Stan Ricketts of Intrust Bank shares an encouraging report of seeing “a sense of some loosening or growth potential” over the last few months in KC’s regional economy.

"On the commercial side," said Turner, "one of the factors creeping into everyone's underwriting is refinancing risk." This is a particular problem, he noted, if one is facing low cap rates, low interest rates and not a lot of principal. Turner expects to see "some gnashing of teeth pretty quickly" on how one pays these off.

Tom Cohen, another mortgage banker, was entirely keen on low interest rates, noting that they "drive our industry." He added, "We're seeing a lot more business. It's pretty extraordinary."

Kemper acknowledged that on the residential side, dependable low rates "stimulate a lot of new consumer activity." But he wondered if there was any real stimulation on the commercial side, or if the activity was really just a matter of moving the proverbial deck chairs "to the sunnier side of the deck."

Turner admitted that in the absence of demand, "There is virtually no new speculative construction." Still, he saw no downside in his industry to the low rates other than the refinancing risk.

Stan Ricketts asked Turner if he sees people trying to refinance more of their mortgage. Turner admitted "it is possible to take money out of the project today," but that mortgages are typically limited to 75% to 80% of value. Cohen added that they work for investors who do have floors and need to get a particular yield.

Opportunity

For mortgage bankers Turner and Cohen, the time of maximum opportunity is now. "These interest rates in our business are our greatest opportunity," said Turner. Cohen saw an added advantage: "There are not so many commercial mortgage bankers out there." Nat Hyde confirmed that the residential refinance market "is extra strong."

For virtually everyone else, the great opportunities lay ahead--though for most, "ahead" means a return to timeless values. Some, like Buckner, see a long-term advantage in the public thrashing of the "more impersonal" large institutions. "People want to pull back together, to get back to basics," he said. "This plays to our niche."

"Our opportunity," added Kemper, "is finding places where relationships make a big difference." He noted that the larger national banks stumbled because they did not find the right synergies nor were they able "to manage the quality and integrity of what they do," at least not well enough. "We can't be all things to all people," he said. Baum came to a similar conclusion. "What we have learned," he said "is that doing less means more. We have to do fewer things and do them really well."

Bob Buckner discusses how Country Club Bank focuses to service its niche business and remains in healthy condition by avoiding over-diversifying.

Several others saw the same opening. "Putting bankers where people live has served us well," said Brown, adding that customers "want to look decision-makers in the eye." Boles noted that "the ability to sit down with your customer will always be there for us." For Rohling, the key is "superior service to existing customers" as well as a "long-term approach rather than a transactional one."

"Relations and relationship building," agreed Markey, is the secret to a sustainable future. He added, "We are finding that consumers and business appreciate the fact that we are very focused on markets we serve." Attested Ricketts, "Our industry is for the most part trusted," "because of our stability and because we pay attention to customers to maintain their trust."

Charpie also sees the present moment as a "tremendous opportunity to build relationships with clients." Mike Miner contended it has long been A.G. Edwards' philosophy to "put the customer first," a philosophy that plays particularly well today.