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

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


Growth Capital
ISSUES FACING BANKS
Educational Series

Liquidity & Credit availability is constrained
Sponsored by

•System is under pressure to de-leverage
Access National Bank
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


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
(703) 871-2100 •Banks are absorbing record loan losses

•Regulatory & audit burdens on the rise

•Overhead cost reductions & layoffs


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


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
Progressive Business Banking •News stream is ALL negative
(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


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
(703) 871-2100 •Trade credit more difficult

•Bank credit more difficult

•Asset values are down

•Cash flow constrained


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
(703) 871-2100
•Basic Loan rates increased

•Default rates more prevalent

•Floor rates of interest imposed


Educational Series
Fine Borrowers are being asked to take loans elsewhere
Sponsored by
•Now, the wrong loan type or industry
•Bank’s own financial difficulty
(703) 871-2100
•Borrower had an off period and the bank over-reacts

•Bank Credit Policy changed: more restrictive


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
Progressive Business Banking •Hot points for operating companies
(703) 871-2100
Financial reporting – frequency & reliability
CPA statement quality – audit/review/compilation
Personal guarantees
Spouses
Minority partner
Collateral Adequacy


Educational Series
Terms, conditions and monitoring are tighter
Sponsored by
•Covenant compliance enforcement
Access National Bank Financial ratios
Significant changes in the business
(703) 871-2100 Acquisitions
Other debt
Change in ownership
Litigation
Relocation of headquarters or state of incorporation


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
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


Your Bank’s Health & Focus
Growth Capital
Educational Series
Have Never Been More Important
•Bank Health Check
Sponsored by
Is it profitable?
Progressive Business Banking Is stockholders equity at least 8% of total assets?
(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?


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
Progressive Business Banking •Strongest relationships are forged and tested in difficult times
(703) 871-2100 •Well managed banks are healthy and interested

•Industry types concentrated in DC metro are in favor



Sponsored by
•Stimulus – Mezzanine Financing
Progressive Business Banking SBIC’s get more liquidity
(703) 871-2100
Cash flow based loans

Ideal for acquisitions, management buyouts, etc



Sponsored by •Stimulus – SBA loans
Qualification rules relaxed
Access National Bank Guaranty percent increased to encourage banks
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


Growth Capital Contact Information
Educational Series Mike Clarke, CEO
Sponsored by
703-871-2101
Access National Bank mclarke@accessnationalbank.com
(703) 871-2100
David Loughran, VP
703-871-2119
dloughran@accessnationalbank.com

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

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