In the heart of Central Indiana, Hendricks County Bank and Trust has successfully halved the time it takes for the bank's loan officers to underwrite loan applications for its small-business customers.
The $230 million-asset community bank pulled this off thanks to partnering with
"We had a contract with Abrigo dating back to 2019 where we used just the credit analyst module as a part of their full suite, and we liked it a lot," Hendricks County Bank credit analyst Colin Hinkle told American Banker. "It really helped us with determining credit worthiness and things like that. We were then invited to be a part of the beta testing program for Abrigo Community Lending, and we really liked what we saw. We thought it was very competitive both price-wise and from a product offering standpoint."
Abrigo has offered commercial loan origination software for years, but built the community lending platform as a pared-down version of its full suite in response to customer demand.
"We did a bunch of surveying and 70% of our customers said the number one thing they were looking for was a simple, easy to use loan origination system," Abrigo Chief Marketing Officer Laura Broderick told American Banker. "It really sparked the idea of adjusting our more complex loan origination system that larger banks use, taking the best of that and then simplifying it to create Abrigo Community Lending."
The adjustment involved simplifying the platform and making it more user friendly, according to Ravi Nemalikanti, Abrigo's chief product and technology officer.
"It doesn't need all the bells and whistles and the complex intricacies of what a full commercial loan origination might bring," Nemalikanti said.
Simplifying the platform allows community bank loan officers to fill out and submit loan applications on behalf of their clients more quickly.
"If I were a loan officer meeting someone for lunch, I could complete the loan application between the time I order and when my food arrives," Hinkle said.
Hendricks County Bank fully switched over to the Abrigo Community Lending platform within a single weekend.
"The update happened on a Saturday and we personally did not experience any service interruptions at all," Hinkle said. "If there was any downtime, we were closed anyway."
Switching from one platform to another is always an adjustment, but Hinkle praised the transition process as "seamless."
"With all software implementations you have to rip the Band-Aid off at some point," Hinkle said. "I wanted to make sure we had essentially zero downtime. I know that's unheard of, especially in fintech, but our lenders and our underwriting staff were immediately able to just continue doing what they do — just in a different spot. I use the word seamless sparingly, but it seriously was."
Abrigo's approach to serving its community bank clients is another factor in Hinkle's confidence with the partnership.
"The project manager we were assigned to said, 'We want you to have as little downtime as humanly possible. Your loans are your lifeblood and your money maker,'" he said. "Part of the reason we value the relationship that we have with Abrigo is because they think like a community bank."
Community banks are facing a
"In the grand scheme of things, we're a very small fish in a large pond," Hinkle said. "We're all fighting for the same piece of the pie, and any tool we can have to help us get there is a tremendous boon for us."
Hendricks County Bank is also feeling the pressure from national banks competing for the same pool of residents in Hendricks County, just west of Indianapolis.
"It can be difficult to grow and adapt as a community bank," Hinkle said in a case study published by Abrigo. "In our region we have Chase, Bank of America and Wells Fargo encroaching in our area on top of the local banks we are already competing with."
Using Abrigo's community lending product is helping Hendricks County Bank save hours of time on every loan application.
"The amount of time our lenders and originators were spending underwriting loans and getting those loans to an approval committee typically took, with our previous workflow before we switched over to Community Lending, anywhere from five or six hours per loan," Hinkle said. "With the pace at which some community banks operate, especially in our world, that's just too long, especially when we're trying to be as lean as humanly possible. It halved it at least, and in some cases even [cut down] to a third of the time needed [formerly]. Even on some of our more complex deals, it cut the amount of time spent down in half."
The other main way the bank saves time in the loan origination process, even though it's less quantifiable, is through having all the different types of loans and loan documents in the bank's systems formatted through Abrigo's software.
"Whether it's a renewal, a review, or a new loan, they all come in with the same format," Hinkle said. The consistency was a huge thing, and that was something championed even by our CEO."
Hendricks County Bank is using the time saved on loan origination processes to further increase community involvement and drive loan sales.
"The time gained back has now enabled us to go out and sell more," Hinkle said. "We're out in the community more, which is kind of our whole thing with being a community bank. We're able to better serve our customers as well by lending in an efficient manner."
"By helping community banks, we help American communities," Broderick said. "We know that in a third of U.S. counties, the only physical bank branch is a community bank. One of the most effective things we can do is bring technology to complement the great relationship management that community banks, like Colin and his team, already have, and give them the tools to be able to have those legitimate one-to-one conversations with everybody in their community.
"There's so many community banks, but there is also consolidation amongst them," she said. "Banks that are not focused on growth are most likely to be the ones that get acquired. By arming our banks with technology, it puts them in a place where they can continue to grow and not just survive, but thrive."
