BB&T exec answers swirling rumors amid market disruption

We report on what we know. And what we know right now is that Lancaster County — and much of Central Pennsylvania — is a banking battleground.

We know this because banks have announced in droves they’re entering the Lancaster County market and they keep using the same two words to tell us why:

Market disruption.

(NOTE: If you’re here for the survey results, scroll down to the bottom. No, wait! Read this first, then get to the results. Seriously, read it.)

The market disruption everyone keeps talking about comes from the exit of banks with a history in the county — Susquehanna and Metro, especially — and banks that had virtually no presence in the county previously moving in.

That’s what we know. But what we don’t see is where the new banks — and the established ones, for that matter — have dispatched their sales professionals to pick up whatever business could be in play. One of the banks taking the most heat is also the bank that has made the biggest splash in the region, North Carolina-based BB&T.

When BB&T acquired both Susquehanna and National Penn in under a year — the final conversion of National Penn to BB&T happens in less than two weeks — it became the bank with the largest deposit share in the midstate. And with that title came a target on its back as an easily vilified behemoth.

And with that target came the rumors. Sooner or later, those rumors get back to BB&T executives like BB&T Central Pennsylvania Region President Craig Kauffman, a 30-year banker who came to BB&T from his post as CEO of Susquehanna’s Central Pennsylvania Region.

“It’s just mind-boggling at times,” Kauffman said of the rumors he’s heard being slung about BB&T. “Our focus is on our clients, and we endeavor to do everything we can for them.”

Kauffman took some time recently to discuss circulating rumors about what BB&T is and isn’t doing:

RUMOR: BB&T is out of agricultural lending.

REBUTTAL: “It’s the one that gets me the most,” Kauffman said.

Nearly every time a new bank has announced it’s coming to Lancaster County in the last few months, they point to ag lending as an opportunity being created because of the market disruption. Read: BB&T doesn’t care about ag lending.

“We’re the largest ag lender in the state,” Kauffman said. “And not just in our market (of Central Pennsylvania), but in the Lehigh Valley and Chester County, too. It’s just not true.”

RUMOR: BB&T isn’t wired into the Amish community.

REBUTTAL: It goes along with ag lending locally since significant amounts of Lancaster County ag lending is dedicated to lending to the Amish community.

“To the people that believe that, I say come in and sit at any of our branches, and see the number of Amish people who come in,” Kauffman said. “We’ve done, and still do, a lot of business in that space and we’re proud of that.”

RUMOR: BB&T isn’t interested in any commercial loan less than $2 million.

REBUTTAL: It’s been out there, and with good reason. Susquehanna normally had a high volume of Small Business Administration loans, but BB&T, according to SBA records, didn’t make one traditional 7a SBA loan in from October to March (the first half of the SBA’s fiscal year) in Central Pennsylvania. Small-business lending is another item banks entering the market are touting as an opportunity. Susquehanna’s longtime SBA whiz Lynn G. Ozer moved to former Susquehanna rival Fulton Bank after BB&T took over.

But Kauffman said BB&T uses a different model for small-business lending than Susquehanna did, and that the bank’s average loan size is under $2 million. He also said the bank “just had its single best month of small business lending.”

It’s a new banking world in Lancaster County, something longtime bankers like Kauffman are still wrapping their heads around. But through the changes, he is confident BB&T will be one of the banks left standing.

“It’s been a phenomenal series of events watching it unfold. I’d say call me in 18 months and we’ll see what it looks like then,” Kauffman said. “I think what’s a little interesting is the response from competitors making accusations and portrayals. There’s a lot at stake, and a lot of banks are making huge bets that we’ll see how they work over time. BB&T has been around for 140-plus years, and the bank takes the long-term view. I really like our position, and the value proposition we bring. And I still see a lot of BB&T signs out there.”

Poll results

Here are the results from last week’s survey for the question: “What should the asset benchmark be for banks to be relieved from aspects of the Dodd-Frank Act?”

$250 billion
$100 billion
$50 billion
$10 billion
$5 billion
Something else
Keep it as is, there shouldn’t be any changes
Eliminate Dodd-Frank altogether
Total 42

Michael Sadowski

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