Charting A New Path to Loan Diversification

Getting Started with CSI

After roughly 40 years with its legacy core banking system, Community Spirit Bank of northwest Alabama and northeast Mississippi knew it was time for a change. They chose CSI’s NuPoint core platform and its broader suite of solutions to meet technological demands and a challenging interest rate environment.

Emily Mays, the bank’s vice president, chief administrative officer and senior marketing director, describes the turning point by saying that technology-wise, they knew they were at a point in which they needed to diversify their systems and determine who could carry them forward as a partner. She adds that CSI’s representatives “were our kind of people, and that really played out as we looked at the different options.” When it came down to who was answering the bank’s questions, Mays reflects that CSI answered in a way that served the bank best and had its best interest at heart.

After the institution finalized its decision, CSI conducted an onsite core conversion. According to Mays, CSI accompanied the bank every step of the way. She also emphasizes that their new partners made all the difference throughout the first couple of weeks, setting the bank’s staff up for success and ensuring it stayed seamlessly operational throughout the transition.

Now confidently a CSI customer, Community Spirit Bank focuses on staying the “first name basis kind of bank” they have always been but better equipped to meet their customers’ needs. Mays and her team are especially excited to continue enhancing their lending strategy and offering new products and services with CSI. “As they have new technologies coming out, we’re able to add those on easily,” she says. “And it doesn’t feel like such a hard lift for the bank to get that new technology up and going.”

Joining a Robust Lending Network

The CSI Loan Marketplace was chief among the technologies Community Spirit Bank eagerly adopted. Given lending’s perennial status as a revenue driver, the institution needed an innovative solution for managing balance sheet risk and return. Fortunately, as a newly minted CSI customer, it could now access a nationwide digital market to do just that.

Available to all CSI customers at no cost, the CSI Loan Marketplace connects potential loan buyers, sellers and participants to conduct business with one another. Made possible through CSI’s partnership with Community Capital Technology, this highly liquid digital exchange helps institutions manage balance sheets while expanding loan sourcing and distribution.

The potential appealed to Community Spirit Bank’s overall strategy and business needs. Mays says, “It’s a difficult rate environment and we needed some ancillary opportunities available to us should we need some support on the balance sheet.”

The platform connects regional and community banks and provides access to additional third-party originators and investors across the country. In so doing, institutions can more easily overcome geographical constraints and collaborate with other financial institutions. For many banks, the Marketplace poses an opportunity to deploy liquidity, streamline procedures and lower credit risk. For Community Spirit Bank, it also represented an opportunity to diversify their portfolio, increase income and supplement their existing balance sheet strategy.

According to Mays, that access has been a gamechanger: “Since we’re already set up with Loan Marketplace, we easily have a whole network of CSI bank partners we can call on to partner with us on those loans, buy those loans, help those loans be successful for our customers and also keep the bank balance sheet strategy where we want it to be moving forward.”

Making More Informed Decisions

Among the potential opportunities for new interest income and a lower risk profile overall, Community Spirit Bank highly values the CSI Loan Marketplace’s strategic market insight. The easily accessible market and performance data help Community Spirit Bank be strategic in who they partner with.

“I am having banks pull me aside, ‘I know you just converted, tell me everything I need to know. We are down to the final two cores; we are making a decision. Would you recommend CSI?’ And it is an easy yes! Absolutely!”

Emily Mays
Vice President, Chief Administrative Officer and Senior Marketing Director, Community Spirit Bank

That strategic insight includes performance monitoring against peers and interactive visualizations of call report information for all FDIC- and NCUA-regulated institutions. These analytics offer performance metrics, allocation, competitive analyses and actionable insight for Community Spirit Bank and other members of the CSI Loan Marketplace community.

Mays points out that market data itself is already a significant contributor to how the Marketplace supports lending partnerships, as it makes decisioning more straightforward. “You can be watching for different partnerships you want to be a part of by looking at data and analyzing banks,” she says. She adds that visibility helps assuage regulatory concerns and eliminate potential partners they know won’t be a fit.

That synthesis of data and flexibility helps give Community Spirit Bank peace of mind. With the platform, it is equipped to make informed decisions should it need to pursue new lending opportunities. It can also sell opportunities to non-restricted lenders, transition portfolios that may not be optimally aligned or source partners that have similar underwriting criteria. Finally, the marketplace opens opportunities to participate in loans that balance sheet parameters and today’s interest rates would have otherwise inhibited.

According to Mays, “That’s a very good spot to be in in this difficult rate environment when you really don’t know one day to the next…how your net interest margin’s going to look, and how you want to diversify to make sure the bank stays right within your strategy and the projections you set forth each month.”

Freedom from Buyers’ (and Sellers’) Remorse

Mays is optimistic about the opportunities and flexibility that the CSI Loan Marketplace offers.

“The best part of partnering with the CSI Loan Marketplace was that we’re well positioned and ready. Should we need to do some portfolio diversification or balance sheet strategy that we were not ready to do as quickly as we needed to, we’re already prepared to do that immediately which benefits our customers.”

She’s even more emphatic regarding the partnership with CSI overall, saying, “I am having banks pull me aside to say, ‘I know you just converted, tell me everything I need to know. We are down to the final two cores; we are making a decision. Would you recommend CSI?’” For Mays, the answer is an easy yes.

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