industry off the London interbank offered rate.

Multifamily and specialty finance loans, which were highlights during the fourth quarter, should increase further in 2022, company executives said.

The Pennsylvania bank is working with the data provider Enigma and Capital One on a platform they are hoping other banks will use. The technology handles all aspects of the loans and provides data and analytics on borrowers.

A few months ago bankers were more hopeful than confident about an end to depressed demand for business credit. Now CEOs at Huntington, Fifth Third, Mercantile Bank and other companies are touting strong fourth-quarter loan growth, burgeoning pipelines and local job creation as reasons for optimism.

Loans to car sellers plummeted earlier in the pandemic due to chip shortages that hampered vehicle production. But supply improvements since last fall have fueled the start of a rebound.

The Mississippi bank’s addition of more than a dozen bankers last year helped drive a $250 million increase in new loans during the fourth quarter. To keep the momentum going, CEO John Hairston said he intends to hire aggressively in 2022.