John Reosti

Some lenders are once again hiring mortgage lenders, but memories of the painful staffing cuts they were forced to make over the past two years remain top of mind.

The average size of a Small Business Administration 7(a) loan has fallen to just over $400,000, a level last reached in 2017, according to agency statistics.

The Minneapolis-based banking giant is enjoying its biggest year ever for 7(a) lending, with volume up 40%, as borrowers "are still coming to us," its SBA chief said.

The sale of the $318 million-asset portfolio comes five weeks after the Greenville, South Carolina-based company agreed to sell its investment advisory unit.

The agency admitted navigating the different rules and regulations involved in its four existing lines of credit proved time consuming and confusing and kept some lenders from offering them altogether.

In talks with OCC officials, "it became obvious that we would not gain near-term approval given their recent experience with multifamily and CRE positions," FirstSun CEO Neal Arnold says. The companies announced other revisions to their deal, too.

Cullen/Frost in Texas, BankUnited in Florida and Bank OZK in Arkansas are among the banks that have, at least for now, allayed investors' fears about their exposure to the CRE sector.

Since the end of the Small Business Administration's 2022 fiscal year, the average loan size in its flagship program has dropped more than six figures. The addition of three new nondepository lenders could further drive down this figure.

Washington Trust shares plunged after the Westerly, Rhode Island, company disclosed it booked an office deal in the third quarter, boosting the size of its portfolio while other lenders are pulling back.

With a week left in its 2023 fiscal year, the Small Business Administration has already approved 12% more 7(a) loans than last year. Larger banks were among the biggest gainers as a result, according to the agency's latest data.