TLDR:

Brandon Box, Southwest Florida Region President for Cogent Bank, discusses the changes in the banking sector and how community banks offer more flexibility and personalized service to their clients. The banking industry faced challenges in 2023, including the March banking financial crisis and rapid interest rate hikes. These events led to a perception of systemic issues in the industry, causing smaller banks like Cogent Bank to focus on reassuring their clients and offering individualized support. Community banks, unlike larger institutions, have the ability to quickly adapt and provide personalized solutions to their customers’ needs. Box emphasizes the importance of maintaining a strong relationship with your banker and regularly reviewing your banking strategy to ensure optimal success for your business.

Key Points:

• Commercial lending in the banking sector has undergone significant changes in recent years.
• The March banking financial crisis and rapid interest rate hikes in 2023 caused uncertainty and anxiety among customers.
• Community banks, like Cogent Bank, were able to provide reassurance and personalized support to their clients during these challenging times.
• Smaller banks have the advantage of flexibility and the ability to pivot quickly to meet their customers’ needs.
• Building and maintaining strong relationships with bankers is crucial in navigating the ever-changing business financing landscape.

In an interview with Karen Moore, Brandon Box, Southwest Florida Region President for Cogent Bank, discusses the changes in the banking industry and how community banks are adapting to meet the needs of their clients. He highlights two significant events in 2023 that caused turmoil in the banking sector: the March banking financial crisis and the rapid interest rate hikes. The failure of Silicon Valley and First Republic banks during the financial crisis created a wave of anxiety and uncertainty among bank customers, reminiscent of the 2008 recession. Although the crisis wasn’t systemic, perception played a significant role in the industry’s challenges. Box explains that smaller banks like Cogent Bank had to reassure their clients and offer individualized support to address their concerns.

The second major change in 2023 was the unprecedented pace of interest rate hikes. According to Box, the speed at which rates increased created a different environment for customers who had never experienced such rapid changes in their careers. This necessitated personalized coaching and guidance from bankers to help clients navigate these unfamiliar circumstances. Box highlights the value that smaller banks provide in this regard, as they have the flexibility to adapt quickly and offer tailored solutions to their customers. Unlike larger institutions, community banks can pivot faster and provide personalized support based on their deep understanding of their clients’ needs.

Moore emphasizes the importance of relationships in the banking sector. She praises community banks for their ability to offer flexibility and personalized service. Moore shares her own experience of choosing a local bank for PPP assistance, highlighting how community banks were able to step in when larger banks couldn’t. Box agrees and states that not all banks are equally flexible in adapting to changing circumstances. He advises businesses to sit down with their bankers and reevaluate their banking strategies to ensure they are positioned optimally for both short-term and long-term success. He emphasizes that the current environment has changed the earning potential of deposits and the structure and balance sheet management of accounts, making regular reviews and adjustments crucial for businesses.

In conclusion, navigating the shifting landscape of business financing requires a strong relationship with your banker. Community banks, like Cogent Bank, offer the personalized support and flexibility necessary to adapt to changing circumstances. Regularly reviewing and adjusting banking strategies ensures that businesses are positioned for success in the short and long term. By keeping your banking professional as part of your navigation crew, you can effectively navigate the constantly-changing waters of business financing in today’s world.