Specialized Lending Teams Helping Banks Build Business Relationships

Published on: November 14, 2016

Andy Meek, Memphis Daily News

Standing apart from the competition in banking is not necessarily the simplest thing to do, given that key aspects of the industry – making loans, taking deposits and the like – look so similar from one institution to the next.

And when big, sweeping changes are made throughout the industry, institutions tend to follow one another. It’s one reason why at so many banks now – including many in the Memphis market – the branch experience has been gutted and replaced with a model that feels more like an Apple store, with roaming experts who can handle any request and the absence of a traditional teller row.

That’s not to say that everything about banking is so easily commoditized. Regions Bank West Tennessee-area president David May points to his institution’s teams of specialized lenders that cover everything from health care to technology as something that helps set his bank apart.

“Our specialty lending started over 10 years ago,” May said about Regions’ teams of bankers that narrowly focus on industries like health care. “We started with health care and have since built out others, because we follow the needs of our market.

“Generally, we go outside the company to find that expert that’s really incredible at it. Sometimes we’re fortunate and find that expert inside, and then we build up a team of specialty bankers and credit-approving folks who come alongside those folks.”

And then they’ve got something that’s not so easily replicable.

According to year-end 2015 numbers from Regions, the bank saw total loan growth of 6 percent. The bank said commercial and industrial loans were strong contributors to its expanded lending, which comprises 44 percent of its total loan portfolio.

The business model May described involves teaming up local bankers with industry specialists. And that, according to a bank spokesman, is what helped contribute to growth throughout Regions’ specialized industries group.

“What’s unique to Regions is those specialty people come alongside our local bankers,” May said. “All of our commercial bankers in Memphis have relationships with the largest franchises, the largest logistics people in Memphis, for example, and we will bring in the specialists to come alongside us. And that credit is all booked here locally and managed locally.”

Talk to enough bankers and banking executives, and a competitive differentiation often touted is a familiar word: “service.” Given the similarity of products from institution to institution, and especially with interest rates remaining low, banks see their employees and bench of talent as a way to stand out.

Specialty teams – and professionals with particular niche expertise – are an example of that.

Over at Financial Federal Bank, Gerre Currie has just been hired as vice president and community development officer. Among other things, she’ll be responsible for building strategic alliances with nonprofits, community development organizations and Realtors to identify opportunities for financing and infrastructure improvements to new and existing markets in the Memphis area.

At Pinnacle Bank, meanwhile, its biggest specialty in the Memphis market is around real estate and its Small Balance Loan Program. Through the latter, Pinnacle offers a streamlined way to get apartment loans ranging from $1 million to $5 million, and the bank has just added Andy Watkins, a new financial adviser assistant for that group.

Pinnacle also has agreements to act as an agent bank for insurance companies to originate and service nonrecourse, long-term fixed and variable rate commercial real estate loans. And Pinnacle has a strong music industry team that is based in Nashville and does business in Memphis.

The story is similar at Metropolitan Bank, where Memphis market CEO Phillip May said the bank has developed expertise in industries like heath care and music.

“We’ve made a pretty significant investment in terms of getting and developing knowledge and learning as much as we can about industries like health care, the business side of health care and not just the practitioner side,” Phillip May said. “Transportation/logistics is another obvious one. When you get a reputation for – once you get into that space, you find other opportunities. You get referrals from people who say, ‘Oh, to understand this industry, you need to talk to Metropolitan.’ That’s definitely helped us a lot.”