Positioning for Growth with Bank Assetpoint®
By Steve Kinner
Many banks are very liquid and looking for opportunities to situate their financial institutions for growth in the short- and long-term. These banks are short on the asset side and long on the liability side of the balance sheet, and are interested in purchasing assets for better balance. Other financial firms are in a position to sell. Of course, for a number of financial institutions, each of these propositions are easier said than done.
Whether they are buyers or sellers of assets, banks face a number of obstacles in the current environment. First, with such a highly fragmented marketplace, how can financial institutions efficiently identify potential buyers and sellers of assets – many of whom may not be local? Second, how can financial institutions acquire assets in key geographic or industry-specific areas – assets that may fit perfectly with their goals and expertise, but which they may not be able to find on their own? Many banks are finding a dearth of quality asset opportunities available in their local communities. And even if loan demand within a bank’s local market is strong, the institution may want to look elsewhere – beyond its backyard – to acquire desired assets. For example, a bank may want to adjust its loan portfolio to increase or diversify its mix in certain asset classes and borrower types, or to diversify its geographic footprint.
Banks can attempt to address these issues in a number of ways:
Expansion. Expansion into new geographic markets has long been a strategy utilized by banks looking to grow, as well as to gain an advantage over the competition. Banks can try to expand into new markets by opening loan production offices in territories outside their current geographic footprint. Such an approach can be fruitful, but it takes time and resources, and isn’t likely to provide the bank with immediate results.
Recruit a competitors’ best employees. Another common strategy is to attract loan officers from competitor banks in lucrative markets. While such an approach can have the dual effect of strengthening an institution while weakening the competition, it has its drawbacks as well. Top talent doesn’t come cheap and, even if a bank can win over its competitor’s top loan officers, those loan officers often are unable to immediately convert their client contacts to new business for the bank.
Buy up the competition. A third tactic is to buy a financial institution in the target market. But desirable deals are both hard to find and not easily executed. In addition, customer loyalty is not always easily transferable, especially if the loan officers at the purchased bank aren’t still employed by the purchasing institution.
Fortunately, there is a new alternative – Bank Assetpoint® – an online marketplace that promises to simplify, centralize, and increase buyer and seller connectivity.
Quite simply, Bank Assetpoint is an online gathering place for banks (and their brokers or loan sales advisors) and others – and it is the only national marketplace to focus on bank assets. Here, bank participants can post and view listings of a variety of new lending opportunities, as well as existing loans and commercial REO. Bank participants can also go to Bank Assetpoint to find service providers that can help with a purchase or sale transaction.
How can it help? Bank Assetpoint pulls fragmented, local, markets together in a way that promotes greater participation, transparency, and information sharing, and that facilitates connections to more buyers and sellers. All of this fosters market efficiency that may lead to faster sales.
Bank Assetpoint also increases visibility for certain asset types that have previously been difficult for some participants to access. It also provides greater access to non-bank lenders.
Bank Assetpoint is a great way to market and explore a wide range of existing loan assets, including whole loans, loan pools, and participations, without the hassle and expense of creating additional infrastructure and hiring new staff to support greater organic loan production.
Bank Assetpoint can help your financial institution, whether its focus is on loan purchases, loan sales, or both.
If your bank wants to focus on loan purchases, you can use Bank Assetpoint to:
- efficiently source new asset opportunities with various terms and diverse geographies;
- search national, local, or out-of-market listings for loan types such as secured or unsecured consumer loans, 1-4 family mortgage loan pools, C&I loans, CRE loans, and loan participations;
- leverage origination and underwriting expertise that already exists in the marketplace; and
- connect with specialty service providers, including loan sale advisors, who can help facilitate a sale through the Assetpoint CommunitySM
If your bank wants to focus on loan sales, you can use Bank Assetpoint to:
- showcase a wide range of performing and nonperforming assets, including loans, loan participations, and loan pools;
- connect with a community of potential buyers;
- access state-of-the-art virtual data rooms to securely provide information; and
- connect with specialty service providers, including loan sale advisors, who can help facilitate a sale through the Assetpoint Community.
Bank Assetpoint is brought to you by Promontory Interfinancial Network, the same company that created CDARS®, ICS®, and IND®, and that was founded 11 years ago for the precise purpose of addressing the needs of community bankers in all 50 states. Promontory is the industry leader in FDIC-insured deposit placement services and a company that maintains a network of nearly 3,000 banks. Over the years, Promontory’s services have evolved and multiplied in response to its member banks’ needs. Bank Assetpoint is no exception.
We heard from our community bank members about the desire for greater lending opportunities than they have locally. We saw signs of segmentation in the banking industry: a small number of banks are doing well, but most are still facing pressures they have faced for years – one being distressed assets lingering on their balance sheets. We heard that parties that want to buy assets have problems finding them and that brokers had problems finding bankers.
Bank Assetpoint has another thing in common with Promontory’s other funding services: creating opportunities. For example, CDARS and ICS allow banks, especially community banks, to keep large dollar depositors. Bank Assetpoint provides a way for banks, especially community banks, to diversify their asset portfolios. And that is important – the FDIC last year concluded that, under its standards, 94 percent of the banks in the country were community institutions.
Bank Assetpoint pulls everything – the asset listings, the buyers and sellers, and the professional advisors – onto one easy-to-use online platform, which helps create new opportunities for buyers and sellers to connect. Bank Assetpoint centralizes fragmented markets. Buyers of bank assets previously had to search hundreds of broker or lender sites in hopes of finding assets. Now they can come to one place – Bank Assetpoint. Buyers can also save their searches on Bank Assetpoint so that they can conveniently receive updates when newly posted assets meet their saved criteria.
In October 2013, Bank Assetpoint was launched nationally, and the service is already connecting financial institutions and other parties that want to buy and sell bank assets – loans, commercial real estate, etc. More than 4,000 participants have registered for Bank Assetpoint, including over 1,000 banks, ranging in size from small-town community banks to among the nations’ largest. The platform has also attracted listings from the five of the six largest national CRE brokerage firms. And by using Bank Assetpoint, banks have identified $350 million new alternative loan originations that have already closed or that have firm sales commitments or ongoing flow agreements.
Get started today! Registering is easy. Armed with login information, you can search or post listings; filter and sort asset listings; set up watchlists to receive email alerts of new listings of interest; check listing activity; and utilize secure, state-of-the-art virtual data rooms to review and sign nondisclosure agreements and view asset-specific information.
To learn more, visit www.bankassetpoint.com (where you can watch a two-minute video overview), or contact me at (866) 776-6426.
Bank Assetpoint is provided by Assetpoint Services, LLC, a wholly owned subsidiary of Promontory Interfinancial Network, LLC.
Assetpoint Services, LLC does not, merely by permitting the listing of an asset or the identification of a third-party provider of services on the website, endorse the asset, the party posting information about it, or the third-party provider, as applicable. Use of the Bank Assetpoint service is subject to the terms and conditions in the Bank Assetpoint agreements, including the Bank Assetpoint Participant Agreement.
© 2013 Assetpoint Services, LLC.