Slideshow Small-bank specialties on the rise

Published
  • February 08 2017, 2:50pm EST
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Here are five ancillary business lines that lately have appealed to community banks pursuing new sources of loans or fee income.

Equipment finance

A number of banks have recently announced plans to get into equipment finance, which typically involves making a loan backed by a borrower's machinery. It is often viewed as a natural for commercial lenders that want to branch out.

Ameris Bancorp in Moultrie, Ga., announced in January that it would enter the business after hiring a team of lenders. Flushing Financial in New York in early February disclosed its plans to start an equipment-finance division after landing a veteran banker to launch the group. Radius Bank last year bought a national platform in this business.

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Public finance

Texas Capital Bancshares in Dallas hired three specialists late last year to manage a new, nationwide public finance business. It will provide financing for capital projects pursued by state agencies, local governments, schools and nonprofits. The unit has funded more than two dozen loans in recent months. First Internet Bank in Fishers, Ind.; HomeTrust Bancshares in Asheville, N.C.; and Opus Bank in Irvine, Calif., are among the other banks that have launched or expanded their municipal finance operations.

Insurance-premium finance

Ameris also entered the insurance-premium finance business — where customers borrow to cover the cost of insurance premiums — by buying a minority stake in U.S. Premium Finance. Ameris is hoping to buy the company outright once it resolves a regulatory order.

On the other hand, Independent Bank in Grand Rapids, Mich., is getting out of premium finance after 14 years in the business. The company, which is selling its finance unit to a nonbank, said that it wants to focus on its core banking operations.

Senior care construction loans

United Community Banks in Blairsville, Ga., hired a four-person team last year that specializes in financing senior care facilities, tapping into business opportunities tied to an aging baby boomer generation. Other banks, including Wells Fargo, have formed specialty finance groups to target the senior care market.

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SBA lending

Centric Bank in Harrisburg, Pa., Fulton Financial in Lancaster, Pa., and other banks are hiring loan officers to ramp up Small Business Administration lending. State Bank Financial in Atlanta hired a nine-person SBA lending team in North Carolina last year, while BankUnited in Miami Lakes, Fla., and Byline Bancorp in Chicago announced deals to add national SBA platforms.