What 2017 Will Bring to the Credit Picture - Prosper 2017

History always repeats itself. The question is, do we remember? That was the premise of this session at Prosper 2017. The panel of bank credit experts, Tony Hueston of Star Financial Bank and Sherri Slayton of Western Alliance Bank discussed this and other issues.

One significant area of discussion was around the large increase in CRE loans over the past three years. The OCC found that more than 406 banks saw their CRE portfolios double during the same period. The OCC commentary also indicated that underwriting standards have eased to levels similar to 2005-2007. Several members of the audience discussed the on-going process of managing portfolio concentrations and the need for strong stress testing capabilities.

When asked, “What is the biggest issue or concern FI’s will face in 2017 and 2018,” answers varied. Sherri Slayton discussed issues with BSA. Tony Hueston mentioned balancing loan growth goals with regulations, portfolio concentrations and other factors. All agreed that there is significant unknown variables with the future regulation environment.

All attendees agreed history would indeed repeat itself. The unknown variable was when. The best defense? “Stick to your guns” and only do loans that make sense!

Author Bio

As Director of Advisory Services, Stephanie Butler guides the implementation and strategic consulting for new and existing Baker Hill clients. Butler coordinates the Business Process Consultant team and is responsible for analyzing client goals and objectives and providing recommendations for best practices. Relying on more than 25 years of experience within the financial services industry, she successfully maintains a client base of banks and credit unions ranging from $100 million to $100 billion in asset size.

Butler earned her bachelor’s degree in Accounting from Davenport University and received her master’s degree in Management from Aquinas College.