Chattanooga: Bankers tout cash, ability to lend

Chattanooga-area banks continue to be flush with cash and have plenty of money to lend, local bankers say, though that money may come with a higher cost for businesses and consumers seeking to borrow.

“When you look at how the credit crisis affects individual businesses, the answer is, it all depends,” said Bruce Adams, executive vice president of First Tennessee Bank.

Executives representing banks from across the region brought their combined experience of more than 150 years to take part in a panel discussion on the impact of the credit crisis on Chattanooga-area businesses. The event was held during a meeting of the Chattanooga Area Chamber of Commerce Downtown Council at the Sheraton Read House Thursday.

The executives, representing First Tennessee Bank, CapitalMark Bank & Trust, Cohutta Banking Co., First Volunteer Bank, FSGBank and Northwest Georgia Bank, all agreed that, despite reports to the contrary in the national media, banks here have plenty of money to lend.

“I think all the banks in the Chattanooga area generally have got money to lend and are in pretty good shape,” said Kenny Dyer, market executive for CapitalMark. “Good borrowers can still get loans.”

However, borrowers looking for money should have better credit ratings and expect to pay more for their loan, said Larry Richey, corporate lending officer for FSGBank. Tighter credit standards have impacted car sales, consumer loans and the housing and mortgage markets, he said.

“All of that sounds pretty bad, but there is a lot of good news here locally,” Mr. Richey said. “We have the luxury here in Chattanooga of not being a boom or bust type of town.”

While Chattanooga didn’t see the 20 percent to 30 percent appreciation in home prices that some other areas did in the last few years, which in retrospect is a good thing, Mr. Richey said.

“I think we’ve got a floor underneath us here in Chattanooga, and that’s the Volkswagen plant,” he said. “Because of the investment by Volkswagen and other suppliers here in Chattanooga, we are bullish on 2009 and 2010, and I think as an industry, we in Chattanooga have money to lend and none of these banks are in trouble by any stretch of the imagination.”