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Make No Mistake, RBAZ is Lending!


By Amy Lou Blunt, EVP and Chief Credit Officer

There isn’t a day that goes by without some article or news story about how a weakening commercial real estate (CRE) sector will undermine the entire banking industry, but particularly, small banks. While office vacancies are up, initially from the non-return of workers post-pandemic, CRE represents very diverse market and industry segments.

It’s true, some large cities do have an inordinate amount of vacant office space, and labor continues to be an issue across the board. These factors have led a few banks to announce they are suspending their commercial real estate lending. Let me assure you, we are not.

RBAZ continues to have a strong pipeline of CRE prospective loans, representing a broad spectrum of industries that are more resilient. Valuations have not suffered geographically, and CAP rates remain stable. While the value of the property is certainly a factor in securing a CRE loan, there are many more elements a banker considers when extending a loan.

I have seen anywhere from three to seven “Cs” of credit. I have based my career on 5: character, capacity, capital, collateral and conditions. Every bank or banker may weigh these in different proportions, but the most critical of all, in my book, is character.

What really matters is you. You know your business and how to run it. You know your cash cycle – when it runs thin and when it flows. You know the people that work for and with you every day, their strengths and where you can coach improvement. And most of you have been through many economic cycles, both at the heights of prosperity and the depths of recession/correction. This will take you far in meeting whatever the prevailing economic cycle brings, and this is what your banker looks for and relies on.

Yes, there are the unknown and out-of-your-control events that could be looming, in reality or merely perception that becomes reality through the media broadcasting opinion as fact. Either way, if or when that economic tsunami hits, you are well-prepared to grab the nearest palm tree and hang on until the waters recede. And your RBAZ banker will be there with you.