According to Deb Swearingen Lyles, Kansas City market president at Emprise Bank, banks in the Kansas City market get the same information from their borrowers, but each bank has an appetite for different things.
Swearingen was joined on a panel by Chris Roberts, managing director of commercial real estate at Sunflower Bank, N.A., and Kate Sullinger, CCIM, VP of commercial real estate at Enterprise Bank & Trust, at KCRAR's commercial real estate forecast event last week. Jackie Wise, SVP of commercial & corporate business development at Emprise Bank, moderated.
Both Swearingen and Sullinger said their respective banks were in growth mode.
Above: The KCRAR commercial banking panel from left to right: Jackie Wise, Deb Swearingen Lyles, Chris Roberts, and Kate Sullinger. Photo credit: Marcia Charney, MetroWire Media
“There have been some banks that said we’re going to slow down until rates adjust before they do any more, which has given us a great opportunity,” Swearingen said.
Roberts said 2024 started strong for Sunflower Bank, and he was making some of the best deals of his career. In May, however, management directed him to “pencil down” because the bank is in the process of acquiring a larger bank.
The acquisition will cause Sunflower to go from $8 billion to $17 billion in one night, bringing the bank new opportunities.
“The bank we’re buying is one of 25 Fannie Mae U.S. lenders, which allows us to do Fannie Mae permanent loans off the balance sheet. It’s a non-interest income generator plus a very nice servicing strip on the back end. . . . and it’s just another kind of tool that I have in my toolbox that we didn’t have because we’re not going to underwrite a 10-year fixed-rate on balance sheet paper,” Roberts said.
According to Roberts, bank consolidation will continue because “if you’re not growing, you’re dying.”
“You may think of the three banks up here as competitors, but we consider ourselves to be collaborators,” Wise said.
Sullinger said it bodes well for a borrower to have not just one or two but three, four, or five strong banking relationships. There are times, she said, when a particular bank may not be lending in the area of the borrower’s need, but another bank with which the borrower has established a relationship is.
Sullinger advised borrowers to know where the market is and know who the players are.
“And I would add to that, not only relationships, whoever your lender is, your bankers always want to be advisors. If there’s another product out there that’s better than what they are offering you, then they should be telling you who has that. . . . Good bankers will do that. We always should be doing what is best for the client, and when we do that, business continues to come, your portfolio continues to grow and you get repeat business,” Swearingen said.
Because there are so many banks in Kansas City, Swearingen said there are opportunities to have a lot of relationships.
“And you should because when a bank goes through a merger or acquisition, and they no longer do that type of lending, you need to have other relationships already built,” she said.
Above: Rendering of Emprise Bank’s new KC Banking Center, currently under construction at 100 E. 20th St. in the Crossroads, is expected to be complete in October 2025. Rendering credit: Hermanos Design Build Studio
Sullinger said that although the banks may vary the terms they offer borrowers, they always want to be sure that their loans can be repaid at the end of the day.
The cycle of the year sometimes drives what terms a bank can offer a borrower, Sullinger said.
“And the one thing I think there’s a difference in is the prepayment penalty. Some banks have it; some banks don’t. It just depends on the project,” Swearingen said.
Roberts said he asks his customers to stack rank what is most important to them with respect to the loan.
“Is it loan proceeds? Is it the best available rate? Is it prepayment flexibility? Is it interest only? Just help me understand. When I understand what you need, then I will work backward down. You’re probably not going to get everything because we’ve both got to win, but that’s the kind of conversation that I generally have,” said Roberts.
Sullinger agreed.
“You can’t pull on every lever. So come out with best and final and just let me know—hey, proceeds are the most important, other things I can live with. You let me know what is the highest priority, and then that’s how we try to structure our best terms,” she said.
Swearingen said that some projects that have been waiting for a drop in interest rates are getting ready to start.
“We’ve seen an uptick in things that may have been sitting for a while. But it’s a gambling game too. If they wait for rates to come down, construction costs could go up. . . . But we’ve seen things activate since rates dropped 50 basis points,” said Swearingen.
Sullinger said Enterprise Bank was awarded its third new market tax credit for three of the last four years.
“This year, we are one of six banks in the country; last year, it was one out of 10 banks in the country,” she said.
Swearingen said Emprise Bank has an AI (artificial intelligence) department.
“It’s not just banks that we’re competing against anymore. We’re competing against Apple. We’re competing against Amazon. We’re competing against a lot of different non-banks,” said Swearingen.
Header image: Rendering of Emprise Bank’s new KC Banking Center, expected to be complete in October 2025. Rendering credit: Hermanos Design Build Studio