Page 64 - BusinessWest October 12, 2020

Allen Miles says some loan customers are doing well, while others, particularly in hospitality, continue to
struggle.
Starts and Stops
That’s true in the Berkshires as well, Leach said, and restaurants in par- ticular are worried about the onset of cold weather and an inability to seat more customers, due to both the state’s indoor-capacity restrictions and the reluctance among some patrons to eat inside restaurants right now.
But the region’s hospitality busi- nesses have benefited in others ways during the pandemic; in fact, one bed- and-breakfast he spoke with did record business this summer.
“People left urban areas for a safer place, whether for weekends or longer,”
he said, adding that some secondary homes became primary homes, while other people bought first homes in an area they felt was safer than, say, New York City. “Interest rates are obviously really low, but there’s also the fear fac- tor of ‘wait, I’ve got to get out of this urban area.’ So there’s been a huge sense of urgency to buy in an area like the Berkshires.”
Unlike some lending institutions, Westfield Bank has seen healthy activ- ity in loan originations recently, Miles said.
“The deferments and PPP money actually made some people stron-
ger because it’s been cash preserva- tion instead of cash burn,” he noted. “Usually for commercial lending, it starts getting busy after Labor Day. We weren’t sure if we were going to see that cycle again, but now it’s quite busy, and people are active. So that’s a really good sign.”
That activity is strong across the board, particularly in commercial
real estate, where customers are refi- nancing for a lower rate or selling,
he explained. “It’s a great time to sell — low interest rates, lower cap rates, people are going to pay you more for the property — so you’re seeing a lot of transactions going on right now.”
“The deferments and PPP money actually made some people stronger because
it’s been cash preservation instead of cash burn.”
Commercial and industrial (C&I) loans are healthy as well, he said, add- ing, of course, that, “with anything related to hospitality or travel, the jury’s still out on that. The longer this [pandemic] hangs over us, the longer the recovery for them.”
At PeoplesBank, Oleksak said, many customers have been accumulating cash and paying down lines of credit, or shopping around to lock in better long-term rates on loans, which is a challenge for banks already facing flat- tened yield curves. “I think the depth of the crisis is a little bit masked by
the amount of stimulus money in the market,fromPPP,SBAprograms,and deferments.
“Some individuals out there are suf- fering mightily, particularly restaurants and hospitality,” he added. “The other great unknown is, we don’t have a vac- cine yet. Are we going to see another spike? People are trying to get back to normal here, but I’m not sure what the new normal is going to look like.”
He pointed to his own institution
Lending
Continued on page 29
Announcing our new Monson Savings Bank
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OCTOBER 12, 2020
BANKING & FINANCIAL SERVICES
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