BANKING
State‐of‐the‐Industry Report : Banking in the Garden State
Thanks to the PPP , $ 24.1 billion in loans were provided to businesses in New Jersey .
By Diane C . Walsh Contributing Editor
New Jersey banks emerged from the challenges of last year ’ s pandemic as stronger , more resilient and innovative institutions , ready to help the state rebuild its economy .
John E . McWeeney , Jr ., president and CEO of the New Jersey Bankers Association , said the 61 banks that are headquartered in the state ended 2020 with more than $ 20 billion in capital on hand — a 7 percent increase from the prior year . The federal Payroll Protection Program ( PPP ) and the stimulus checks resulted in “ deposits exploding ” to $ 143 billion — more than $ 17 billion greater than the previous year , he added .
Another key indicator of the banks ’ strength is the $ 136 billion in commercial loans outstanding , representing a $ 13 billion annual hike , the banking executive also noted .
“ The strong capital position , deposits and liquidity put us in a great position to help the economy ,” McWeeney said as he discussed his industry ’ s status with COMMERCE .
He commended Thomas J . Shara , president and CEO of Lakeland Bank , and Thomas J . Kemly , president and CEO of Columbia Bank , the respective chairman and immediate past chairman of the association , for their leadership throughout this tumultuous year . Shara and Kemly also serve on the board of directors of the Commerce and Industry Association of New Jersey . Their involvement with the two associations makes for easy collaboration .
26 COMMERCE www . commercemagnj . com
Bankers were classified as essential workers on the economic front during the pandemic . As such , McWeeney said , the foremost concern was to make certain all customers , businesses and consumers had access to their money to conduct their affairs . While many branch offices were forced to close , he said the banks expanded their drive‐up services , instituted banking by appointment and enhanced their digital banking services . Some of these innovations will continue post pandemic , especially the digital services , he said , adding that the pandemic probably accelerated many banks ’ conversion to digital by three to five years .
At the onset of the crisis , McWeeney said the banks realized it was critical to support both the consumer and commercial customers . Therefore , in discussion with the state Department of Banking and Insurance , a 90‐day forbearance program was put into effect for residential mortgage customers . The banks also reached out to their commercial customers and deferred payments on millions of dollars in loans . The extent of the pandemic triggered a second 90‐day deferral , but McWeeney said the banks are proud of their proactive support and most of the customers have come off of the deferrals .
The banking association members also had a pivotal role in the federal PPP loan program . Loan applications were made through local banks , and more than 248,000 businesses received loans from the unique program designed to help stores , factories , restaurants and every other sort of business keep their doors open and workers employed during the pandemic .
Banks enhanced their drive‐through services to help customers during the COVID‐19 crisis .
Photo : Getty Images / iStockphoto
The 61 banks that are headquartered in the state ended 2020 with more than $ 20 billion in capital on hand — a 7 percent increase from the prior year , according to New Jersey Bankers Association President and CEO John E . McWeeney , Jr .
McWeeney said $ 24.1 billion in loans were doled out in New Jersey and the average loan was $ 96,900 .
“ It was a herculean effort , especially in the first round ,” he said , recalling the technical problems that surfaced with the Small Business Administration , the federal agency designated to administer the program . “ Bankers worked 24 / 7 for weeks .”
In addition to the demands of processing the PPP loans , McWeeney said the volume of payments to consumers was also overwhelming when the federal stimulus funds were released . Yet , the banks met the increased demands , just as they also stepped up their philanthropic work . McWeeney said his members are always committed to community service . “ But in this case , bankers stepped up even more so ,” he said , noting that banks made donations to many nonprofits throughout the state , including providing personal protective equipment in some cases . The association ’ s foundation raised
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