Independent Banker - August 2018 - 29

things to do in banking, " says G. Scott
McComb, chairman, president and chief
executive of Heartland Bank, a $960
million-asset bank in Whitehall, Ohio.
Take the pulse
To be sure, rates are still at somewhat of
a directional crossroad. They have risen,
but not so outlandishly that borrowers
are giving significant pushback-at least
not yet, bankers say. That's why now's
an especially good time for community
banks to take the pulse of their lending
staff and determine where additional
training may be warranted. The higher
rates go, the more difficult conversations
with customers are likely to be and the
more prepared lenders need to be to
face those challenges head on.
" You have to have the finesse to have
the dialogue, " says Noah Wilcox, president,
chief executive and chair of Wilcox
Bancshares in Grand Rapids, Minn.,
and vice chairman of ICBA. He offers
the hypothetical example of a customer
whose rate has long been steady but is
now rising. Previously, the loan may
have been priced at 4 percent, but now,
because of the rising interest-rate cycle,
offering that same rate won't be prudent
from the bank's perspective, even though
the customer might be expecting it.
Loan officers need to be prepared to talk
with customers, manage expectations
accordingly and offer alternatives to
which they may be amenable. Options
might include a fixed loan for three years
at 5.5 percent, a loan fixed for five years
at 6 percent or a variable-rate loan for
five years, says Wilcox, whose banking
company operates two bank charters
with a combined $335 million in assets,
including Grand Rapids State Bank.
Not every customer will choose the same
option, so lenders need to be well-versed
in each one, says John Watts, senior vice
president of lending solutions at Baker
Hill, a Carmel, Ind.-based provider of
technology and services that support
lending, risk management and analytics
for community and mid-size banks.
That's where proper training comes in.
The approach a community bank takes
will depend on its size and the makeup
of its lending department. Younger
lenders may need more direction, while
more seasoned veterans may only need
a minor refresh of their skills.
Some banks are focusing their efforts
on monthly and quarterly group trainings
for lenders. Other ideas include internal
webinars or providing loan officers with
written case studies that illustrate the
multiple pricing and term structures that
are acceptable to the bank, says Watts,
a former commercial banker.
Wilcox Bancshares has been handling
the challenge in a few ways. Members
of the bank's Asset-Liability Committee
have been speaking to groups of lenders
to offer detailed explanations of how the
bank prices and structures loans and
" Managing
loan officers
in a rising-rate
environment is
one of the hardest
things to do
in banking. "
-G. Scott McComb,
Heartland Bank
Independent Banker - August 2018

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