This document discusses challenges facing small community banks and potential strategies for survival. Small banks are getting smaller as their market share of banking assets has declined from 38% to 14% from 1984 to 2011. They are at risk from increasing competition from large banks, evolving consumer preferences for digital banking, growing fintech investments, and new digital-only banks. However, small banks can partner with alternative lenders to address specialty financing needs of clients and improve client retention, while focusing on their core lending strengths like real estate. One company, Coral Capital Solutions, is presented as an ideal alternative lending partner that can provide working capital loans to businesses that small banks cannot serve directly.

1. Community and Regional BanksCommunity and Regional Banks
the road aheadthe road ahead

2. Introduction
Threats to Small Banks
What do Small Banks
do best today?
Current Scenario
Small Banks getting smaller,
rather marginalised
Why is their business
at risk today?
In that context, how
Small Banks can continue
with Business as Usual?
Table of ContentsTable of Contents

3. Introduction
The Threat
Introduction
The Threat

5. Current Scenario
Small Banks getting smaller, rather marginalised
Current Scenario
Small Banks getting smaller, rather marginalised

6. FDIC 2011 Study on Small Banks
US banking assets share of small banks has reduced
from 38% in 1984 to just 14% in 2011.
38% 14%
20111984

7. But, during these 3 decades some of the small banks
have not only survived, but went on to become
profitable. How did they do it?

8. How did the Small Banks survive?How did the Small Banks survive?
Small Business BankingSmall Business Banking

9. Small Banks mastered Relationship based Banking
Compared to large banks who have focused on residential
mortgages, auto loans and credit cards.

10. Why are Small Banks at Risk?Why are Small Banks at Risk?
ChallengesChallenges

11. COMPETITION
EVOLVING CONSUMERS
FINTECH INVESTMENTS
EXPANDING LARGE BANKS
NEW KIND OF BANKS

12. Evolving Consumers
The next generation of existing customers of Community
Banks, prioritize pace and facilities over existing legacy
relationships. Not only are they comfortable with the
latest technology (including FinTech), but they are also
on the cutting-edge of the latest information.

13. Fintech Investments
Source : Cti and CB Insights © May 2016 The Financial Brand
2010
2011
2012
2013
Investment in fintech has
increased x10 in past 5 years
2014
2015
$ 1.8 billion $ 2.4 billion $ 12 billion
$ 2.1 billion $ 4.0 billion $ 19 billion

14. Blockchain Technology
Bitcoin, the global cryptocurrency, is based on Blockchain.
Blockchain technology could help the world’s largest
investment banks cut their infrastructure costs by between
$8 to $12 billion a year by 2025, according to a report by Accenture

15. Large Banks getting Larger...
...and impacting the business Small Banks because of,
The pressure to grow Assets Book
Increasing emphasis on growing Retail Lending
FinTech Investments driving economies of scale

16. New (un)Banks
… without a Physical Branch.
Imagine !!!
Mobile Only Banks like Atom and BankMobile have
come up and thriving.

17. Can Small Banks continue?
There is a way out
Can Small Banks continue?
There is a way out

18. FINTECH COMPANIES
ALTERNATIVE LENDERS
Partnerships

19. Partnership - Alternative Lending
And this Banking Trend is continuing.
Giving rise to Special Asset situations at Small Banks.
Thus, Alternative Lending.
According to the Wall Street Journal, banks have decreased
the number of loans to businesses by more than 38 percent
since 2006.

20. Partnership - Alternative Lending
Small Banks are adopting Alternative Lending
arrangements for Special Assets, to deleverage
their Balance Sheet successfully.
The 2008 recession paved the way for this industry
– Alternative Lending.

21. Why Coral Capital Solutions?Why Coral Capital Solutions?
The Ideal Alternative Lending PartnerThe Ideal Alternative Lending Partner

22. Speciality Finance Needs
Banks are now able to address the specialty finance needs of
the clients (such as receivable finance, purchase order finance,
and cash advances) through alternative lending, without putting
capital at risk.

23. Improve Client Retention
With capital needs satisfied by non-depository alternative
finance companies, clients can retain their deposits and
treasury management relationship with the bank.

24. Focus on Lending Against Core Tangible Assets
Banks have traditionally had expertise in and dominated the
market of lending against tangible assets like real estate and
heavy equipment. Focus on core competence improves
risk/reward of the bank’s balance sheet.

25. Coral Capital Solution serves businesses in need of working capital that cannot
secure bank financing.
We focus on providing financing against accounts receivables, purchase orders,
and contractual revenue streams to whether they are high growth start-ups or
companies in turnaround.
Help your clients meet immediate cash flow requirements with credit
facilities from $1Million to $10Million.
I want to partner with Coral CapitalI want to partner with Coral Capital