This community bank was looking for a new tool to boost both loan production, fee income, and their overall ability to compete in their markets. As a result, they consistently found themselves on the losing end of CRE deals with rates that extended beyond 5 years.
Adopt the ARC Program: ARC allows a community bank to offer up to 10-to-20-year fixed rate commercial loans, while the bank earns a floating rate on their balance sheet. All without any hedge accounting or reporting headaches that come with a traditional interest rate swap.
- $93 Million New CRE Loan Production
- $1.3 Million Fee Income Generated
- Bank uses RAROC loan prices model to calculate a sufficient ROE for the bank, typically 15% to 16%
- Bank is thrilled with the upward move in floating rates, while borrower retains a fixed rate