Independent Banker - July 2017 - 26

COMMERCIAL
Laser focus on
SBA lending
Seacoast Commerce Bank's SBA
lending specialization has brought a
deep knowledge of its markets, says
president and CEO Richard Sanborn.
S
an Diego-based Seacoast Commerce Bank has found
success through specialization. " We are a unique
institution in that we are a mono-line specialty
lender, " says Richard M. Sanborn, president and CEO.
" The only thing we do is SBA fi nancing for the purposes
of buying or building real estate for owner-occupied users
under the SBA program. "
Seacoast entered SBA lending in late 2009 after working
to save the bank from failing. It selected that specifi c program
after realizing that SBA lending offered two distinct
advantages that the bank needed.
" First, we could originate a lot of loans and sell the
guaranteed portion in order to produce more fee income, "
Sanborn says. " Second, we could do this without having
a lot of growth. Coming out of a crisis and having limited
capital, no growth and a lot of fee income was a great combination
for us. "
The bank also realized that carving out a niche held
a special appeal. " There have been some studies by the
Conference of State Bank Supervisors and the Federal
Reserve System reporting that banks which had a specialization
through the crisis
tended to fare better, "
says Sanborn. " One
reason is that when
you specialize, you are
more aware of what is
going on in your marketplace,
and you have
a better understanding
of your products and
your borrowers. "
While the bank
Seacoast
Commerce Bank
Based: San Diego, Calif.
Commercial loans to
total assets: 73.25%
Assets: $585 million
Rank in category: First
opted to sell as much of the guaranteed portion of its loans
as possible in the early days, its long-term goal was to
gradually build a sustainable bank. As a result, in 2012, it
switched from selling 100 percent of the guaranteed portion
of its loans to holding as much as it could.
" There are tremendous fi nancial benefi ts to SBA loans if
you hold them rather than sell them, " Sanborn says. " This
is when our growth really started to take off. " The bank
26 ICBA IndependentBanker July 2017
" When you specialize, you are
more aware of what is going on
in your marketplace, and you
have a better understanding
of your products and your
borrowers. "
-RICHARD M. SANBORN,
SEACOAST COMMERCE BANK
was able to grow from about $150 million in assets in 2011
to $585 million today. " While our loan production is only
up modestly each year, our outstandings have been growing
substantially, because we are selling fewer and fewer
loans, " says Sanborn.
Challenges in the future? Sanborn doesn't anticipate
many. " The biggest challenge for any bank operating
under a government program is whether the government
is going to continue to support that program, " he says.
" Fortunately for us, the SBA program is a great jobs
creator. Whether you are on the left, the right or in the
middle, everyone supports the idea of creating more jobs
and growing the economy, so there is wide bipartisan
support for this program. "
-William Atkinson
Independent Banker - July 2017

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