Veteran community banker launches loan production hub

Venture already has handled almost $30M in deals

A veteran community banking executive has started a company that gives Tennessee's smaller lenders an efficient way to build their commercial loan books.

BancAccess has set up a clearinghouse system to collect business loan requests and offer them to its member banks. The company also pools other services involved in lending — think underwriting, title insurance and appraisals — and is building out a range of group purchasing options. The co-op is the brainchild of Ben Rudd, who has been president and chief lending officer of Heritage Bank & Trust in Maury County since early last year.

Rudd says the venture gives small banks — many of which have struggled mightily to grow their asset base since the Great Recession — access to C&I loan leads they wouldn't be able to drum up on their own without incurring large costs. Banks can take on loans in full or participate in a portion of the loan request. Four area institutions — First Freedom Bank in Lebanon, Farmers & Merchants Bank of Trezevant, Hardin County Bank in Savannah and People's Bank of Clifton — each have invested $100,000 in the company's launch. Rudd is expecting others to sign on, but they will be asked to pay more.

"The idea is still morphing and developing but it's become a lot bigger than we expected," said Rudd, whose contract at Heritage expires July 31. "There's power in numbers and we see tremendous opportunity for smaller banks to grow their interest income."

Early evidence suggests Rudd is on to something. BancAccess already has processed almost $30 million in loans — even before its four founding bank investors have received final regulatory approvals. A key player in that early growth is a national company that has contracted with federal agencies to buy homes for mental health patients, while about half of that number has come in the form of rent-to-own contracts.

"With all the troubles smaller banks have faced in recent years, they haven't been able to spend a lot of time thinking about what they could be doing," Rudd said. "Starting a loan processing operation for multiple banks doesn't seem like a big leap — but apparently it is."

Come early August, Rudd will devote his energy to BancAccess full time. He has lined up two employees, one a loan officer and the other in a support function, to join him as he looks to build a statewide network of 25 to 30 banks. From there, he expects to be able to take the BancAccess model to other states such as Texas and North Carolina.

"I can see us skip and jump across the country with this model," he said.