Pub. 8 2020 Issue 1

7 The Community Banker KEENANAND PARTNERS SUPPORTING COMMUNITY BANKERS Tom Keenan, Keenan & Partners W hen the Great Recession of 2008 onset, my former career as a com- mercial real estate development executive became irrelevant, and then ended, all in a matter of two weeks’ time. In the wake of Lehman Brothers’ failure on September 15, 2008, all real estate development credit became frozen in place, and, without credit to build new projects, I faced being out of a job. But then for some reason I got lucky. I got very lucky. Because, while contemplating what I might do to earn a living in my new reality, my phone started ringing. And on the other end of the line were community bankers, community bankers that I had formerly worked with on CRE loans, who were now calling me to seek advice on how to work themselves out of troubled CRE loans, often on loans on semi-completed develop- ment projects where work had halted before completion, on income property loans where property income no longer met debt service covenants, and on loans where these same community bankers were left worried and anxious. And so, with some newly found time on my hands, each time that that phone rang with another story of credits faded, I was able to answer and say: “OK. How can I help?” And, each time, I leaned in and helped where I could. And the next thing I knew, more community bankers were calling to tell me about their troubled assets. And then more after that. And, before I knew it, I had formed a new business focused entirely on Featured Associate Member community bank advisory and distressed portfolios. And then things got very busy. And the phone kept ringing. And the next thing I knew and again before I knew it, it was the year 2013, and Keenan & Partners had assisted more than 60 community banks in the workout and sale of more than 1,300 distressed loans and REO assets. And in that same time period we had performed market valuations on $1.38 billion in classi- fied credits, often merger related. As the great recession wound down in the years 2012-2014 and our clients’ NPA portfolios wound down to less than 1% of assets nearly universally, I found myself once again wondering what I might do next. And then I got very lucky. And not for the first time if you’re paying attention to this article. I got very lucky yet again because, while again contemplating what I might do with my future, my phone started ringing, and on the other end of the line were community bankers, yet again. And this time I was told: Thanks for all your help with our distressed portfolio. Now that we’ve wound that down we’re going to improve both our efficiency ratio and our cost of funds by repositioning our branch and facilities portfolio. We’ve got too many branches in some markets and not enough branches in other markets. We have a lot of back office space that we’re no longer using. And every one of our branches is larger in size than today’s foot traffic warrants. All of this needs to be repositioned; can you help us? And so once again I was able to answer and say: “OK. How can I help?” And once again, I leaned in and helped where I could. And the next thing I knew and again before I knew it, my firm was handling the demising of larger branches into smaller spaces, the purchase and lease of new branch spaces, consolidation of branches, consolidation of back office spaces, deposit sales and acquisitions, valuation, sale, and lease of closed branches and facilities assets, and full branch footprint cost benefit analyses. And once again, my firm had got- ten extremely busy, and again before I even knew it, we had helped community banking clients in the repositioning of more than 150 branch and facility locations since 2014. If you were to ask me about this run of good luck that I’ve had, I would have to tell you that I am the luckiest man that I know. Because my run of good luck has allowed me to work exclusively with the community banking industry, throughout multiple re- gions of this great country. And during this time, I have come to realize that community bankers are some of the best people that I know. If you look up the words Community Bank on Wikipedia today, you will find the following: “A community bank is a deposito- ry institution that is typically locally owned and operated. Community banks tend to focus on the needs of the businesses and families where the bank holds branches and offices. Lending decisions are made by peo- ple who understand the local needs of fam- ilies, businesses, and farmers. Employees often reside within the communities that they serve.” With that said, it has occurred to me on more than one occasion while doing all of this that community banking is the most important job in America. Because it is community banking that affords pros- perity to each of the great communities in our nation, and to the great people that live in them. As a conclusion to this story, I am inclined at times to ask: was it luck that interrupted my career in 2008 and gave me the oppor- tunity to serve the community banking industry? Or was it something else? I’ll admit that I’ll never know the answer to that question. But this I do know: It has been the greatest privilege of my career to devote my time to assisting community banks since forming Keenan & Partners all those years ago. And so, as we look out together yet again into uncertain times ahead, should there be anything that I can do for anyone reading this article, in the area of problem asset resolution, in the area of liquidity and efficiency ratio improvement, in the area branch footprint and/or back office re-posi- tioning, or in the area of helping community banks in any way at all, please don’t hesitate to contact me. Because it would be my continuing privilege to answer and say: “OK. How can I help?”