Anderson Brothers Bank, which operates 23 branches in South Carolina, is on track to increase auto loan originations 22.5% this year and as much as 20% in 2019, according to Micky Watts, the bank’s senior vice president of indirect lending.
The bank specializes in subprime and near-prime loans. While larger banks in North and South Carolina have pulled out of the near-prime market in North and South Carolina, Watts said, Anderson filled the void. Watts says many big banks, expecting an economic slowdown, will continue to avoid the subprime market.
“Everything is cyclical in this business. If you listen to the economists, it’s time for an adjustment or a pullback,” said Watts. “When the large national banks in the prime space pull out of our non-prime space, we expect to grow.”
Watts says the bank originated $41.6 million in auto loans last year and will originate $51 million in auto loans this year. He also did not give specifics about the underwriting model at the bank but noted that Anderson has a higher risk appetite than most big banks.
“Prime lenders can occupy this space and see yield,” he said, “but when things go bad and charge-offs go up and they start losing yield, they’re uncomfortable in this space.”
