SBA Update

January 8, 2018



The year started off with strong activity in the SBA sector following the FOMC’s December rate increase.  Depository portfolio managers are adding floating-rate exposure in their investment portfolios as they added a healthy amount of fixed-rate exposure in their loan portfolios in 2017.  Depositories with limited loan growth continue to look to DCPCs for higher yields.  Loan activity finished the year strong in both 7(a) floating-rate loans and fixed-rate USDA government guaranteed loans; however, activity is expected to lessen as depositories focus on year-end administrative duties.

 

Floating-Rate 7(a) Pools

 

Fixed-Rate (DCPC and SBIC) Pools

 

 

Government Guaranteed Loan Trading

 

Portfolio managers continue to focus on future rate increases and look to mitigate interest rate risk exposure by adding variable-rate investments to their portfolios.  Depositories with limited loan growth continue to look to DCPC for higher yields.  Loan activity continues to be strong in both 7(a) floating-rate loans and fixed-rate USDA government guaranteed loans, however activity is expected to soften the next few weeks.


 

 

Greg Roll, CFA

Senior Vice President

Vining Sparks

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