9 PUB. 11 2021 ISSUE 4 PCBB has a C&I program that can increase your loan portfolio. To learn more, please contact Jay Kenney at pcbb.com or jkenney@pcbb.com. How community banks can benefit? Through years of experience in this market, PCBB has found the following advantages with syndicated C&I loans. • Flexibility. The liquidity is one potential benefit to owning a piece of one of these loans. An FI that buys a loan from another FI in most other situations might be able to exit the position, but only by selling the loan back to the originator. If the first institution doesn’t want to repurchase the loan, the second one is stuck. These C&I loans offer quicker liquidity and more flexibility. • Interest income and diversification. Syndicated C&I loans generally offer returns that, on a risk-adjusted basis, compare well with a C&I portfolio based in a small, local market. Returns are particularly good given the current low-rate environment. With a variety of borrowers in various industries, these loans allow you to use your liquidity and diversify your loan portfolio at the same time. Moreover, this kind of lending offers small community banks an opportunity for loan growth that in the past has been the domain of large banks. Given the current challenges for many community banks to expand their lending, they may want to look into the syndicated C&I debt marketplace. w The $1.5 trillion syndicated loan market for secured commercial and industrial loans typically involves sizeable loans and large borrowers financing substantial transactions, such as mergers and acquisitions.
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