The Mind of a Commercial Lender
Have you ever wondered what it is that your banker is really looking for when they talk with you about a credit request? Well, wonder no more, I invite you into the brain of a commercial lender (enter with caution as it is a scary place!)
- Have you developed and maintained an ongoing business relationship with your banker? Bankers need to have an ongoing dialogue with clients to best serve their needs. We are here to provide money, certainly, but we are also here to establish a long term relationship whereby we can help our clients achieve their goals. Whether it is remote deposit or online banking, ACH or wire transfers, your banker has the products and services that can help our customers grow. But we cannot do that if we do not know what those goals are.
- Does your business need a loan -- or an equity infusion? Banks are interested in making loans; they are not interested in being the owners of the business. Equity is that device that helps a business weather a storm, loans are those tools that help a business grow and operate. The two are mutually exclusive. Banks are in business to make loans. Equity funds should come from the business owners.
- Can you clearly explain your firm’s “value proposition?” If you cannot explain why a business should do business with you then stop what you are doing, figure that out, and then resume whatever it was that you were doing. Why should someone buy from you as opposed to your competition? That question needs to be clearly (and concisely) articulated first!
- Do you have a plan that covers the good, the bad, and the ugly? Things happen, and sometimes you have to figure out what that means for your business. To always assume the “good” means that when the “bad,” or worse yet, the “ugly” happens the business isn’t prepared to handle the outcome. So . . . what are you going to do in your company if it gets “ugly”? If you can answer that question you will be in much better shape to help your banker help you.
- Have you developed at least two ways to repay the loan? Bankers have an axiom that goes like this “only cash repays loans.” There, that is our great big secret. Now that you know that then you know how we view the primary source of repayment. But how else can the loan be paid off if the cash isn’t being generated for some reason (see point #4 above). If you can demonstrate how else the loan might be repaid you have helped the bank and they in turn can be more helpful to you.
So now that you have seen into the mind of a commercial lender I hope you will take away from this discussion that it isn’t too scary a thought process. Indeed, the more certainty that the banker has that the loan will be paid “as agreed,” the more likely that you will not only receive a favorable loan decision, but also the best interest rate.
Your MutualBankers are here to help you accomplish your goal. Get started by contacting a MutualBanker near you!
Chris Caldwell is Senior Vice President of Business Banking for MutualBank.
Giving is the Spirit of MutualBank
Winston Churchill said:
“We make a living by what we get, but we make a life by what we give.”
Giving is the spirit of MutualBank. We have four values which guide how we do business: Character, Compassion, Class and Competition. MutualBank has had a long standing history of giving back to the communities we live and work in, but our Jeans Day program goes beyond a company gift. It’s an opportunity for MutualBank employees to ‘make a life’.
Inevitably when you talk with someone who runs a nonprofit, they always say their greatest need is money. Our Outreach Committee found a way to meet the greatest need of the local nonprofits while giving our employees the opportunity to make a difference. The Outreach Committee decided to incorporate a monthly "Jeans Day". Jeans days occur on the last Friday of the month and it costs an employee at least $5.00 to participate. The benefit to the employee is that they get to wear jeans to work. Bankers are typically traditional and conservative, so this is a step outside the box! The benefit to our community; however, is greater than we imagined.
A bank of our size, $1.4 billion, typically has a plan for sponsorships and certain organizations they support year after year. The best part about the Jeans Days is that the beneficiary of the funds, for each of the counties we serve (Delaware, Randolph, Grant, Wabash, Kosciusko, Elkhart, St. Joseph counties) are local to each county. Some months, the funds go to a national effort, like the American Red Cross, but the funds stay local in each of the communities we serve. Other months, the funds are given to different nonprofits who serve a certain segment of our community footprint. Either way, the funds, with the exception of one Jeans Day in 2012, stay in the county in which they were raised.
The one month I am referencing when funds did not stay in the counties we serve was in March 2012. In early spring, there was a horrible tornado in Southern Indiana, near Henryville, that leveled the town. It was one of the most devastating natural disasters our state has seen. As a result, we had an “Emergency Jeans Day” to help our fellow Hoosiers in their time of need. Proceeds from this effort went to the American Red Cross to aid those Hoosiers in need.
We believe by giving our employees the opportunity to show compassion, we are helping them ‘make a life’. We are proud of our employees and the impact they have on the communities we serve. It is our pleasure to share that in 2012, our employees have helped over 20 different organizations raising $14,264.03!
If I Knew Then What I Know Now
I hope I have become wiser as I have aged. For I have surely aged! I work in Human Resources & Training at the bank, and we had a great manager’s round table discussion the other day, and I had possibly the best question that has ever come up in one of our sessions. A young, very new manager asked: “If you knew then, what you know now (about managing people), what would you do differently?”
And every manager in the room had an answer. This was a great reflective question. We had engaging and wise comments shared, and so, I am going to turn this question inward, twist it a little, and share: “If I knew then, what I know now, about preparing for my financial future, what would I do differently?”
Yes, I was a not-so-smart-but -thought-I-was-da-bomb-college-graduate-newlywed-burgeoning-career person, way back when, and as I am now aiming for some financial goals so I can live comfortably in a few years, here’s how I answered my own question:
If I knew then, what I know now, I would do these things differently, to plan for a more secure financial future:
- Spending a retirement payout instead of rolling it over. When I changed jobs, I’d have NOT spent my retirement plan money on a one-time vacation to Florida. I’d have rolled it over to an IRA, or something…. I took a tax hit then, and have 4 years less retirement savings. Geesh…
- Accepting or applying for multiple credit cards. I would not have kept taking credit cards from stores, and big banks, and using them. It took me a long time to dig out, and using the credit cards became a very bad habit;
- Not officially closing those open credit cards after paying them off. I would have closed those credit cards and notified the stores/banks, not just cut them up as I paid them off. Those all show up (or they did) on my credit report, and could have adversely affected my credit score;
- Immediately rolling dividends back into stock. I got a tiny bit of a stock inheritance from a great uncle. I spent those first dividend checks. If I could go back, I would have rolled those over back into the stock starting the moment I got it.
- Taking the time to learn, really learn, about my company benefits. What all did I leave on the table?
- A company match in a 401(k) – that’s FREE money I might have walked away from;
- Understanding and utilizing Flexible Spending Accounts to reduce my taxable income – especially when I was paying for child care;
- Staying with a company until I was fully vested in a pension or other retirement plan – I left 6 months shy – twice in my career. Darn it!
- Understanding my health plan and what was covered and not covered. Did I miss some benefits?
Hindsight is 20/20. So, hopefully I’ve learned. If nothing else, maybe my ‘shoulda coulda wouldhave’s’ will help someone else make better decisions.
Practice Safe Holiday Shopping
The holiday shopping season is in full swing! Are you ready? Do you still have lots of shopping to do? Have you already shopped on Black Friday, Small Business Saturday, Cyber Monday, or all three? Chances are that many of us still have plenty of shopping left to do before Christmas and that will be inter-mingled with work and family gatherings as well as travel both short and long trips.
In the middle of all of this activity, it’s very important to keep track of your holiday spending habits especially when shopping online and travelling over the holidays. Doing so will help protect your money and reduce the risk of fraudulent transactions occurring.
Following these guidelines can make your holiday shopping and travel more financially secure:
- Use a low limit credit card for online shopping. Your liability is $50 on fraudulent charges using your credit card.
- Know who you’re shopping with. Be leery of unknown or obscure shopping websites. Stick with well-known shopping sites from reputable retailers.
- If it’s too good to be true…it probably is. Don’t fall for incredibly cheap or free deals commonly seen on Facebook.
- Look for the padlock and https on your Internet browser window. Secure online shopping sites should use the SSL (Secure Sockets Layer) technology for securing online transactions. You should see a padlock icon at the bottom or top of the browser status bars that you are using and https in the address bar.
- Make sure that computers and smart phones used for online shopping are patched with the most up to date software.
- Try not to conduct online shopping on public WiFi networks.
- Use anti-virus / anti-malware software on your PC and smart phones and make sure they are updated. This can help prevent a virus infection if you happen to end up on a bogus shopping site.
- Make sure you use online banking to check your shopping activity and don’t wait for a mailed statement to arrive to verify online shopping activity. By the way, have you signed up for MutualBank’s online banking? Learn how to get started.
- Use your statements, MutualMobile or MutualBank’s Personal Online Banking to review transactions…are you signed up for eStatements yet? Get your statements quicker via email!
- View your cleared checks to make sure they were not altered in any way to change the payees or dollar amounts.
- If you swipe your card, check the card reader especially on gas pumps, ATMs, and other self-service payment terminals for card skimming devices…see ABC News “Credit Card Skimming Tips To Protect Yourself” for more information. It is simple…just lightly tug on the card reader to ensure that it’s secure before swiping your card. A card skimming device will easily pull off as it’s usually taped or lightly glued on top of the existing card reader. If the reader pulls off do not use the machine and report it immediately to authorities.
- Travelling over the holidays and planning on using your MutualBank debit card? Make sure you Call Before You Travel to ensure uninterrupted debit card use!
Remember that you are the best defense against online shopping fraud! If you suspect that you have been scammed please call MutualBank Customer Support at 800-382-8031. Also please report any online fraud to the Internet Crime Complaint Center.
Have a safe and happy holiday season from MutualBank, helping you live a better life!
This post is written by John Mickle, Risk Management and Compliance at MutualBank
The Fiscal Cliff and Long Term Investments
If it bleeds it leads! That supposedly is an old adage of the news reporting profession. I don’t know if hard-nosed newspaper editors ever did actually say that to fledgling reporters any place other than in a film noir movie script but it does symbolize a true human tendency. We pay attention to negatives.
Why we do it, I don’t know. Disasters and crime, personal scandals of celebrities, politicians and the powerful are hot topics. Weather reporters breathlessly (and endlessly during my favorite TV programs) train their radar on every wind that shows the slightest circular motion during every thunderstorm that blows through regardless of how mild. And we watch.
It’s the same with financial news. You still occasionally see an investment person on television today bragging about how they predicated the stock market crash of 1987! Cable TV hosts, authors of magazine articles and investment newsletter writers thrive on highlighting negatives because it gets your attention and helps them sell the commercials, ads and newsletter subscriptions from which they make their living.
Today we hear about the fiscal cliff approaching with the New Year, the sovereign debt crises in Europe, the declining U.S. dollar, geo-political upheavals abounding, the greater regulatory burden being put on business, and the ups and downs of the stock markets which appear to be of greater magnitude than before. This gloomy haze of negative news and focus on the short term makes it easy to lose sight of the long range reasons to be invested in the stock market.
Most of the financial news media is geared towards short term trading otherwise, why would you need to watch every day? If you own a local dry cleaning business or florist shop you don’t pay much attention to how much you could sell your business for on any given day. Your focus is on taking care of your customers so you can increase sales and profits and continue to pay yourself an income that rises over the years. If you do that, the market price of the business will also increase over time.
For most people, investing in stocks should be the same. Stocks represent businesses that you own a piece of. Selection of good businesses that take care of their customers and have rising sales, profits, and dividends (income to the owners) should be the primary concerns. Day-to-day or quarter-to-quarter fluctuations are generally insignificant in the long run. This doesn’t mean you don’t keep an eye on value or change investments from time to time just try to focus more on your long term objectives.
There are many, many companies in the U.S. and elsewhere that have survived depressions, recessions, world wars, socialist governments, and other adversities while paying a cash dividend every year for 50, 60, or 100 years or more. They followed the short term ups and downs of the market but generally are worth much more today.
A business-owner approach to investing with a long term focus may make you lose interest in most of the financial news. Maybe that’s a good way to go ahead…live a better life.
This post is written by David Riggs, Vice President and Trust Investment Officer of MutualWealth Management Group.
A Season of Thanksgiving
Someone I know well told me that I was a rather odd duck, both very philosophical yet entertained by some of the most mundane and simple of things (read sophomoric humor!). It is with that premise that I ruminate on the whole season of Thanksgiving. While some of the auspices of how it started may be left to the historian to argue, it does seem to me that we now have a holiday whose sole purpose is to cause us to reflect for a moment on those things for which we are truly thankful.
I have also noticed many Facebook friends are taking this period of time to express their thankfulness for various things each day apparently culminating in the holiday itself. While I am certainly glad for this, what strikes me is the fact that we have to create a holiday to remind us to be thankful. And so it is that I commit to a new resolution long before the New Year (a whole month!) to pause whenever I can and be in a state of thankfulness as often as possible.
So with that beginning, let me launch into the many things for which I am thankful.
- Family – I have a wonderful wife who I adore and continue to find to be the joy of my life, two daughters who are succeeding in their own careers, two dogs who show boundless joy when I get home, and of course, a brother, nieces, parents, in-laws, and others who make my life so much better.
- MutualBank – Wow, where to start. A great group of people, a bank that still values its ability to focus on the community, and an ethos that is second to none.
- MutualBank Clients – It is because of our phenomenal clients that MutualBank gets to succeed every day. Our clients are some of the most loyal customers that I have ever encountered and they do us proud every time they tell a friend what a great bank we are. I am truly thankful for all of our clientele.
- Friends – one of my insights into how good life is runs proportional to the deep friendships that my wife and I have developed – there is a direct correlation to the two.
- United Way – MutualBank is a heartfelt supporter of United Way as are many of my colleagues. Why? Because the United Way does great work in helping others that need it most and bringing together community partners to make our hometowns better for all. By the way, there are many other great community partners that MutualBank and its many team members support – part of our ethos of being true to our community bank philosophy.
- Health – yes, I’m getting older and the joints are not quite as supple, the muscles take a little longer to quit aching, and my brain doesn’t seem to remember as much (maybe because I have many decades of stuff in it now – I hope that’s it!). In spite of that, I’m still thankful that I can move easily and can still have deep and meaningful dialogues with friends and family. So I try not to complain about the aging process and just be thankful that I am where I am.
That’s my list; I hope that as we conclude the year that you take a moment to write down yours. When we approach things with an optimistic and thankful attitude, we find that the world is indeed slightly more positive and certainly more appreciative. I wish you a wonderful Thanksgiving and way in advance, a very Happy New Year!
Live a (Financially) Healthier Life
Healthy, wealthy, and wise….And the most important of these is, (you fill in the blank).
For me, it’s health. Those that have read my prior blog posts know I’m in that nefarious “over age 50” category. Physically, it’s true. Mentally, possibly but it’s debatable, especially If you know me! I believe being healthy deserves a closer look – it is closely tied to our financial freedom in many ways, and it deserves a post on our bank blog!
Our bank just completed a two-year health & wellness Get Fit Program. Health-conscious team captains were asked to lead employee teams that included family members. We kept track of healthy things that got our heart rate up from walking and running to playing volleyball just to name a few. Getting an annual physical (yes, men, this means you, too!), keeping a nutrition log, even coaching a child’s sport team earned us points. Our employees focused on doing healthy things hoping some of those things they did would become habits. Prizes were awarded a few weeks ago and our winning team will get some extra paid time off, cool logo wear, and the ‘bragging rights’ for this year’s event culmination.
Not only did we create new, healthier habits, we put up some pretty fantastic results too. At week 26 this year, we had 8 participants who had lost 10% of their total body weight and 4 more that lost 20% of their body weight. One employee stopped smoking, and 10 employees reduced one prescription (under physician care) previously needed due to health issues. Those are winning statistics, for me, and much more important than who won.
We will all have to seek ways to continue our healthy habits. I know the bank will support endeavors to keep this mindset at the forefront. We are generally a sedentary workforce, so any efforts can only bring positive results.
From the financial side of things, how can being healthier help? Let’s see, that former smoker is saving money they formerly spent on cigarettes, right? If they smoked 1 pack a week, that translates to $260/year in savings. If they smoked 1 pack a day, that equals $1300. It does start to add up. Similarly, the folks that were able to reduce one prescription medication as a result of being healthier gained back some financial rewards, too. I cannot analyze the numbers on that, but the facts prove the healthier lifestyle puts money back into the pockets of our employees.
As one of 80+ million Americans in the age 45-64 category (U.S. Census, 2010), health has become more important to me. Hindsight is indeed 20-20, and I only wish I had paid more attention to my health when I was younger. Now, I have to reduce weight, increase & maintain regular healthy activity, and pay much more attention to my eating habits. Had I done this as a 30-40 year old, I might be sitting differently. There are more people in my age group, 31% more according to the U.S. Census, 2010, than in 2000 and we account for more than a quarter of the US population. When our large demographic gets ill, or when we fail to take good care of ourselves, that can be detrimental in cost – of health care, to name just one.
Getting back to “just me”… I’m thinking more now about retirement and wanting to have fun when I do retire. I’m putting money into my 401(k), trying to pay down debt, preparing for ‘the teenager’s’ college expenses by contributing to a 529 plan and keeping some amount of ‘nest egg’ cash available to me for emergencies.
I look forward to both taking it easy in my “golden years” and enjoying travel time, family time, volunteer time and of course one of my favorites - future fabulous (old) girls’ trips. I won’t be able to have much of that fun if I’m overweight, tired, out of shape, and fighting more possibilities of disease that run in my family – diabetes, heart issues, cancer. Keeping myself healthier – er, getting myself healthier now can pay off for me when I get to retirement. Excuse me, I need to get up and get moving before it’s too late!
Email Phishing - Protecting Your Home and Small Business Computers
Whether you own a small business or use your home computer for financial activities, you need to be aware of Email Phishing which can ultimately lead to identity theft and corruption of your small business and home computers.
What is Email Phishing?
Phishing emails are crafted to appear as if they have been sent from a legitimate organization or known individual. These emails often attempt to entice users to click on a link that will take the user to a fraudulent website that appears legitimate. – United States Computer Emergency Readiness Team (US-CERT)
Common forms of Email Phishing
Phishing emails are becoming very personalized posing as your cable company, utilities, credit cards, mobile phone carrier, banks, and many more entities that you do business with on a regular basis. The most common threat of Email Phishing right now is malware. If you click on a link inside of an email that was intended for phishing; your computer can become infected with malware. The malware will attempt to steal your personal information, usernames and passwords to systems such as online banking.
Trigger events that can lead to Email Phishing
Here are some trigger events that fraudsters may try to leverage with Phishing Emails.
- Natural disasters (Hurricane Sandy, Southern Indiana tornados)
- Political elections
- Economic conditions
- Tax season
Here are some steps to take in order to protect you against Phishing.
- Make sure that email spam/junk filters are turned on and configured properly. Consult with your email provider or IT specialist for assistance.
- Do not click on links or open attachments in suspicious looking emails. Delete them immediately and tag them as spam/junk within your email system.
- Log into your known sites from your web browser to verify if an email is legitimate as the links in emails can be easily spoofed to go somewhere other than where it looks like it will go.
- Be leery of unsolicited emails asking for personal information or presenting links to click on in order to update account information, track orders, overdue bills, cancelled ACH/Wire transactions, etc.
- If something sounds too good to be true, then it probably is.
- Do not email sensitive information in email unless it is encrypted. Banks and other businesses should provide secure email systems to communicate regarding account information.
- Do not store usernames/passwords, account information, SSN numbers, or other personal information in your email systems as if you do become infected with malware it will attempt to scan your email for this information.
- Make sure that you have anti-malware/virus programs installed on small business and home computers and they are always updated and perform frequent scans.
- Make sure that you keep other programs such as Java, Adobe programs, Internet browsers, and other online programs updated with the most current patches.
More information about Email Phishing and Cybersecurity
Here are some good web sites to obtain more information about email phishing.
Information about anti-malware programs
MutualBank does not endorse the products listed below and are provided as examples of free anti-virus/malware detection and removal tools.
Remember, you can call us anytime. Let us know if you have questions or concerns for your bank accounts. Call 800-382-8031or email email@example.com.
Do You Dread Going to Work?
I thought about this after I listened to a very inspiring keynote speaker who gave a glimpse into her organization's culture. Culture, in my opinion, is a really fun word that somehow describes (without a formal written definition) the foundation of a company. It shapes how employees are treated, how employees work, how employees treat each other and how employees treat customers. Much like a family, each company culture is different; each has different expectations, rules and ideals. I realized during my nearly 13 years at MutualBank, I have been part of a caring, family-type culture, that wants its employees to be their very best.
Now, let's get back to my original question, do you dread going to work? I can honestly say I haven't and I don't. I admit, on occasion, I might have dreaded some aspect of the day, for example getting up in the middle of winter when it's dark, cold and I have to brave the icy roads. This, however, is no reflection on MutualBank. It's more due to my love for my warm bed and sleeping in.
What really struck me when listening to the keynote speaker is how managers should support, encourage and uplift the important things in their employees' lives - both personally and professionally. Thankfully, I work for a manager and company that does support and uplift employees in their professional and personal quests. Specifically for me, MutualBank provides me paid time off to pursue one of my all-time passions - Drag Racing. Yes, believe it or not, I work at a bank during the week and I am a high-speed drag racer on the weekend. Technically, I wear suits, on average, six days a week - one or two of those days just so happen to be a racing suit. But, I digress.
This type of culture and this type of flexibility from my manager and from MutualBank further invests me into my job and the company. I'm not the only employee who benefits from this culture. Several employees take time to volunteer, belong to philanthropic organizations, serve on boards or participate in a variety of other activities. It goes back to that culture I talked about earlier. MutualBank employees are encouraged and coached to pursue personal goals just as much as they are coached to achieve their professional goals.
Do you have a desire to achieve more, personally and professionally? If so, I would encourage you to check out a career opportunity at MutualBank Visit our career page and see if there is an opportunity waiting for you.
Equal Opportunity Employer
Using Social Media? Protect Yourself Against Fraud.
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Social media is great! We love to post our pictures, chat with friends and connect with companies and people with which we may have lost touch. However, we need to make sure that what we put on social media doesn't affect our security.
I'm sure you're asking me, "how could this happen?" Let me give you a hypothetical example.
Mary Jones has accounts at her local bank. She loves her online banking and bill pay for its convenience. Mary is a busy mother who doesn't have time to write checks and send in payments. Her local bank, who is very security minded, makes Mary set up security questions on her account so they can verify if Mary is the one accessing her account. Mary is very busy so she just does the normal security questions, mother's maiden name, etc. She doesn't want to, nor has time to think about it too much. Mary also loves social media and puts pictures of her family and pets on social media.
One day Mary goes online to check her balance and realizes money is missing. What happened? Did she leave her debit card somewhere? No, it's still in her purse! What happened?
What happened is that Mary chose easy passwords and security questions/answers. A cyber thief figured out Mary's password was her dog's name. And when Mary changed her passwords as her bank advised, the thief was able to get the new one because he knew the security questions. How did he get them, you ask? Her social media account! Remember, she posted pictures of her dog and of her mother, tagging her in the photos, which shows her mother's maiden name!
So what do you do? Get rid of your computer? Live like a hermit? No, I'm not suggesting anything that drastic. Here are a few tips:
- When choosing or creating security questions, make them something people don't know and won't know about you. (Consider providing a different answer to the security question than what the correct answer would be.)
- Make your passwords difficult to crack. Use letters and characters. Check and change them often.
- Be careful what you post on social media. Talking about your family is certainly OK, but if something you are posting is an answer to your security question, think again before you post.
Everyone loves social media. It truly is a great tool for connecting with others. But, with just a little work, you can make it safer and help protect against fraud.