Bank United Corp., a Houston-based thrift, said it has hired eight loan officers in an effort to become the largest Small Business Administration lenders in Texas.
"It's a growing market, and our small-business customers have grown considerably," said Doug Harker, Bank United senior vice president and director of business banking.
With $12.5 billion of assets and 20 SBA loan officers, Bank United is fairly new to SBA lending. The thrift began to make commercial loans in 1994 and small-business loans in 1995.
Mortgage financier Lewis S. Ranieri, former vice chairman of Salomon Brothers Inc., assembled Bank United in the late 1980s from a handful of failed thrifts. He took the company public in 1996.
Since then, Bank United has partly diversified away from traditional mortgage lending.
The bank plans to securitize any SBA loans it makes this year, Mr. Harker said. Bank United is the fourth-largest issuer of SBA securities in the country, according to a spokesman for the thrift.
For the 1997 fiscal year, Bank United made 50 SBA loans, totaling $17 million. The SBA recently gave Bank United preferred-lender status in Houston, Dallas, and San Antonio. That status allows the institution to make lending decisions without prior SBA approval.
"We bring the specialized knowledge of SBA lending along with the ability to service all of a small-business' needs," Mr. Harker said.
In its bid to become the largest SBA lender in Texas, Bank United will have to compete with Wells Fargo & Co. and NationsBank Corp., as well as with local nonbank lenders and community banks.
"Texas is competitive, but I think there is a lot of room there for more competitors," said David Bartram, senior vice president for San Diego-based Bank of Commerce, the largest bank SBA lender in the country.
Bank of Commerce recently hired a former GE Capital Corp. regional vice president to oversee loan production offices in Houston, Dallas, and San Antonio.
SBA loans, which are made with set lending criteria and loan documents, account for the vast majority of small-business loan securitizations.
Typically, half of all the government-guaranteed portions of SBA 7(a) loans used to finance purchases of real estate and commercial equipment are securitized.
In the 1997 fiscal year, $2.7 billion of such loans were securitized, an 8% increase from a year earlier, according to the SBA.
The securitization market for other types of small-business loans has lagged behind the 7(a) program, because banks have different lending criteria and use their own loan documents.
Two companies hope that will change.
James E. Murray, former president of the Federal National Mortgage Association, formed Small Business Funding Corp. in Washington last year to securitize loans made by community banks. Portland, Ore.-based Lori Mae, the Loan Origination Management and Exchange Corp., has similar plans.
Mr. Murray said Bank United's effort to make and securitize SBA loans would inspire other banks to securitize nongovernment-guaranteed small- business loans.
"It takes someone like Bank United that is very profit-oriented to get the ball rolling," he said.
