For the first time in its 13-year history, Bank Rhode Island is atop the 2009 ranking of U.S. Small Business Administration lenders in Rhode Island. Mark Meiklejohn, the bank’s chief lending officer, explains BankRI’s surge in SBA lending.
PBN: This year, BankRI was named SBA’s top lender in Rhode Island with 105 loans worth $13.29 million. It’s the first time the bank was ranked No. 1. Explain why it happened.
MEIKLEJOHN: Business lending has always been a priority for us. In 2009, many of our larger competitors were distracted and focused internally. For the most part, we have been able to steer clear of these kinds of things and that has allowed us to really focus on day-to-day business. Also, with some banks pulling back on their lending it has led to opportunities for us, both in small business and large commercial. We’re seeing loans that we might not have seen a few years ago. Our business lending has been up in general and SBA lending is just one part of that.
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PBN: Why hasn’t BankRI appeared higher on previous SBA lists, considering that the bank has traditionally had more a business-banking orientation?
MEIKLEJOHN: We finished fourth in 2008, which was pretty good, but obviously we were very pleased to be at the top of the list this year. Over the past 12 to 18 months, we have strengthened our management team, added some feet on the street and improved our back-shop processes related to business lending. These things have helped with our performance. This year has been kind of unique. If you look at the SBA’s final numbers a lot of the smaller banks stepped up their lending while the bigger banks backed off.
PBN: What part did the American Recovery and Reinvestment Act play in the bank’s higher number of SBA loans and ranking?
MEIKLEJOHN: The ARRA led to the SBA increasing the guarantee on its 7(a) loans to 90 percent. While it’s good for lenders to have the extra security from the SBA, it wasn’t a huge factor in our business lending this year. We are continuing to make good loans to businesses who qualify based on our underwriting standards. The 90 percent hasn’t really changed this.
PBN: Was this a recognition that BankRI was shooting for? And was it a surprise that the bank’s 105 loans were nearly double the No. 2 bank Coastway, which made 56 SBA loans (although Coastway loaned $14.18 million, about $890,000 more than BankRI)?
MEIKLEJOHN: Topping the list was a goal for us. You mentioned our business-banking orientation and we saw this as a chance to validate that. It’s one thing for us to say we are focused on business lending, but it’s a lot more powerful when that message comes from the SBA. We had been following the SBA’s tracking throughout the year and over the summer we started to see that we had a very good chance at finishing first.
PBN: What is the pace of SBA lending this current year? On track to top the 105 loans, or have things slowed?
MEIKLEJOHN: It’s too early to tell. The SBA’s fiscal year ended Sept. 30. Traditionally, business lending slows down at this time of year. I think we’ll have a much better read on our situation once we get through the holidays.
