Blog Entries tagged 'Talking Credit'

ORACLE OF OMAHA COULD HAVE BEEN TALKING TO LENDERS

eoleary — Thu, 11 Mar 2010 00:00:00 +0100

Warren Buffett's shareholder letter is required reading for credit officers.

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Two weeks ago, Warren Buffett, the "Oracle of Omaha," commented on the successful year that his company, Berkshire Hathaway, enjoyed in 2009. In his letter to stockholders, he shared his beliefs with new investors. The advice hasn't changed much over the years, so it's well that we bankers take a look, too, and find if there are principles that we can [...]

TWO STEPS FORWARD AND ONE STEP BACKWARD

eoleary — Wed, 03 Mar 2010 00:00:00 +0100

Kay the executive secretary, St. Ignatius of Loyola, and Ed O'Leary on better management of your career...and yourself

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Many bankers I speak with today feel that their careers are in a backwater.

Banks and bankers are taking a drubbing by the politicians and the public.

Lending demand is not robust and there's genuine concern about the future of the industry.

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ARE YOU HAVING ANY FUN?

eoleary — Wed, 24 Feb 2010 00:00:00 +0100

Take a break from today's credit headaches, and let Ed tell you how lenders used to be when "grim" wasn't the rule.

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Dwight Eisenhower used to say that you should never take yourself too seriously, but always take your work very seriously. Some of you reading this may be Rotarians, as I am, and the new official Rotary line is to be sure to have some fun. That's hard sometimes, as bankers are supposed to be pretty straight-l [...]

DO BANKS REALLY WANT TO LEND? NOT A SIMPLE QUESTION

eoleary — Tue, 16 Feb 2010 00:00:00 +0100

Political posturing aside, what fundamentals lie behind the debate?

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Do banks really want to lend money, or not?

There are a variety of ways we might pose this question. But how to do it in an honest and frank political dialogue seems to be an elusive goal. The only heat lately about whether banks can or should lend more seems to be from the politicians This has the effect of reducing the lending [...]

CIT'S HISTORY AND ITS LESSONS FOR LENDERS

eoleary — Thu, 11 Feb 2010 00:00:00 +0100

John Thain's appointment to CIT executive suite gets Ed thinking about which lenders take which risks

Recently CIT Group announced the election of a new Chairman and CEO, John Thain. Thain is the former CEO of Merrill Lynch and presided over his company's acquisition by Bank of America in January of last year.

I became interested in the CIT situation a few months ago when the company's problems burst into the headlines. I [...]

MENTORING DOESN'T JUST MATTER TO THE NEW LENDER

eoleary — Wed, 03 Feb 2010 00:00:00 +0100

How an unhappy tale of a "lone ranger" underscores the importance of being able to be a mentor

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My
post Christmas mail brought me the news that Roy, one of my bosses at
The Bank of New York, had died this past summer. He was in his early
80s and had retired after a full and distinguished career as a credit
professional and branch administration manager. I was the beneficiary
of the great gift of his advice and personal o [...]

LENDING ETHICS BEYOND THE LOAN POLICY

eoleary — Wed, 27 Jan 2010 00:00:00 +0100

Credit is a finite quantity. Are you always making the best choices?

Just about every loan policy I've ever read includes a statement on the purpose of a loan. These include such bromides as: "We encourage loans for all worthwhile, productive, and legal purposes . . . ."

This can be more of a challenge than it reads, if one adds the sometime ambiguous "ethical" to the checklist. This gets at the broader job and mission of a com [...]

BANKERS' PAY: A PROBLEM OR AN ARTIFACT?

eoleary — Thu, 21 Jan 2010 00:00:00 +0100

A bit of banking history puts perspective on evolving pay issues

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When I started out at The Bank of New York many years ago as a brand-new college graduate, I honestly didn't think much about the long-term career aspects of being a banker.

There was no sifting of priorities, evaluation of positives and negatives, or any real database I'd acquired about what I wanted to do. I'd faced two years in the Army and wa [...]

PART 3: AIMING FOR A BETTER 2010

eoleary — Wed, 06 Jan 2010 00:00:00 +0100

Ed wraps up a three-blog series by building goals for lenders on the foundation of lessons learned from 2009

Conclusion of the series: Share your views now!

An article in The Wall Street Journal the other day talked about the difficulty of keeping New Year's resolutions. Less than 20% of all the resolutions seem to have "sticking power." We'd probably do better by concentrating on building and reinforcing [...]

PART 2: SEVEN MORE THOUGHTS ON WHAT WE'VE LEARNED

eoleary — Sun, 03 Jan 2010 00:00:00 +0100

And these seven lessons come down to one inescapable conclusion...

Second in a series

Before turning to New Year's resolutions as we inevitably must after enumerating our lessons learned, it seemed important to list a few more of these lessons that were omitted from the earlier list of Dec. 17, 2009.

1. Past performance is not always a reliable indicator of future activity.

Oft [...]

PART 1: SIX LESSONS TO TAKE AWAY FROM 2009

eoleary — Thu, 17 Dec 2009 00:00:00 +0100

A popular morning news and talk cable channel show regularly ends its program with a question to its talking heads and guests: “What have we learned today?”

Part 1 of a three-blog series

On the show, this is meant to be more facetious than serious. But for bankers, the question of what we’ve learned in the more than a year of the current financial crisis is an urgent one.

So, as we approach the end of this [...]

WHY CORE DEPOSITS MATTER TO LENDERS

eoleary — Thu, 10 Dec 2009 00:00:00 +0100

There was an article the other day in the national financial press on how FDIC is having difficulty generating interest for some banks destined for closure in the immediate future. This is due to a handful of primary reasons that bear directly on the future of community banking and community banking business models.

What makes these banks ugly

First, many of these very sick banks have real estate concentrations in their portfolios and real estate deals, e [...]

CRE GUIDANCE: EXAMINERS GAVE YOU A ROAD MAP

eoleary — Thu, 03 Dec 2009 00:00:00 +0100

Yes, the CRE rules aren’t perfect. But they’re useful.

Nearly a month after the federal banking regulators issued their guidance of on prudent commercial real estate restructurings, a healthy level of uncertainty surrounds the likely outcome of this guidance. Many doubt that it will represent any regulatory “relief” for lenders.

Closer look at key concerns

The concerns fall into several categories and, to a degree [...]

FOR YOUNG BANKERS ONLY: DO YOU HAVE TOMORROW’ SKILL SET? OR EVEN TODAY’S?

eoleary — Thu, 19 Nov 2009 01:00:00 +0100

Back from a meeting with the nation's ag bankers, Ed returns with food for thought for young lenders. (Bosses ought to read this too.)

I spent the last few days attending and presenting at the ABA’s National Agricultural Bankers Conference in San Antonio. It was enjoyable to be among bankers in a segment of our industry which has seen some reasonably good economic times while so many others have been in turmoil or worse.

One presenter, Dr. [...]

FIVE REASONS WHY TODAY’S WORKOUTS ARE DIFFERENT

eoleary — Thu, 12 Nov 2009 01:00:00 +0100

Survivors of today's challenges can learn both credit and ethical lessons

On Monday, Nov. 16, I’m presenting at the ABA’s National Agricultural Bankers Conference in San Antonio. My subject for the morning is “Organizing for Loan Workouts: the Long Road,” and in the afternoon I’m co-presenting with my business partner on “Ethical Risk—Life in the Glass House.”

What does one subject have to do with [...]

EXAM COUNCIL GUIDANCE HOLDS OUT HOPE FOR CRE LENDING

eoleary — Thu, 05 Nov 2009 01:00:00 +0100

Ed brings a seasoned eye to the regulators' new CRE guidance, and finds promise.

Plus a special banker alert

Bankers: See the special alert at the end of this column after you read Ed's analysis.

Several years ago, when I had a house for sale (as I do now), I received a card from a friend that said, “Your prayers are always answered. Sometimes the answer is ‘no’.”

[...]

LENDER LIABILITY LURKS BEHIND TODAY'S CRISIS

eoleary — Wed, 28 Oct 2009 01:00:00 +0100

Risks lie not only in what you've told errant borrowers,

but in what you've let them get away with in better times

In my nearly 45 years as a banker, lender liability has been particularly topical twice—including right now.

The Farah case, and its unfortunate effect

The first time in my memory was in the late 60s. It involved a group of banks in Texas and a clothing manufacturer, Farah Manufacturing Company. T [...]

TEN TIPS TO SPOT BORROWER TROUBLE

eoleary — Thu, 15 Oct 2009 01:00:00 +0100

You can spot trouble coming, if you look and listen. Here's how

Everyone is talking about transparency these days, even FRB Board of Governors Chairman Ben Bernanke. So it’s something we need to understand and it’s not hard to do. Our actions should be understandable on their face. What you see is what you should get.

The transparent lender

We are very transparent as human beings. Most of us operate as if there are only two categories of s [...]

GOT THE BLUES? GO SEE A CUSTOMER TODAY--AND TOMORROW

eoleary — Wed, 07 Oct 2009 01:00:00 +0100

You won't produce a better tomorrow just from behind your desk. Ed says, get up, get moving, and visit your borrowers today

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You can meet blogger Ed O'Leary in person when he speaks about loan workouts and also about corporate ethics at ABA's National Agricultural Bankers Conference, Nov. 15-18, 2009, San Antonio, Texas.

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Last week we discussed that, for many practitioners today, banking hasn’t been a lot of fun lately. Young lenders witho [...]

A CURE FOR THE LENDER'S BLUES

eoleary — Thu, 01 Oct 2009 01:00:00 +0100

Are you a young lender depressed by today's troubles?

Ed's got a message for you. And if you're younger than 100,

you should hear it.

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Remember when banks used to appear to be friendly and helpful?

Most of us still are, of course. But our public image, as an industry, has been devastated by irresponsible actions of a relative few. They have “distinguished” themselves by reckless risk taking and exorbitant compensat [...]