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PNC Should Commit To Farm Lending

Adam Rust's picture

Posted August 10, 2011

If PNC wants to make a splash in North Carolina, it would do well to finding a way to turn around the record established by RBC when it comes to making loans to farmers. A good portion of eastern North Carolina's economy is driven by agriculture. It would not be a stretch to say that most of the money in the area is a product of farming.

Severn is a good example. Even though Severn only has about 1,000

people, it is home to one of the three roasting facilities for Hampton Farms. Hampton Farms is a producer of ultra high quality Virginia peanuts. Their peanuts are sold throughout the country. They make a good share of the peanuts that are sold by concessionaires at any major league baseball game. Severn, which is located in Northampton County, is not the only local roasting facility. Hampton Farms has another in Edenton (Chowan County) and then one in Missouri.

RBC and PNC: The Only Bank in Town

Adam Rust's picture

Posted July 29, 2011

A day of reckoning is coming for some communities in eastern North Carolina. With the planned sale of RBC Centura to PNC, the possibility exists that branches will close. In big cities like Raleigh, Charlotte, or Greensboro, the loss of a branch is a minor event. But in eastern North Carolina, the RBC branch is the only bank in town. If the people in Pittsburgh decide that one of their branches is redundant, then there will be no bank at all.

The FDIC says that RBC is the only bank in seven communities in North Carolina. Each is located in Northeastern North Carolina. In cities like Colerain or Rich Square, RBC is the only bank in town.  RBC was born in Eastern North Carolina and its continued involvement in the area probably reflects their long-term commitment to the area.

It isn't clear that PNC will share those same commitments. PNC may close branches. They might curb the extent to which they engage the small businesses in the area as well as the degree of commitment they make to community development lending. PNC hasn't spoken about the issue. My initial comment on this situation is available here.

If PNC closes the Rich Square branch, the nearest choice will be to take the country roads out of Northampton County and drive southeast to the Southern Bank & Trust in Aulander. The nearest RBC is back in Jackson, which is almost 20

The Big Banks Move to FHA

Adam Rust's picture

Posted November 15, 2010

The Big Banks have suddenly decided to move traditionally underserved borrowers into loans guaranteed by the Federal Housing Adminsitration (FHA).

For years, FHA lending made up only a small fraction of mortgage loans. One source quotes a Wells Fargo representative who says that FHA lending made up only three percent just a few years ago.

The main difference between FHA loans and conventional products is that there is a lower down payment requirement. FHA asks for a downpayment of at least 3.5 percent. Conventional loan terms fluctuate, but in the past year most borrowers have had to put up at least 20 percent in order to buy a home. For investors the number has been much higher.

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