By: Mike Keim, President, Univest Bank and Trust Co
Earlier this year, many of the largest banks in the U.S. reported a “lending slump.” With lending at the core of any bank’s business, this notable decline from bigger players calls attention to the differences between banks and how the pandemic impacted customers. The pandemic caused many banks, including Univest, to tighten lending guidelines and adopt a more cautious approach. That said, our size and approach allowed us to be nimble in our decision making compared to larger banks and we were able to continue lending, albeit with more conservative underwriting, and maintain our loan growth momentum.
While national players took a broader approach to tighten lending standards to address the business environment, we were able to take a more personalized approach to how and where we could lend. Evidence for this is in the numbers: outside of the Payroll Protection Program (PPP) loans that we facilitated over the last year, we increased our annualized lending 5.3% from December 31, 2020 and loans and leases increased 9.8% from March 31, 2020. During last year’s unusually difficult economic environment, our team’s dedication to our customers and commitment to the community allowed us to continue supporting our local businesses. Our customers were able to trust us to keep the financing spigot on despite tough times and were able to rely on us to maintain our support while bigger banks chose to cut back.
Our teams were focused on serving customers unique needs whether through PPP or other financing options. We actually saw customers in certain industries that were able to continue to grow despite the pandemic. For example, we work closely with many agricultural and commercial real estate entities in the region. People still need to eat and most businesses still require a physical location, so these were good credit risks over the last year. While larger lenders may have created “hard and fast” rules to cut lending based on certain criteria, we were able to create unique and tailored solutions. This was especially important for agriculture and commercial real estate customers disenfranchised by large institutions’ broad-brush approach who were in a position to grow despite the pandemic.
Additionally, our lending team’s drive to create and maintain quality relationships drove our ability to continue to work with customers and fill the needs to allow their businesses to grow over the last year. We have strong industry and community connections, knowledge of the markets we serve and trusted partnerships, which have allowed us to create unique solutions to support our customers. Building trust with our customers is paramount to the work we do as the businesses we work with know we will do everything we can to assist them.
Mitigation efforts have been effective in slowing the spread of the virus and vaccinations have increased, meaning the risk of further shutdowns for businesses is low. It appears we have made it through the end of the tunnel of the past year, and industries and economies will continue to recover. With this, I see lending continuing to trend upward as businesses get closer to returning to pre-pandemic function and industries impacted most by shutdowns are able to restart. The team at Univest looks forward to serving businesses and helping our communities return to a sense of normalcy. To learn more about how we can help, visit www.univest.net or call 877-723-5571.