These have been troubling times for the banking industry. More banks were forced to close in 2009 than in any prior year in history. Already in 2010, nearly 50 banks have been shut down and the likelihood is that more banks will be closed in 2010 than in 2009. While the origins of the current chaos in the banking industry are numerous, the end result is an industry mired in confusion and searching for answers and help.
The natural temptation for many banks today is to reduce lending, adopt a defensive strategy, and simply try to survive until the economy returns to healthy condition. This strategy leads to overly aggressive tightening of credit standards and missed opportunities to extend credit when the risk is reasonable. A better path is for banks to return to the business of managing risk, a path the industry has unfortunately moved away from in recent years.
From a national as well as local perspective, continued reluctance to lend on the part of banks will be detrimental (if applied universally) as our economy tries to rebound. Economic expansion will not occur with credit widely unavailable, a possible scenario that policy makers must take into serious consideration.
Franklin Synergy Bank has chosen the better path of managing risk rather than following the trend of the banking industry. We are making loans to those who qualify and growing banking relationships in the community. Even in these trying economic times, our customers are building homes and expanding businesses, providing excellent lending opportunities.
Our commitment to meeting the borrowing needs of the community is best illustrated by our growth. Since we opened Franklin Synergy Bank in November 2007, we have grown our loan portfolio to over $169 million (as of March 31, 2010). Additionally, during that same period, we have originated over $187 million of home loans to local residents. These are impressive totals.
We recently raised new capital to fuel additional growth. While there are banks in the unfortunate position of being forced to raise capital to survive, Franklin Synergy’s additional capital will be deployed to meet developing credit needs in Williamson County.