Pub. 1 2021 Issue 6

December 2021 | 17 • Look for prospects that previously have been less traditional, such as creditworthy providers of services or products that cannot be obtained online. • Remember that as society and technology change, new products and services will emerge. Banks must embrace new lending opportunities that accompany these developments, even if they may have been perceived as rooted in alternative lifestyles. • In robust growth markets, shed the reluctance to provide — selectively and sanely — some construction lending to help right the out-of-balance supply and demand currently affecting one to four family housing. No one suggests repeating the excesses of a decade ago. However, limited supply and avoidance of any speculative lending in this segment have created huge value inflation that is excluding bankers from legitimate lending opportunities at a time when these would be welcomed. Bankers must remember the lesson from the last banking crisis: Chasing growth-using loans made during a competitive environment of lower credit standards always leads to eventual problems when economic stress increases. This is the “lesson on vintages” truism. A July 2019 study from the Federal Deposit Insurance Corp. on failed banks during the Great Recession revealed that loans made under these circumstances were critical contributors to insolvency. Whatever strategies the industry uses Call me at 573.268.5172 Based in Columbia, Mo., covering Missouri and Kansas Bill Lloyd, Jr. Together, let ’s make it happen. Member FDIC 33299 We do not reparticipate any loans. Leverage our large lending capacity, up to $20 million on correspondent loans. Our lending limits are high enough to accommodate what you need, when you need it. Why choose Bell as your bank’s lending partner? Commercial & ag participation loans Bank stock & ownership loans Bank building financing Business & personal loans for bankers to reverse declining loan demand must be matched by vigilant risk management techniques, utilizing the best technology to highlight early warnings within the new subsets of the loan portfolio, a more effective syncing of portfolio analytics, stress testing and even loan review. ■ David Ruffin is a principal at IntelliCredit, A Division of QwickRate. He has extensive experience in the financial industry, including a long and pronounced emphasis on credit risk in a variety of roles that range from bank lender and senior credit officer to co-founder of the successful Credit Risk Management, LLC consultancy and professor at several banking schools. Let go of any reluctance to embrace government-guaranteed lending programs from agencies, including the Small Business Administration or Farmers Home Administration.