PITTSFIELD – You need a loan and the Pittsfield Cooperative Bank has $ 50 million to lend.
Whether you are looking to refinance or buy your first home, or expand, start or solidify your business in the wake of the pandemic, a loan is just a quick conversation and some paperwork, says the bank’s president and chief executive officer, J. Jay Anderson.
Anderson says his local bank is overflowing with cash, like most financial institutions that are protecting government-funded stimulus checks and loans linked to the pandemic.
âOne of the problems we have right now is that the industry is inundated with cash. We have $ 33 million in cash overnight, in cash that we put in an account with the Federal Reserve Bank of Boston, and that earns very little interest, âAnderson says. âI maintain that much of the PPP (Payroll Protection Plan) money has not left the banking system. We have to find a way to open it. “
Anderson says that this money is better suited to be used today by the people and businesses that need it.
The Eagle recently spoke with Anderson about the state of the lending market, in this first of three sponsored articles that will also take a close look at the residential and commercial lending markets as they stand, according to Pittsfield Cooperative Bank.
Q: How are Payroll Protection Program loans managed by Pittsfield Cooperative Bank?
J. Jay Anderson: The Small Business Administration oversees PPP loans. It is bank money that is set aside for the companies to which we give; it is not the government’s money. What the SBA says is, “We’re going to promise that if you do A, B, C, we’ll pay that money back to the bank and forgive the customer for that obligation.”
Q: Apart from PPP loans, do you also need other loan seekers?
JA: You have it. We have to make loans. We are sitting down with about $ 50 million that we would like to lend to the Berkshires.
Q: Who are the ideal recipients?
JA: Anyone who grows up and needs capital. If you want to develop your business, there are many needs. You could have larger accounts receivable, which creates a need for financing. Just because you make a sale that day doesn’t mean you are raising money that day. The more sales you make, the more money you have to carry. If you are growing, looking for equipment or vehicles, there are a variety of asset classes that banks are good at funding.
Q: What is the range of amounts that you can lend for an individual or a business?
JA: We have a comfort level of about $ 5 million for a loan that we would do. It covers around 92% of businesses in Berkshire.
Q: What do you think of the look of interest rates for interested people or businesses?
JA: It’s always a great time to borrow money. People get caught relative to historical averages, but we’re generally below where they’ve been. However, they have increased slightly over the past 100 days. Residential mortgage rates have gone up; commercial borrowing rates have increased. I think the stimulus has pushed rates up a bit. Experts fear this may lead to some inflation. 10-year cash flow, for example, has fallen from 0.90 to 1.7 in the past three months. If you look at it as a percentage, it’s almost double.
Q: One year after the outbreak of the pandemic, do you see a lot of people leaving urban centers, looking for mortgages and settling in the Berkshires?
JA: On the residential side, we are clearly seeing an increase in the number of people coming from the city, especially in South County, and buying fairly large real estate in our community. Sitting on a few area councils, I also know that this has happened in Maine, north of Boston, New Hampshire, Vermont. All of New England has directly benefited, and I’m not sure we’re going to see that slowdown. I think what’s different between 2021 and 2001 is that the technology has evolved to such an extent that people can really work in the Berkshires and maybe go to town once a week. I think it will be a trend. People are starting to understand the quality of life we ââare blessed with.
On the business side, the folks I spoke to have been very busy, once they got through the downturn of last March, especially in the home improvement areas. I think the car sales have been good. Business in general from June 2020 to today has been very strong. I really like what I see, especially a lot of young people with fantastic ideas, who are really smart and want to live here.
Q: What is the volume of residential loans compared to previous years?
JA: 2020 was the most mortgages we have issued in the history of the bank. I wouldn’t be surprised if the other institutions said the same thing. Between the people who come to the area and those who refinance because the rates were so low, it has exploded. We see the effects in Pittsfield, Dalton, Lanesborough. We are seeing homes coming onto the market and selling quickly for above asking price, in amounts we have never seen before. Strike wood, hope this continues. But I think it bodes very well from a banking perspective, from a tax perspective, and across the community.
Q: And you can serve all of Berkshire County? What about neighboring counties in neighboring states?
JA: We have been able to help clients in Northwest Connecticut and border communities in New York. We are not required by our charter to remain in the county of Berkshire. We go wherever people need us.
Q: From a business perspective, have your customers been hit hard by the pandemic or do they appear to have survived the storm?
JA: We have had difficult times for some of our business customers. Anyone associated with the hospitality industry, restaurants, bars, entertainment, cultural venues, they count on being open in season. We have certainly touched them all.
We made the decision early on to help our customers because it is something that no one expected. We put a very large portion of our commercial and residential loan portfolio on a backlog very early on. As you can guess, it’s painful for us because we don’t generate interest. But at the time, it didn’t really matter. We were in good enough financial shape to be able to weather the storm on our end, and we had to share that with customers. We offered them a 90-day principal and interest deferral. We did it again at the start of this year. Our customers have been extremely grateful, understanding what we have done.
Q: For customers who have problems with these claims or deferrals, would you say the bank is still working with them to keep them solvent?
JA: Absolutely. We go through our overdue loan accounts one by one to make sure we understand the circumstances of each case. I’m sure there will be casualties along the way, but I think we do a good job of understanding the client, the issues they are having and then their ability to come out of their issue. I think that’s what distinguishes a community bank from a large regional bank.
Q: On that note, what do you see as your role in the community?
JA: All the presidents of the local banks, we are working together on some things, we have collaborated to have a bigger impact in the community, so I know they feel the same as me. We have always said, “This is how we behave and how we act.” Our foreclosures on residential homes are considerably lower than those of other organizations, especially larger and larger institutions. Our arrears, repossessions are extremely low. We know that. The pandemic was an opportunity for us to really show it. Lucky for us, to be led by a board of directors that has the same vision, it was our time to show what we can do and start showing how different we are from other institutions. I am very proud of the way the staff performed as they did during a pandemic, and we have always been able to do what is most important, which is to take care of our customers. I think it is our duty.