Bryn Mawr Bank Corp. has sold all of its Paycheck Protection Program loans valued at over $300 million to The Loan Source, writes Jeff Blumenthal for the Philadelphia Business Journal.
The third-party lender will now service the 1,850 loans that were previously handled by the bank.
The bank did not disclose its gain on the sale, but analyst Casey Orr Whitman of Piper Sandler estimates it to be around 1.5 percent.
The deal will free up Bryn Mawr Trust staff to focus on other commercial lending efforts as well as eliminate operational risk, according to CEO Frank Leto.
Leto emphasized that the bank is not a regular Small Business Administration lender. Last year, it only handled 16 SBA loans.
However, it felt an obligation to help its small business customers during the coronavirus outbreak. Now, the bank wants to shift its focus back to its usual priorities.
“We just felt this was too much of an operational risk for us to try and handle these loans,” said Leto. “You have to develop the technology to service the forgiveness component. We could not handle 1,850 loans manually.”
Read more about Bryn Mawr Bank at the Philadelphia Business Journal by clicking here.
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