For most companies in the financial services industry, the past few years have been all about survival. This includes community banks, many of which have been forced to hunker down and play defense rather than go out and aggressively seek new lending opportunities. But if you’re reading this article, congratulations — you’re likely a survivor! Even better, the economic winds appear to be shifting, which may be a harbinger of profitable new lending opportunities in the current post-recession marketplace.

Here are a few tips for creating a new offensive game plan to help you identify these opportunities and get your bank back on a growth track:

Dig into your current customers’ financial statements. These are a potential gold mine of data and can help you identify new lending opportunities. For example, if the financial statements reveal the net book value of fixed assets is less than accumulated depreciation, the business could be a good candidate for an equipment term loan in order to purchase fixed assets that have been deferred. The same thing may be true if the net fixed asset base has been declining over successive years.

Another thing to look for is if R&E have been liquidated over the past few years due to falling demand and sales. If the business is anticipating renewed sales and growth going forward, it may need a working capital loan to finance replacement of these assets.
While it’s relatively easy to locate this kind of data for your current customers, you can discern similar information from prospective customers by doing a little digging. This will enable you to be more proactive in your calling efforts and more specific in your financing recommendations.

Identify borrowers with maturing balloon payments. Many businesses bought real estate between 2005-2007 with three- and five-year balloon payments that are maturing, but they can’t refinance them now with their current bank. Or maybe they need to refinance to avoid an ARM adjustment or take advantage of the current low-interest-rate environment.

Both of these scenarios may present potential lending opportunities for your bank. See Page 4 for details on the SBA’s new 504 Debt Refinance Program that will allow many businesses to refinance commercial mortgages.

Call on your wounded competitors’ best customers. Of course, there are plenty of troubled banks in the marketplace today, and a calling effort targeted at these banks’ best customers can pay big dividends. One way to identify troubled institutions is to download their Uniform Bank Performance Reports at http://ffiec.gov.

Many of these banks are focused primarily on working their way out of problems rather than meeting their customers’ financing needs. Still others — including financially sound banks — are under regulatory constraints that may preclude them from lending even to their good customers. These borrowers may welcome overtures from your calling officers.

When making these calls, don’t be critical of your competitor banks. Instead, simply ask customers if they have lending needs that currently aren’t being met and, if so, can you talk to them about how you might be able to help?

Look for profitable niches. Most banks have identified specific types of businesses or industries that fit within their “wheelhouse.” Look even deeper to find niches within niches where financing needs aren’t being met. If you can meet them cost-efficiently and profitably, design a calling effort targeted specifically to these businesses.

Ramp up your marketing efforts. If marketing has been put on the back burner the past couple of years, now may be the time to ramp it up again. One marketing strategy that has historically been successful for many community banks is hosting business seminars and workshops. Recruit local experts, consultants, accountants and maybe even politicians to come and talk about ways local businesses can take advantage of improving economic conditions — and get their companies back on the fast track to growth.

Give us a call if you’d like to discuss these and other growth strategies in more detail.