Independent Banker - April 2021 - 19

about 10% of the $37 billion-asset
community bank's annual consumer
loan production, which is sizable
given that it generated a record high
of nearly $1 billion in consumer loans
in 2020.
" I think the trend of increased
demand and increased sales volume
will continue in 2021, " says Jeff
Fulp, director of consumer banking
at SouthState Bank. He adds that the
changes in consumer behavior that
fueled demand in 2020 are not going
to disappear overnight.
The low interest rates and
improving economy could very well
give people more confidence in
making a major purchase, and dealers
have been busy replenishing what
had become depleted showrooms and
inventories. At the end of last year,
SouthState Bank had prequalified
a number of borrowers for orders
placed that will get fulfilled in 2021.
" Even beyond COVID, the trends
indicate that people really want to get
outdoors and create lasting memories, "
Fulp says. " So, I think the outlook for
2021 and beyond is very bright. "
Recreational lending is a unique
market. Unlike the auto lending
market, which is dominated by
the lending arms of automakers
like Toyota, Honda and GM, the
recreational vehicle market doesn't
have the same base of captive lenders.
Instead, buyers have a variety of
An opportunity to deepen relationships
In Conway, S.C., $1.1 billion-asset Anderson Brothers Bank offers
recreational loans to its customers and has cultivated relationships
with a variety of dealers. One of the things that came out of the
pandemic is that people had more free time and were looking for
ways to get out of their homes and do things outdoors. " I wouldn't
say we saw a spike, but we did see an increase in those types of
recreational vehicle loans, " says Jeff Williamson, the community
bank's Horry County consumer loan sales leader.
Anderson Brothers Bank looks at recreational loans with the
same consumer focus as its other products. " We are not just
looking at the customer as an opportunity but as a client that we're
trying to serve, " Williamson says. " We try to protect the consumer
as best as we possibly can so they are not getting into a massive
negative equity situation. "
options. Community banks have
started to express more interest in
recreational lending over the past 24
months, particularly as they have seen
these loans slip away to other lenders,
says Chet Heughan, senior director of
indirect lending solutions at software
firm AppOne in St. Cloud, Minn.
Banks also like the profitability this
type of loan can deliver. Recreational
loans tend to be priced at a higher
rate than auto loans because captive
lenders offer aggressively low rates
to sell cars. In addition, Heughan
says, lenders often find that they are
dealing with customers with good
credit who are often willing to put a
down payment to secure the loan.
QUICK STAT
$27.5 billion
The annual revenue of U.S.
recreational vehicle dealerships
in 2020
Source: 2020 IBISWorld report
Leveraging dealer relationships
So, how can community banks grow
their recreational loan volume?
One way to expand that business
is by forming relationships with
recreational vehicle dealers.
" This is really how this industry
has grown, " Heughan says. " The
dealership is the front line. " For
" Leveraging
relationships with
dealerships in your
community is probably
the best way to enter
the [recreational
lending] market. "
-CHET HEUGHAN, APPONE
example, almost every customer
who wants to buy a new or used
RV goes into a dealership, and that
dealer will direct the customer to a
financial institution. " So, leveraging
relationships with dealerships in your
community is probably the best way
to enter the market, " Heughan says.
AppOne provides a software
platform that creates a bridge
between dealers and lenders by
independentbanker.org Q 19
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Independent Banker - April 2021

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