CHICAGO -- LaSalle National Bank may be an affiliate of Dutch banking giant ABN Amro, but it has learned the value of thinking small.
LaSalle National Bank At a GlanceParent company LaSalle National Corp.Head of banking Lamont ChangebusinessTotal assets $9.6 billion (9/30)Total loans $5.2 billionTotal C&I $386.4 millionloans (6/30)($1M or less)
Since beginning a push into the crowded small business banking market in 1993, the $9.5 billion-asset affiliate has found that its decentralized community bank approach is paying off.
"When you look at our community banks, you will see a greater amount of business credit account activity than you will see at the downtown bank" said Lamont Change, vice president of business banking.
In targeting businesses with less than $1 million in annual sales, the company introduced a business credit account that gives firms checking account access to a revolving credit line. (LaSalle borrowed the idea from its sister bank, European American Bank in Uniondale, N.Y.)
Indeed, Mr. Change says the initial acceptance of the product has been linked to geography: Borrowers like to be close to their bank. In fact, he says the importance of location grows as the size of the company falls. As a result, the company's small business push has been enhanced by LaSalle National Corp.'s recent acquisitions.
"A lot of what LaSalle's been doing is buying thrifts and building up their retail network," said Christine Pavel, a banking analyst with Chicago Corp.
As in its better-known middle-market business, LaSalle takes a relationship approach to small business banking. Lenders are given individual lending authority, typically below $1 million, and all call on customers, perform the credit analysis, and manage the relationship.
At the same time, LaSalle uses a centralized system to administer its small loan portfolio. Monthly reports from borrowers are submitted directly to the facility for preparation of spread sheets. With this information available, lenders are able to monitor credits and keep problems manageable.
To compensate for the combined functions, lenders get special training on lending products, such as state and federal loan programs, to ensure quick turnaround.
"We have people with well-developed skills in lending and in specialty lending," Mr. Change said. "For the people in my division, this is our only source of income. If we're not effective in bringing in small business, then we've missed our business objective."
While the division has become sophisticated in its lending technique, Mr. Change said there is room for improvement. Specifically, he said the division is trying to improve the level of service to the individuals who own and manage these companies.
By maintaining independent banks in the communities around Chicago, LaSalle is trying to stay close enough to its customers to provide that service. But staying close and giving lenders the authority to make decisions will not maintain relationships without service, Mr. Lamont said.
"You can create whatever kind of authority you want," he said. "But if you can't understand the needs of your business customers, what good is it?"