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Talking Business: Chris Ferris discusses Fidelity Bank at 115 and its search for a partner


By: Stephanie Riegel | Staff Writer

Talking Business: Chris Ferris discusses Fidelity Bank at 115 and its search for a partner

Chris Ferris came to Fidelity Bank in 2014 and was named its president and CEO in 2018. In the years since, he has helped grow the 115-year-old institution — which, until 2013, was a savings and loan — beyond its bread-and-butter business of home loans into a full-service bank that specializes in servicing small business clients.

In this week’s Talking Business, Ferris discusses the pressure points his small-business customers are feeling and Fidelity’s search for a partner that could help it grow to the next level.  

Tell me about Fidelity’s recent history and where it is right now in terms of its evolution.

We celebrate our 115th year this year, but it wasn’t until 2013, when the bank bought NOLA Lending Group, that we started to diversify from being just a savings and loan that makes long-term fixed rate mortgages into one that could originate loans and sell them to investors on the secondary market. So that allowed us to really grow and helped kickstart the franchise.  

In 2014, we revamped our operations, introduced new retail lending and deposit products. In 2015, we moved into the small business base with products and processes designed for businesses with $1.5 million or less in revenues. Then, in 2018, we relaunched our commercial banking platform to include more of a consultative approach to banking, introduced a new loan platform, and brought in a couple of folks with experience that did a little more robust lending in the commercial space — not just commercial owner-occupied but commercial and industrial lending and equipment finance.

What was the catalyst for this change?

Some of it was timing. Some of it was us looking at our footprint as whole to say, what does the geography offer us? When we launched small business banking, it happened when some of our larger competitors were doing away with the traditional small business banking approach or driving it to the call centers in different cities or ignoring it altogether. That created an opportunity. Some of it was us looking to the markets and saying 92% of all the businesses in the ZIP codes we cover have less than $2 million in annual revenues. The opportunity for us is small business. We like to call it small commercial banking. From startup to $20 million. That’s our sweet spot.

It is challenging right now in the markets we serve. I know we will benefit from some of the investments being made in our industries. But it is slow, and it is hurting the local economy. To build a more sustainable, long-term economy we have got to diversify. We talk about investing in the basics. There are some things we could do to make it better for small businesses — things that are important to families — schools, crime. We can’t control hurricanes, but we can invest in things like mitigation. 

Where are the pressure points your clients are feeling?

Higher interest rates. If you’re a business owner right now, you’re probably not looking at ways to expand your business or grow through capital because borrowing is more expensive, so that is pumping the brakes on economic growth. Because of those costs, some of our clients are starting to reevaluate the economics of their projects. If they pulled down property or are looking to renovate or expand, well, the dynamics in pricing have changed in the past six months or year. Labor is more difficult, though it is improving. As a result, we have seen several clients that are putting their projects on hold. 

It is a bit a of a puzzle, but we do continue to have a shortage in housing, particularly affordable housing. I am a little concerned that you have a shortage of housing to meet the demand but with rising costs to own a home and high interest rates, you are pricing a lot of people out of the market. For many people, a home is their most valuable asset, and if that cost becomes more and more expensive, the value of that asset will probably come down. So that concerns me a little. You have a convergence all happening at once and it’s hard to predict.

Do you think we are in a recession?

Technically, we are. When you look at unemployment, it is still low but negative quarters of GDP are a pretty significant signal. I believe we are in one and we will probably see unemployment begin to tick up. So I do think, by definition, we are in a recession.

They have stabilized as of late. We were at 30-year fixed at 2.75% about a year ago to 6.5% today. We saw mortgage contracts being canceled because the rates were going up so dramatically. They have come down over the last 30 days. But when we have had 15 years of really, really easy monetary policy, super low interest rates, it’s a shock to the system.

Have you seen an uptick in foreclosures?

We have not seen a material increase in foreclosures. We have not seen a significant credit decline. Going into the pandemic, we, as a banking industry, were all very fearful. But we have been very fortunate. I think the consumer is healthier and the amount of stimulus that was pushed into the system and the moratorium on foreclosures and evictions absolutely helped, thankfully.  

Our three-year strategic plan included several growth strategies, and it’s everything from building de novo branches in new markets, filling in current markets, where we might have gaps, and then looking outside for a partner. As a mutual, we cannot be acquired. But we can acquire another institution. That makes sense as the cost to do what we do has continued to increase.

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