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The year 2025 marks the 120th anniversary of CNext. Each month, members of our team will share how banking has changed across our history. From events such as wars, Y2K, 9-11, and the crumble of the Savings & Loan Industry, our team will share how history has shaped banks both nationally and locally. Stay tuned and enjoy the journey through banking history!
I review loans before they go to our board and loan committee, and I approve loans that are within the lender's limit. I assist with underwriting issues and review loans to make sure they comply with bank policy. Also, I make adjustments and updates to our policies as needed. Basically, my role is to support the lenders and oversee loans throughout the process.
When I started, on average a loan would process and close in about 2 weeks, but appraisals, title research, etc., could sometimes slow the process. Today it takes about 5-6 weeks to reach the closing table due to a variety of factors including additional regulations and paperwork. Years ago, we often had "relationship lending" which meant a loan would be made from the relationhip the bank had with their customers. We could put a loan into production based on history, reputation, and the financial relationship we shared. Those loans were faster. Today we require documentation to back up history and finances.
Technology has changed every aspect enormously. In my first year, we used Promissory Notes as the loan documents, and they were three pages with a carbon in between each page. We also had actual Ledger Cards for receiving and posting payments. Today, customers can pay online and the software will post the payment to the correct account. The loan documents have grown in quantity, but the process is better for all.
On the business/commercial side of lending, not really at all, but mortgage and consumer/personal lending has truly been affected, meaning competition. For the commercial lender, it is typically brick and mortgar locations that are our competitors. We are surrounded by banks so we have to be better at what we do, too, because we care about our customers and want to keep that relationship.
Interest rates are a chief principle in all lending. Think about this, loans that were at 4.5% could now be around 8%. A family mortgage payment that was $700 could now be $1500 to $1600 a month. That kind of payment increase will affect commercial loans as well. Lower rates will spur expansion and activity on both the commercial and consumer side of lending. Payments become within budget or just simply affordable.
Thank you, Layne, for your time and answering these trending questions about lending. We are grateful for your expertise which is one reason our customers put their trust in Century Next Bank! To learn more about our lenders and customers, please visit cnext.bank/bankwithlocals.
