Fidelity Bancorp Funding Pulse On The Market: BREXIT

This is to address the many calls we’ve received lately asking about rates for commercial loans.

QUESTION:

Are the rates decreasing as a result of what we are seeing in the bond market?

RESPONSE:

In my opinion, those lenders who tie their rates to the bond market, you’ll find that those rates surely should have gone down or are going down as a direct result.

special note: We need to watch carefully as they may also increase their spreads like they have in the past.

The other Financial Institutions may drop their rates as well, but those rates, while generally tied into deposits as opposed to the bond market, they are also tied into supply and demand and how competitive they want to be.

Considerations that make it more subjective:

• their appetite for lending
• the specific asset and credit and location
• and their desire to be competitive in that space

Summary: So while many may expect these rates to go down, for many of our lenders that base their decisions on something more than the bond market, the rates may not go down and may in fact go up.

William Sonsma, President – Fidelity Bancorp Funding

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