Tag: Single Close Loan

Making Constructions Loans Much More Profitable

Increasing Lending Profitability

Let’s Make a Deal was a game show that originated in 1963 and starred Monty Hall. Audience members were offered a gift and then asked if they want to trade it for another gift of unknown value. Hilarity ensued when we watched people trade luxurious Hawaiian vacations for a pack of goats.

How Your Bank Can Make Construction Lending More Profitable

Construction Lending

Construction and Land Development loans (C&D loans) drove a substantial portion of the loan growth at community banks between 2000 and 2007, especially for banks under $2B in assets. While C&D loan volumes bolstered total loan growth, these same loans resulted in substantial detraction from risk-adjusted return on equity (ROE).  In fact, C&D loans were one of the major causes of bank failures from 2009 to 2011.  Compared to their peak in 2007, current C&D loan portfolios are relatively small.

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