Access National Bank Executive Briefing 2010 Banking Outlook - Growth Capital Event

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Access National Bank Executive Briefing 2010 Banking Outlook - Growth Capital Event

  1. 1. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Growth Capital WHERE The Tower Club Educational Series Tysons Corner, Virginia 20176 Host David Loughran Vice President Commercial Lending Sponsored by dloughran@accessnationalbank.com Access National Bank Guest Speaker Michael Clarke Progressive Business Banking CEO Access National Bank www.accessnationalbank.com (703) 871-2100 Topic BANKING AND LENDING OUTLOOK FOR 2010 What it means for small business RSVP rkirkpatrick@accessnationalbank.com
  2. 2. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Growth Capital ISSUES FACING BANKS Educational Series Liquidity & Credit availability is constrained Sponsored by •System is under pressure to de-leverage Access National Bank Progressive Business Banking www.accessnationalbank.com •Investors & Management want to payback TARP (703) 871-2100 •Capital is being hoarded in anticipation “fix” by Congress •Easy liquidity is gone, increased scrutiny, cost and conditions
  3. 3. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Growth Capital ISSUES FACING BANKS Educational Series Profitability under pressure Sponsored by •Carrying FDIC cost to absorb record failures Access National Bank •Cost of capital and debt to banks is on the rise Progressive Business Banking www.accessnationalbank.com (703) 871-2100 •Banks are absorbing record loan losses •Regulatory & audit burdens on the rise •Overhead cost reductions & layoffs
  4. 4. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Growth Capital ISSUES FACING BANKS Educational Series Bank appetite varies borrower and type of loan Sponsored by •Indigestion Categories Access National Bank Commercial Real Estate – Income Producing Progressive Business Banking Land acquisition and development www.accessnationalbank.com Construction Loans (703) 871-2100 Residential Equity Loans Non-prime residential mortgages Consumer loans •Appetite remains at healthy banks for Commercial & Industrial Loans Prime Residential
  5. 5. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 ISSUES FACING BANKS Growth Capital PR and Expectations Challenged Educational Series •New business has taken a back seat Sponsored by •Internally focused on problems and cost saving measures Access National Bank Progressive Business Banking •News stream is ALL negative www.accessnationalbank.com (703) 871-2100 •Banks have been declared the “villains’” of this crisis •TARP-ed and feather-ed •Best to keep head down and lay low
  6. 6. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Issues Facing Borrowers Growth Capital Managing through the “Great Recession” Educational Series •No easy task – stress at all levels Sponsored by •Sales volume, margins under pressure Access National Bank •Good accounts go bad Progressive Business Banking www.accessnationalbank.com (703) 871-2100 •Trade credit more difficult •Bank credit more difficult •Asset values are down •Cash flow constrained
  7. 7. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Growth Capital Issues Facing Borrowers Educational Series Sponsored by At the Bank: Rates and fees up Access National Bank •Fees increased for no apparent reason Progressive Business Banking www.accessnationalbank.com (703) 871-2100 •Basic Loan rates increased •Default rates more prevalent •Floor rates of interest imposed
  8. 8. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Growth Capital Issues Facing Borrowers Educational Series Fine Borrowers are being asked to take loans elsewhere Sponsored by •Now, the wrong loan type or industry Access National Bank Progressive Business Banking •Bank’s own financial difficulty www.accessnationalbank.com (703) 871-2100 •Borrower had an off period and the bank over-reacts •Bank Credit Policy changed: more restrictive
  9. 9. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Issues Facing Borrowers Growth Capital Educational Series Terms, conditions and monitoring are tighter Sponsored by •Economic conditions, increased loan losses capital restrictions have made banks more conservative Access National Bank Progressive Business Banking •Hot points for operating companies www.accessnationalbank.com (703) 871-2100 Financial reporting – frequency & reliability CPA statement quality – audit/review/compilation Personal guarantees Spouses Minority partner Collateral Adequacy
  10. 10. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Growth Capital Issues Facing Borrowers Educational Series Terms, conditions and monitoring are tighter Sponsored by •Covenant compliance enforcement Access National Bank Financial ratios Progressive Business Banking Significant changes in the business www.accessnationalbank.com (703) 871-2100 Acquisitions Other debt Change in ownership Litigation Relocation of headquarters or state of incorporation
  11. 11. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Growth Capital Your Bank’s Health & Focus Educational Series Have Never Been More Important Sponsored by •Adverse credit/business conditions are more likely about the bank vs. the borrower Access National Bank Progressive Business Banking www.accessnationalbank.com •Banks have preferences for loan types and industries (703) 871-2100 but don’t do a very good job of communicating •Large banks are moving middle market companies to call center management
  12. 12. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Your Bank’s Health & Focus Growth Capital Educational Series Have Never Been More Important •Bank Health Check Sponsored by Is it profitable? Access National Bank Progressive Business Banking Is stockholders equity at least 8% of total assets? www.accessnationalbank.com (703) 871-2100 Is management and ownership stable? Is bank staff in tune with the health and priorities of the bank? Did the bank take TARP?
  13. 13. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Growth Capital Is There Good News? Educational Series Solutions for Small Business Capital Needs Sponsored by •Credit IS available: re-think how you evaluate credit offers Access National Bank Progressive Business Banking •Strongest relationships are forged and tested in difficult times www.accessnationalbank.com (703) 871-2100 •Well managed banks are healthy and interested •Industry types concentrated in DC metro are in favor
  14. 14. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Growth Capital Is There Good News? Educational Series Solutions for Small Business Capital Needs Sponsored by •Stimulus – Mezzanine Financing Access National Bank Progressive Business Banking SBIC’s get more liquidity www.accessnationalbank.com (703) 871-2100 Cash flow based loans Ideal for acquisitions, management buyouts, etc
  15. 15. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Growth Capital Is There Good News? Educational Series Solutions for Small Business Capital Needs Sponsored by •Stimulus – SBA loans Qualification rules relaxed Access National Bank Guaranty percent increased to encourage banks Progressive Business Banking www.accessnationalbank.com SBA fees are waived (703) 871-2100 Limit increase from $2 to $5 million pending Ideal for turnarounds, acquisitions refinance or strategic growth
  16. 16. February 19, 2010 12:00 Noon to 1:30 PM Special Executive Briefing Banking and Lending Outlook for 2010 Growth Capital Contact Information Educational Series Mike Clarke, CEO Access National Bank Sponsored by 703-871-2101 Access National Bank mclarke@accessnationalbank.com Progressive Business Banking www.accessnationalbank.com (703) 871-2100 David Loughran, VP Access National Bank 703-871-2119 dloughran@accessnationalbank.com

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