In order to understand where your institution fits in the competitive commercial lending marketplace, peer analysis and the periodic measurement of industry trends is a must.

As we consider it one of Cobblestone’s primary missions to help financial institutions remain informed, we did some number-crunching on your behalf to determine annualized commercial lending trends up to Q2 2017. The information presented below is the collective measurement of banks with headquarters chartered within the state of Massachusetts.

Average Year-Over-Year Commercial Portfolio Growth by Collateral/Lending Type

According to the Call Report data of Massachusetts Banks, average growth in construction portfolios led the way with an average rate of growth of 26.6%. C&I portfolios (i.e. those secured by a lien on business assets) were next with an average growth rate of 22.7%, followed closely behind by multifamily portfolios at 19.8%. See the chart below for further details:

Chart I:

Average Year over Year Growth

Average Year-Over-Year Commercial Portfolio Growth of Banks That Grew

Of course, not all Massachusetts Banks grew in those respective commercial portfolio components between the dates of June 30, 2016 to June 30, 2017 (although those institutions that did grow doubled those that did not grow, on average).  Those that did grow, however, grew their portfolio buckets by quite a lot in that one-year period, on average. The chart below provides some percentages for your review:

Chart II:

Banks that grew Growth Percentage

Growth on a Net Basis

Perhaps the most meaningful analysis is what level of lending activity took place by these 120+ Massachusetts banks on a net basis. The chart below measures the actual lending activity by dollar, broken out by commercial lending type. This is the net figure of collective lending dollar growth offset in part by collective dollar reduction of those respective portfolios. The results may not be what you would expect.

Chart III:

MA Loan growth percentage