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Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
WHERE The Tower ClubTysons Corner, Virginia 20176
Host David LoughranVice President Commercial [email protected]
Guest Speaker Michael ClarkeCEO Access National Bank
Topic BANKING AND LENDING OUTLOOK FOR 2010What it means for small business
RSVP [email protected]
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
ISSUES FACING BANKS
Liquidity & Credit availability is constrained
•System is under pressure to de-leverage
•Investors & Management want to payback TARP
•Capital is being hoarded in anticipation “fix” by Congress
•Easy liquidity is gone, increased scrutiny, cost andconditions
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
ISSUES FACING BANKS
Profitability under pressure
•Carrying FDIC cost to absorb record failures
•Cost of capital and debt to banks is on the rise
•Banks are absorbing record loan losses
•Regulatory & audit burdens on the rise
•Overhead cost reductions & layoffs
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
ISSUES FACING BANKS
Bank appetite varies borrower and type of loan
•Indigestion CategoriesCommercial Real Estate – Income ProducingLand acquisition and developmentConstruction LoansResidential Equity LoansNon-prime residential mortgagesConsumer loans
•Appetite remains at healthy banks forCommercial & Industrial LoansPrime Residential
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
PR and Expectations Challenged
•New business has taken a back seat
•Internally focused on problems and cost saving measures
•News stream is ALL negative
•Banks have been declared the “villains’” of this crisis
•TARP-ed and feather-ed
•Best to keep head down and lay low
ISSUES FACING BANKS
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
Issues Facing Borrowers
Managing through the “Great Recession”
•No easy task – stress at all levels
•Sales volume, margins under pressure
•Good accounts go bad
•Trade credit more difficult
•Bank credit more difficult
•Asset values are down
•Cash flow constrained
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
Issues Facing Borrowers
At the Bank: Rates and fees up
•Fees increased for no apparent reason
•Basic Loan rates increased
•Default rates more prevalent
•Floor rates of interest imposed
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
Fine Borrowers are being asked to take loans elsewhere
•Now, the wrong loan type or industry
•Bank’s own financial difficulty
•Borrower had an off period and the bank over-reacts
•Bank Credit Policy changed: more restrictive
Issues Facing Borrowers
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
Terms, conditions and monitoring are tighter
•Economic conditions, increased loan lossescapital restrictions have made banks more conservative
•Hot points for operating companiesFinancial reporting – frequency & reliabilityCPA statement quality – audit/review/compilationPersonal guaranteesSpousesMinority partnerCollateral Adequacy
Issues Facing Borrowers
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
•Covenant compliance enforcementFinancial ratiosSignificant changes in the business
AcquisitionsOther debtChange in ownershipLitigationRelocation of headquarters or state of incorporation
Issues Facing Borrowers
Terms, conditions and monitoring are tighter
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
Your Bank’s Health & FocusHave Never Been More Important
•Adverse credit/business conditions are morelikely about the bank vs. the borrower
•Banks have preferences for loan types and industriesbut don’t do a very good job of communicating
•Large banks are moving middle marketcompanies to call center management
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
Your Bank’s Health & FocusHave Never Been More Important
•Bank Health Check
Is it profitable?
Is stockholders equity at least 8% of total assets?
Is management and ownership stable?
Is bank staff in tune with the health and priorities of thebank?
Did the bank take TARP?
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
Is There Good News?Solutions for Small Business Capital Needs
•Credit IS available: re-think how you evaluate credit offers
•Strongest relationships are forged and tested in difficult times
•Well managed banks are healthy and interested
•Industry types concentrated in DC metro are in favor
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
Is There Good News?Solutions for Small Business Capital Needs
•Stimulus – Mezzanine Financing
SBIC’s get more liquidity
Cash flow based loans
Ideal for acquisitions, management buyouts, etc
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
Is There Good News?Solutions for Small Business Capital Needs
•Stimulus – SBA loansQualification rules relaxedGuaranty percent increased to encourage banksSBA fees are waivedLimit increase from $2 to $5 million pendingIdeal for turnarounds, acquisitions refinance orstrategic growth
Sponsored by
Access National BankProgressive Business Bankingwww.accessnationalbank.com
(703) 871-2100
Growth CapitalEducational Series
February 19, 2010 12:00 Noon to 1:30 PM
Special Executive Briefing
Banking and Lending Outlook for 2010
Contact Information
Mike Clarke, CEO
Access National Bank
703-871-2101
David Loughran, VP
Access National Bank
703-871-2119