
{"id":4838,"date":"2009-02-12T09:37:39","date_gmt":"2009-02-12T17:37:39","guid":{"rendered":"http:\/\/www.carrborocitizen.com\/main\/?p=4838"},"modified":"2009-08-07T07:13:00","modified_gmt":"2009-08-07T15:13:00","slug":"harrington-navigates-recession-sees-mortgage-lending-increase","status":"publish","type":"post","link":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/2009\/02\/12\/harrington-navigates-recession-sees-mortgage-lending-increase\/","title":{"rendered":"Harrington navigates recession, sees mortgage lending increase"},"content":{"rendered":"<p><em><strong>By Margot C. Lester<br \/>\nStaff Writer<\/strong><\/em><\/p>\n<p>Chapel Hill  \u00e2\u20ac\u201d With banks still sputtering after last year\u00e2\u20ac\u2122s huge federal bail-out \u00e2\u20ac\u201c including three bank failures already this year \u00e2\u20ac\u201c it would be easy to think that all financial institutions are on the ropes. But one local lender is beating the odds with high reserves and a new branch on the way. To get the scoop, <em>The Citizen<\/em> spoke with Larry Loeser, president and CEO of Chapel Hill-based Harrington Bank, recently named 2008 Large Business of the Year by the Chapel Hill-Carrboro Chamber of Commerce.<\/p>\n<p>Q: You\u00e2\u20ac\u2122re on the record as saying the bank is healthy and lending. How are you able to do that when so many others are being more guarded?<\/p>\n<p>A: Part of it is we\u00e2\u20ac\u2122re in a great community. Chapel Hill-Carrboro is unique. I don\u00e2\u20ac\u2122t expect we\u00e2\u20ac\u2122ll have any problems here because it\u00e2\u20ac\u2122s such an economically strong and pretty diverse, economically speaking, community. The university and hospital provide strong anchors for employees and the school system is a major contributor to the economic strength of the community. We will have problems \u00e2\u20ac\u201c there\u00e2\u20ac\u2122s no way we can be immune in an historic recession, but we won\u00e2\u20ac\u2122t see them as much. <!--more--><\/p>\n<p>Q: You\u00e2\u20ac\u2122ve mentioned expanding into Cary. Is that still happening and if so, when?<\/p>\n<p>A: Yes; at Hwy. 55 at High House Rd. But it\u00e2\u20ac\u2122s gone slower than we would have liked because of zoning approvals. But we\u00e2\u20ac\u2122re working with a developer partner who\u00e2\u20ac\u2122s going as fast as they can. We could probably get that branch open early in 2010. That timing is fine with us since we opened two last year. We\u00e2\u20ac\u2122re using the extra time to stabilize those new branches at MLK Boulevard. in Chapel Hill, and in north Raleigh in Falls River Towne Center, north of 540.<\/p>\n<p>Q: Has your mortgage business slowed with the economy?<\/p>\n<p>A: No. In our mortgage activity, we\u00e2\u20ac\u2122ve seen a huge uptick because of declining rates. We\u00e2\u20ac\u2122re busier than we\u00e2\u20ac\u2122ve ever been, with 30-year mortgages under 5 percent. <\/p>\n<p>Q: How many foreclosures did the bank have in 2007 and 2008?<\/p>\n<p>A: We\u00e2\u20ac\u2122re in the secondary market and never participated in subprime mortgages of any sort. Our mortgages are to good, solid borrowers. Foreclosures have not been an issue and won\u00e2\u20ac\u2122t be for us.<\/p>\n<p>Q: What\u00e2\u20ac\u2122s your loan-loss reserve?<\/p>\n<p>A: All banks have a loan-loss reserve. We started from scratch and are fairly new, so we reserve very heavily since we don\u00e2\u20ac\u2122t have any loss experience to base on. We\u00e2\u20ac\u2122re conservative. Our loss reserve by industry standards is extremely high \u00e2\u20ac\u201c 1.65 percent of total loans. Any losses we have, we\u00e2\u20ac\u2122re well reserved for. Historically, we have very few losses.<\/p>\n<p>Q: Last month, BB&#038;T announced decreased profits attributed to defaults by homebuilders and developers. How is Harrington faring?<\/p>\n<p>A: We do lend to homebuilders and have some who are \u00e2\u20ac\u0153on the ropes\u00e2\u20ac\u009d because home sales have been slow for a good year and a half. Builders\u00e2\u20ac\u2122 basic business model is to build and sell in a short time. They\u00e2\u20ac\u2122re not capitalized to hold onto homes for a year or more. We are financing new home construction \u00e2\u20ac\u201c that even surprised me a little bit. There are homes selling out there. The press doesn\u00e2\u20ac\u2122t pick that up because it\u00e2\u20ac\u2122s hard to find. There\u00e2\u20ac\u2122s a small number of builders who were working on selling down inventory last year and are now down to a point where they can have product out of the ground to meet lower demand for the spring selling season.<\/p>\n<p>Q: What percentage of assets are construction loans?<\/p>\n<p>A: It\u00e2\u20ac\u2122s about 10 to 20 percent. <\/p>\n<p>Q: What kind of businesses are seeking loans and are they getting them?<\/p>\n<p>A: Loan demand is down because of the uncertain nature of the economy. We\u00e2\u20ac\u2122re still having new loan requests and making loans, but requests are not at the rate they were last year before the fourth quarter. It seems to be about the same mix of businesses. We\u00e2\u20ac\u2122re doing a restaurant loan, a commercial building \u00e2\u20ac\u201c so it\u00e2\u20ac\u2122s not completely the end of the world. It may seem like it\u00e2\u20ac\u2122s close to it. But if you have faith in the free-market economy, you know things will come back around. <\/p>\n<p>Q: There are several initiatives in the community for buying local. As CEO of a local bank, what\u00e2\u20ac\u2122s your definition of local?<\/p>\n<p>A: For us, we focus mainly on Chapel Hill-Carrboro when we say local. I have a sticker on the sidelight to my office that says \u00e2\u20ac\u0153Buy Local.\u00e2\u20ac\u009d We\u00e2\u20ac\u2122re on that train \u00e2\u20ac\u201c from the owner on down through the board of directors and employees. We can do that better than large competitors can. We would extend into Durham and Chatham counties and parts of Wake County, but we\u00e2\u20ac\u2122re primarily here. We were founded here and our primary shareholder lives in Chapel Hill. It makes the economy stronger and builds infrastructure. That ultimately makes it a better place to live. We thoroughly enjoy being located in the Chapel Hill-Carrboro community. It\u00e2\u20ac\u2122s a perfect fit for us and our style of banking. We\u00e2\u20ac\u2122re strongly service oriented and dependent on the trust and knowledge of the community. We like to grow our business by referrals. This is a great place for all that. <\/p>\n<p>Q: Do you have any advice for folks who\u00e2\u20ac\u2122re worried about the economy?<\/p>\n<p>A: The economy is cyclical. If you\u00e2\u20ac\u2122ve been around for a while, you\u00e2\u20ac\u2122ve seen the ups and downs of the economy, you know the ups won\u00e2\u20ac\u2122t last forever and neither will the downs. You try to be a little bit conservative in the up and the down times. <\/p>\n<p>Have some reserve cash or credit for the down times. You don\u00e2\u20ac\u2122t want to get fully invested in higher-risk investments when markets are going up. Hopefully, most people have those reserves and the ability to cut expenses when the economy is down. We saw an increase in savings accounts at the end of summer, beginning of fall when the economic news started to get bad. We feel the economy will start back up this year and continue on from there. In the first quarter, there will be lots of bad news out there. I don\u00e2\u20ac\u2122t think there\u00e2\u20ac\u2122s a need for anybody to get too concerned.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Margot C. Lester Staff Writer Chapel Hill \u00e2\u20ac\u201d With banks still sputtering after last year\u00e2\u20ac\u2122s huge federal bail-out \u00e2\u20ac\u201c including three bank failures already this year \u00e2\u20ac\u201c it would be easy to think that all financial institutions are on the ropes. But one local lender is beating the odds with high reserves and a&#8230;<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[275],"tags":[281,324],"class_list":["post-4838","post","type-post","status-publish","format-standard","hentry","category-business-economy","tag-economy","tag-harrington-bank"],"_links":{"self":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts\/4838","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/comments?post=4838"}],"version-history":[{"count":2,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts\/4838\/revisions"}],"predecessor-version":[{"id":6663,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts\/4838\/revisions\/6663"}],"wp:attachment":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/media?parent=4838"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/categories?post=4838"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/tags?post=4838"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}