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Total loan trends
For their call reports, FDIC-insured banks must report total loans by the following loan types:
One- to four-family
One- to four-family junior liens
Loans to individuals
Commercial real estate
Construction and development
Commercial and industrial
Loans to other depository institutions
With this information, you can see which banks are increasing or decreasing their total loans. You also can get a better look into what loan types your lenders will more likely fund, which can help you focus your workload.
Additionally, if a client transaction proves difficult, the data can provide valuable alternatives to your current lending sources or help you understand a lender's position for the next transaction. Look for banks with increasing loan amounts in the areas in which you work. Lender-specific amounts can show you who is driving the national trends and who is lending.
Lenders also report detailed information by loan type, which summarizes loans that are 30 to 89 days past due, 90 or more days past due, in nonaccrual status, charged off and recovered. Delinquent- and nonaccrual-loan levels are a clear proxy for foreclosures. Nonaccrual loans are so delinquent that the lender has stopped accruing interest on them.
If a lender has many commercial loans of a certain type in nonaccrual status or is running through delinquencies, its likelihood of lending in those troubled sectors is slim. Find a lender with fewer problems in your area of focus.
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Digging into the loan data for the banks and lenders with which you work will greatly help you understand which will more likely fund your clients' deals. There are many other data points to consider, as well.
If what you hear from your lender is not in line with what its FDIC call-report data tell you, it's a red flag. Anticipate a difficult underwriting process or look for more-likely candidates for funding your clients' deals when you see inconsistencies. Bringing up the specific data in discussions with a lender also will help open the doors for a more direct and frank discussion.
Lenders are challenging you and your clients. Challenging lenders to be truthful with their financial health may in turn help you focus deals and achieve success.
Jeff Reibel is founder and CEO of Louisville, Ky.-based Conexxus LLC.
Conexxus develops, markets, and supports software and accompanying solutions offering increased visibility and decreased costs for clients. The company's REO Optimizer, recognized by Bank Technology News as a 2009 Innovator, helps financial institutions deal with, increase returns and shorten sale cycles for distressed assets by procuring, organizing and sharing key documents for distressed construction, development and commercial real estate. For more information, contact firstname.lastname@example.org.
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