Bank referral pres dec 10

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  1. Should you fake being a C&I lender?<br />An analysis of current C&I trends affecting community banks<br />FALL 2010<br /> 2. Credit…
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  • 1. Should you fake being a C&I lender?<br />An analysis of current C&I trends affecting community banks<br />FALL 2010<br />
  • 2. Credit Businesses Deserve<br />TREND #1 <br />The lending freeze is thawing.<br />Competition for market share among banks<br />Growth-based borrower demand<br />Federal reserve policy<br />Fee revenue drying up<br />Clean up efforts on bank balance sheets<br />and<br />Simply the passage of time combined with<br />adjustment to the new reality<br />www.ftrans.net<br />Ftrans | Community banking trends report | Fall 2010 <br />
  • 3. Credit Businesses Deserve<br />TREND #2 <br />Banks are cautiously re-entering with C&I<br />Over-reliance on CRE Lending<br />Increasing property values resulted in an overconfidence in risk/return of real estate assets. By 2005, 60% of bank loan portfolios were in CRE loans, up from 25% ten years earlier. <br />www.ftrans.net<br />Ftrans | Community banking trends report | Fall 2010<br />
  • 4. Credit Businesses Deserve<br />TREND #3 <br />There actually is pent-up loan demand that will expand rapidly<br />All borrowers<br />Bunker mentality: <br />Fear of unforeseen economic developments<br />Recession mentality: <br />Focus on cost cutting measures<br />Discouraged borrower mentality: <br />There’s no credit available, why bother<br />www.ftrans.net<br />Ftrans | Community banking trends report | Fall 2010<br />
  • 5. Credit Businesses Deserve<br />TREND #4: <br />Competition will be intense<br />“In this challenging economy, small and medium-sized businesses are vital to the nation’s ongoing recovery Without their help, creating new jobs will continue to be a challenge,” <br />David Darnell<br />President of Global Commercial Banking Bank of America.<br />www.ftrans.net<br />Ftrans | Community banking trends report | Fall 2010<br />
  • 6. Credit Businesses Deserve<br />TREND #4<br />Would-be borrowers will be seeking solutions to their cash flow woes – and <br />they will go somewhere.<br />Frustration: No Cash; No Grow<br />59% of respondents to a recent Federal Reserve survey applied for credit in 2009. Only 25% got the credit they sought. <br />www.ftrans.net<br />Ftrans | Community banking trends report | Fall 2010<br />
  • 7. Credit Businesses Deserve<br />TREND #5:<br />It’s hazardous to be a C&I lender if you don’t have the experience and tools to do it well.<br />Experience & Training<br />Account Management Tools & Systems<br />Profitability concerns<br />www.ftrans.net<br />Ftrans | Community banking trends report | Fall 2010<br />
  • 8. Credit Businesses Deserve<br />TREND #5:<br />It’s hazardous to be a C&I lender if you don’t have the experience and tools to do it well.<br />What does it take to join the C&I fray?<br />Must haves:<br /> Experienced underwriting<br /> Ongoing borrower monitoring<br /> Trained RMs<br /> Centralized monitoring<br /> Collateral management<br /> Cross-selling expertise<br />www.ftrans.net<br />Ftrans | Community banking trends report | Fall 2010<br />
  • 9. Credit Businesses Deserve<br />CONCLUSION:<br />Set up a best practices C&I shop <br />or shop around for a partner <br />-- your customers will be.<br />www.ftrans.net<br />Ftrans | Community banking trends report | Fall 2010<br />
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