Interview: Harry Stone, President CEO, Cooperative Business Assistance Corporation (CBAC)

and August 2019 alone, five banks in the state reached a purchase agreement, including Stewardship Financial, Two River Bancorp, Bancorp of New Jersey and Oritani Financial. Within that time period, only Illinois and Texas ranked higher, with nine and eight mergers, respectively. In aggregate, New Jersey reported a total 18 bank acquisitions between 2019 and July 3, 2021, showcasing an ongoing healthy appetite for acquisition even in the midst of the pandemic.

On the deposits front, New Jersey’s financial fabric outperformed 2019, even with fewer institutions. In June 2019, the Garden State counted 58 New Jerseychartered banks and 13 federally-chartered banks. In aggregate, New Jersey-based banks held $14 billion in deposits outside of the New Jersey market and $106 billion within the New Jersey market. In June 2020, the state counted 52 chartered banks and 11 federallychartered banks. Outside the New Jersey market, these financial entities held $17.7 billion while inside the Garden State market they held $119 million.

The consumer lending environment was perked up by federal aid programs and funding, which are only now starting to run scarce, with the SBA reporting only $66 billion remained nationwide from its $292 billion portion of the $1.9 trillion American Rescue Plan in May 2021. Harry Stone

President & CEO Cooperative Business Assistance Corporation (CBAC)

What is CBAC’s purpose within the South Jersey community?

The primary purpose of CBAC is to provide financing to small businesses in addition to providing technical assistance. We make commercial loans to businesses only. We provide as little as $1,000 and up to about $250,000. CBAC offers the Community Development Financial Institution (CDFI) advantage, under the U.S. Treasury Department. As a result of that, we are also an SBA microloan lender. Our mission is to provide financing to those communities, businesses and individuals that are not able to get credit elsewhere and at reasonable interest rates as well. As a nonprofit CDFI, we’re able to spend more time with our customers, assisting them. Our other real asset is that we partner extensively with commercial banks and economic development offices throughout South Jersey and Philadelphia

How does loan demand through CBAC compare to pre-pandemic level?

Our lending volume doubled during the past year because small businesses needed working capital, specifically for two reasons. First, if their cash flow was strained because of decreased revenue, increased expenses, such as PPE equipment purchases, or business reinvention expenditures, such as outdoor seating for eateries. Second, certain businesses have skyrocketed as a result of the pandemic, with certain industries that have been busier than ever. They also need working capital to sustain their growth because they are adding employees, products and revenues.

What is your outlook on loan activity toward 2022?

With all the resources coming into businesses through loans and financial aid programs, which for CBAC represented double the volume it historically deals with on a yearly basis, a lot has been done in the last 12 months and we do not know yet where that is going to balance out. Inflationary pressures are looming and labor issues have emerged. It’s too early to project one way or the other what the demand is going to be.

Cherry Hill’s TD Bank has set up a $105 million equity fund directed at minority-owned businesses

In a further effort to assist small businesses, in particular, minority-owned businesses, Garden State banks are deploying financial instruments to complement governmental aid. Cherry Hill’s TD Bank is leading the charge with a $105 million equity fund directed at minority-owned small businesses. M&T Bank injected $75,000 into Rutgers University’s Center for Urban Entrepreneurship and Economic Development (CUEED), dedicated to Black-owned High-Impact Vital Enterprises, which are retail and service businesses critical to the viability of their communities. Bank of America also made a commitment to invest $1.25 billion over five years to bolster racial equality and economic opportunities within the state’s minority populations, including an equity investment to New Jersey’s “40 Acres and a Mule” (FAM) fund.

Top banks New Jersey is home to a strong concentration of relevant players in the banking and finance landscape, whose relevance is felt not only across the state but also at the national level. Pre-pandemic, community bank Lakeland Bank was the only Garden State lender to make it to the S&P Global Market Intelligence annual ranking of 2019’s best performing banks. More recently, five New Jersey community banks made the list of American Banker’s 2020 Top 200 Publicly Traded Community Banks: Unity Bancorp (15th); Parke Bancorp (16th); Marlin Business Services (26th); 1st Colonial Bancorp (128th); and First Commerce Bank (161st).

Moreover, PNC Financial Services Group unlocked a coast-to-coast footprint with the $11.6 billion purchase of BBVA USA. The transaction made PNC the fifth-largest commercial banking organization in the United States, with more than $560 billion in assets and a presence in 29 of the country’s Top 30 largest markets.

And proving that bricks and mortar still has life despite the digital onslaught emerging from the pandemic, South Jersey’s 1st Colonial, based in Camden and Gloucester counties, expanded its footprint into the Philadelphia market with a retail branch in Limerick. “While several of our competitors are closing branches, we just opened a branch in Pennsylvania. Our goal is to attract customers who want the ability to transact on their terms, how and when they want to. We don’t want to be positioned as digital-only or mobile-only. We still think that there is value in bricks and mortar, maintaining a branch light strategy,” said Robert White, president and CEO of 1st Colonial Community Bank, in an interview with Invest:.

CARES Act and PPP loans As of Feb. 1, 2021, 20,559 PPP loans had been issued ( )