LOOKING AT SNAKES AND THE LOAN DEPT. FOR VALUE

A disturbing news story hit our desk the other day regarding the apprehension of a 4 ft. python in connection with an armed robbery of a liquor store in VA. According to the police report, the criminals robbed the store and then "stashed money inside a snake" to avoid police capture. The report did not go into the details of how one exactly might "stash" money inside a snake, or more important, how to get it back out. We remain curious. Community bankers looking for extra cash around the bank that don't have any snakes handy might want to try looking in your loan department. To begin, the department is a treasure trove of sales leads. That is good, because loan customers are the first place bankers should go when seeking new depository relationships. Referrals, discounts for establishing primary checking accounts, or debit card programs can all help to increase profitability. The other aspect of hanging out in the loan department is that it is also a data repository for other lucrative information. Here are 4 of the most untapped areas banks could leverage to increase transaction business: Cash and Securities – An additional amount of cash and marketable securities can be observed on a client's balance sheet during a financial review. Questions may arise over whether or not there are better uses for the cash balances and who is handling investment advisory. Commercial Mortgages - When reviewing corporate financials for a line of credit, an analyst may discover that the firm's mortgage(s) is held with a competing institution. Equipment – By conducting a quick calculation on a client's average estimated useful life of equipment, additional refinancing options may present themselves. Personal – Principals of the corporation have a variety of financial needs that can be uncovered when a bank does the analysis of the owner's financial position. As can be seen above, the loan department is well positioned to generate a qualified referral to the appropriate source. Banks that are looking to capture these leads need to develop education and a process for following up. A $1.1B TX bank we work with recently developed a "Business Control Officer." This individual does nothing but process and follow-up leads generated by the loan department. They are responsible for orchestrating tactics and then receiving referrals for further analysis. Once the lead is received, the officer then makes the initial contact with the client (or manages the relationship manager/loan officer to do so) to further qualify it. If the lead turns out to be genuine and the client is open to a proposal, the Business Control Officer then gets the appropriate product specialist involved and they craft a joint proposal. The bank reports that this officer is more successful at generating leads than any outside calling officer. If you are looking for stored value, check your loan department. If you are looking to store money, as an investment advisor, we can't really recommend a snake.