Local Banks Say They Will Increase Lending In 2012


Thank you for visiting my website and Sold on Maui Blog section. The article below from Pacific Business News (reporter Lynn Nakagawa) explains how local banks say they will increase lendng in 2012.

Hawaii bankers predict modest recovery in the state’s economy in 2012 and plan to increase lending in specific areas in response to recovering consumer confidence.

Individual banks are offering new loan products to attract qualified and new borrowers, such as American Savings  plans to more heavily promote its clean-energy loans in 2012 and Finance Factors opening up lending to foreign borrowers and increasing its capacity for land loans.

“Land loans are back on track,” said Steve Teruya, president and chief operating officer of Finance Factors. “We have the capacity to put more land loans on our books and we’re starting to see more of that coming in.”

He said the beginning of 2011 marked the end to a nearly two-year period of highly conservative lending by the financial institution in response to a weak statewide economy.

Executives at First Hawaiian Bank, Hawaii’s largest bank in terms of deposits and loan volume, say they have the capacity to expand in all areas.

“We’re very liquid so we want to lend more,” said Bob Harrison, who will officially become the bank’s CEO Sunday.

Harrison said the bank is a top lender in consumer, automobile and small-business loans and would like to lend more in all areas, including mortgages and home equity.

“The challenge for us has been the economy,” he said.

Officials at Bank of Hawaii, the state’s second-largest bank, said they also are ready to expand. Peter Ho, chairman, president and CEO, said commercial loans are outpacing consumer loans, which he expects to continue into 2012.

“We are poised to see growth in just about every lending area in the company, which will be somewhat of a first in quite some time,” Ho said.

Richard Wacker, president and CEO of American Savings Bank, is optimistic but acknowledges that challenges to lending remain.

“Loan demand will be spotty in certain areas until business owners regain confidence,” said Wacker, who predicts that mortgage loans will be softer because refinancing will be down.

On Dec. 16, American Savings Bank opened a 2,270-square-foot stand-alone branch next to the new 65,000-square-foot Safeway on South Beretania Street.

And Central Pacific Bank plans to open a branch in Ewa in 2012 in response to booming population growth there, but has not disclosed specifics.

The bank posted three consecutive profitable quarters in 2011, which executives attribute to improvement in its credit risk profile and an overall reduction in nonperforming assets.

Central Pacific President and CEO John Dean expects loan demand to be soft throughout 2012 but improved over 2011.

“If our economy remains on track with modest recovery,” he said, “increased business activity and real estate values may help to support growth in small-business loans, residential mortgages, and home equity loans.”

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