C onstruction loans can be one of the most profitable lending products on a bank's balance sheet-but they can also be the riskiest. For some community banks, making one mistake on a big construction loan could potentially wipe out their construction lending revenue for an entire year. Smart construction lending strategies focus on both sides of the coin, managing risk while optimizing profitability. " Out of all the different areas of lending, construction lending is where community banks can truly stand out and compete if they are disciplined, customerfocused and knowledgeable about the intricacies of the construction process, " says Tom Floyd, senior vice president and chief lending officer at MainStreet Bank in Fairfax, Va. Construction lending across both residential and commercial real estate projects is a key focus for this $2 billion-asset community Construction lending is an important sector for MainStreet Bank. Construction loans make up a quarter of the community bank's $1.6 billion loan portfolio. independentbanker.org // 45http://www.independentbanker.org