Issue link: http://www.insightdigital.biz/i/252322
w w w . i n s i g h t o n b u s i n e s s . c o m F e b r u a r y 2 0 14 • I nsIgh t | 31 "Rather than tell them they have to come up with another $300,000 – who can do that? – we are being proactive with this A/B note split and saying the economy will improve, real estate will come back and we can bring that B note back into the fold again and recover it," Rupnow explains. Otherwise, he says, the bank would almost be forced to push them out of the bank and foreclose. American national has had a few commercial foreclosures, he adds. Banks try to avoid taking over properties because then they are stuck managing a building, paying taxes and insurance, sometimes investing in repairs to make it salable. Regulations 'onerous' new regulations from the U.s. treasury Department's Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation (FDIC) have placed burdens, oen conflicting, on banks. Christine Barry, research director at the financial analyst firm Aité group, based in new York, says banks across the country face problems of regulatory overlap. "It almost doesn't matter what product set an institution is selling, they are governed by a number of different agencies without any single overarching regulator to make sure the rules are in synch. One agency goes into a bank and says X, and the next day another agency comes in and says Y. It is extremely frustrating for the institutions to respond and manage." In some cases the regulation has gotten so onerous it will force banks to drop certain types of business, she adds. BayLake Bank, headquartered in sturgeon Bay, doesn't require new property evaluations when a commercial loan comes up for renewal, according to Jeff Miller, vice president of business banking. "Cash flow is the primary source of repayment, so if the company continues to do well, making payments and showing a profit, there is no are dealing with now is the term of a loan and the price. Interest rates will probably increase in the next three or five years, so refinancing requires some decisions about how long a loan to take out, and at fixed or variable rate. An owner might pay more for a five-year fixed but she can sleep better knowing that the rate won't suddenly jump 2 or 3 percentage points, he says. "It's the customer's decision; we try to talk through what is best, and that may be paying a little higher rate to get locked in." reason for a bank to be upset. We would renew the note for another three years, because cash flow, rather than collateral, is driving the decision." From 2008 to 2010, a lot of local businesses were struggling with cash flows and banks took back a lot of properties because of a lack of payments, rather than lack of collateral, he adds. "now that the market has started to turn, property values have gone up and it is far less of an issue." e biggest issue that loan officers "Cash flow is the primary source of repayment, so if the company continues to do well, making payments and showing a profit, there is no reason for a bank to be upset. … Cash flow, rather than collateral, is driving the decision." — J e f f m i l l e r, v i c e p r e s i d e n t o f b u s i n e s s b a n k i n g , B a y L a k e B a n k 3.05 % Annual Percentage Rate 920.729.6900 | www.fnbfoxvalley.com *Qualications do apply. Visit www.fnbfoxvalley.com/disclosure or call 920.729.6900 for full disclosure. Member FDIC On Kasasa Cash balances up to $15,000 if qualications* are met.