Welcome to the Franklin Financial Network October 2010 eBulletin!
At Franklin Synergy Bank, we try to be exceptionally careful in building relationships. With the recent news that the recession effectively ended in June 2009, I’d like to share some thoughts with you on the past, present and future of residential real estate construction in our community.
The past 18 months represent the longest, most severe recession since the Great Depression. As residential real estate lenders, what we see in the construction industry is that many contractors and developers have already failed and most have at least been wounded.
There is a familiar adage in banking that says that the further a real estate decision is from the home office, the more difficult and dangerous that decision will be.
Our bankers do not know anything about lending in Atlanta or Las Vegas, so we simply don’t lend in those areas. Bankers who do lend outside their markets have paid a dear price for not understanding the community in which they are lending.
Over the past decade, many bankers forgot the basics of real estate lending. We forgot that if someone was going to invest in real estate, they need equity. The amount of equity in an investment correlates strongly with the success of that investment. Further, we forgot that bankers are lenders and not equity partners.
The construction industry participated in the economic disaster as well, building inventory that sales could not support. With so many bankers no longer willing to say no, many builders and developers borrowed more than they could pay back under the erroneous impression that real estate values always go up.
Timing is Everything
If we truly are in a post-recession environment, my view is that, barring a political miracle, we may be in for a long, slow recovery period. The good news is that there is no better time for real estate bankers to be in a lending mode. And while the ability of banks to lend into the recovery is hampered by the tight lending policy of banking regulators, it is not only possible to lend now, it is critical that we lend now to support the recovery.
Additional good news for borrowers comes in the form of interest rates, which remain at record lows. Good or bad, we have had a stable rate environment since December 2008. Rates will increase at some point, but it seems obvious that the Federal Reserve Bank is intent on keeping rates low as a strategy to help the national recovery.
We have lost many of the smaller builders. Those left to lead us out of the recession will be the small builders still in business, some regional builders and national builders. All builders must learn what the market demands and build accordingly. They must learn to manage their risks as they ask banks to lend to them.
The economic landscape has changed substantially. To be successful we must incorporate the changed business environment into our strategies and remake ourselves. Banks must help clients make a plan for their future; a plan that they can actually execute. We must help clients manage their balance sheet and reduce their risk.
At Franklin Synergy, our competitive difference is that our bankers are actively seeking real estate lending relationships and opportunities.
Builders and developers should not hesitate to approach us for loans, as well as advice and counsel. Potential home buyers and builders can also consult our bankers to explore home purchase and construction dreams.
As always, we thank you for your trust in Franklin Synergy Bank.
FRANKLIN SYNERGY BANK gives back in Hard Bargain Mount Hope!
On Saturday, September 25th, Franklin Synergy Bank was fortunate to be able to give back to our community through a work project in the Hard Bargain Mount Hope neighborhood. Our project was coordinated through Hard Bargain Mount Hope Redevelopment (HBMHR), a grassroots, non-profit organization seeking to restore and revitalize the historic African American neighborhood. The neighborhood is located on 15 acres, two square city blocks in downtown Franklin and has more than 80 households.
More than thirty Franklin Synergy Bank employees and family members completed projects on several streets in the Hard Bargain neighborhood. Projects included yard work, minor construction and general clean-up.
We were delighted to be able to spend some time working with HBMHR, a dedicated group of volunteers involved in a very worthwhile effort. Our Columbia Avenue headquarters is very close to Hard Bargain and we believe in neighbors helping neighbors.
The work effort was organized by Franklin Synergy’s Al Dorsey and HBMHR’s Rehab Coordinator Joe McCallum. HBMHR’s New Construction Foreman John Murphy was on hand to provide a historical overview of Hard Bargain and to supervise the work projects.
“It was a blessing to have Franklin Synergy come out to work with us in Hard Bargain,” said HBMHR Rehab Coordinator Joe McCallum. “They’re part of the neighborhood now.”
Congresswoman Marsha Blackburn Visits Franklin Synergy
On Monday, Oct 4th we were delighted to welcome 7th District Congresswoman Marsha Blackburn to our Columbia Avenue headquarters. The Congresswoman visited with the Franklin Synergy Management team and several Directors to review and seek our views on recent and pending financial regulatory changes. As community bankers, we are keenly aware of the impact of recent and proposed financial regulatory changes.
FRANKLIN SYNERGY BANK TRAVEL CLUB NEWS….
A San Antonio Christmas!
December 1-5, 2010
Price Per Person: $1,799 double - $1,649 triple - $2,249 single
A $200 deposit per person is due when making your reservation
11-Night Southern Caribbean Cruise
January 23 - February 4, 2011
Springtime On The Gulf Coast
March 25 - April 1, 2011
- The New Orleans School of Cooking
- Jazz Brunch at the Court of Two Sisters
- World War II Museum
- Blaine Kern’s Mardi Gras World
- Bellingrath Gardens & Festival of Flowers
- Beauvoir: Jefferson Davis Home
- USS Alabama Battleship
- Pensacola Beach
- Blue Angels
- National Naval Aviation Museum
- Beau Rivage Resort and Casino
- AND MUCH MORE!
Cost Per Person: Double $1999 - Triple $1849 - Single $2499
Deposit: $100 per person to secure your reservation
Final Payment: Due no later than December 13, 2010
Reservations are being accepted and the tour will close on December 13
We look forward to the opportunity to earn your future business at Franklin Synergy Bank. You may reach your Franklin Synergy banker at (615) 236-BANK (2265) or on our website at www.franklinsynergybank.com. Franklin Synergy Bank has 2 locations, our downtown Franklin headquarters at 722 Columbia Avenue and our Cool Springs branch at 3301 Aspen Grove Drive, Suite 106. In addition, our Franklin Synergy Mortgage office is open at 7101 Executive Center Drive, Suite 100 in Brentwood. We appreciate your continued interest in Franklin Synergy Bank.