CRE Concentrations / FinTech Lending / Amazon Echo / Charter Application Withdrawn
By:
Sharon J. Lorman
Jeffrey P. Marsico
Guest: Frank Korzekwinski, Senior Executive Vice President and Chief of Real Estate Lending at Flushing Bank
Podcast Show Notes:
Our This Month In Banking (TMIB) podcast will highlight significant news and events in banking and our hosts’ take on them, along with interviews with industry thought leaders. TMIB will be available on the last Wednesday of every month here, on Stitcher, Soundcloud, and iTunes for your listening enjoyment. Join us on your commute or at your desk.
Topic 1: Commercial Real Estate Concentrations
Start time 1:07
Frank Korzekwinski was TMIB’s guest for this segment. Mr. Korzekwinski serves as the Senior Lending Officer of Flushing Bank. He has been with Flushing for 23 years. Frank’s role includes the oversight and management of the Bank’s real estate portfolio, as well as the development of policies and procedures related to all real estate lending activities including new loan originations, loan servicing, collections and foreclosure activities, disposition of OREO and portfolio management. The Bank’s real estate portfolio consists of multi-family, non-owner occupied commercial real estate, residential/mixed use and 1-4 family mortgage loans. Flushing Bank is a full service community bank that specializes in financing income producing real estate assets.
Many banks are increasing CRE loans as a means to bolster profitability and for some, their CRE exposures have risen in excess of federal guidelines. Federal regulators issued a joint statement in December 2015 that warned of a substantial rise in exposure to loans backed by commercial real estate that often included loosened underwriting standards. However, the warning has done little to dull the industry’s growing appetite to make commercial real estate loans.
Topic 2: FinTech and Banking
Start time 13:13
A veteran financial services investor is sounding the warning call, suggesting the fintech movement will not be smooth sailing for most startups or their investors. Part of the problem, according to J. Christopher Flowers, is that the Silicon Valley mentality of growing big fast and achieving market domination doesn’t mesh well with lending. As he put it, “It is one of the oldest adages in our business that the lender that grows fast is the lender with future losses.” One of the risks is in making poor lending decisions, particularly in the area of unsecured consumer loans where many of these fintech startups are focusing their business.
Topic 3: Capital One and Amazon Echo
Start time 20:59
Capital One recently announced an initiative for customers to be able to perform banking tasks through voice commands using Amazon Echo’s smart speaker system. FIS, Citigroup and Wells Fargo are also testing uses for Amazon Echo. The Capital One service, which started this month, is the first time a credit-card company has been involved. Capital One allows users to check their credit card balance, review recent transactions, pay their credit card bill and perform other tasks simply by talking to the device.
Topic 4: Grand Canyon Bank Withdraws Charter Application
Start time 24:54
The proposed Grand Canyon Bank made it as far as the second stage of bank formation before owners, Grand Canyon Partners Inc., decided to withdraw the de novo charter application from state and federal consideration. The group cited return on investment concerns.
Watch for episode 4 of This Month in Banking to be released on Wednesday, April 27, 2016 and a new episode on the last Wednesday of every month.
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