Jack Henry & Associates, Inc. is a leading provider of technology solutions and payment processing services primarily for the financial services industry. Today, Jack Henry Lending introduced the Jack Henry Loan MarketplaceSM, an online community for financial institutions to easily engage in the buying, selling, and participation of loans.
Financial institutions have long needed a more efficient, cost effective way to manage their loan portfolios, whether that be for asset diversification or reallocating credit risk. Today’s unique environment particularly calls for solutions that assist banks and credit unions with the strategic distribution of loans, finding new liquidity, or divesting away from a particular asset concentration. The Jack Henry Loan Marketplace provides unbiased access to opportunities from financial institutions across the country. It centralizes communications and transactions related to the purchase, sale, and trade of these loans, plus directly connects counterparties to eliminate the need for a broker.
Michael Radcliffe is CEO of Community Financial Services Bank, based in Benton, Kentucky. He explained that the $1.2 billion-asset bank, like many organizations of a similar size, has different resources than larger lenders and can be challenged to source liquidity. Radcliffe commented, “With the Jack Henry Loan Marketplace, we gain a network of like-minded peers who want easier, smarter ways to manage our existing portfolios. We tend to be niche lenders, tailoring our relationships to available deals in our local markets. Through this online community, we have immediate options to buy or sell certain types of credits and more easily diversify if a concentration is building in our portfolio. It will be a smoother, faster process that can be done on our time.”
The Jack Henry Loan Marketplace allows loans to be presented as single transactions or pooled together and can accommodate any lending asset class. The digital format reduces document transfer from weeks to a day, sometimes minutes. Marketplace participants gain a transparent process that provides an audit trail of all buying, selling, and trading. Intuitive listings allow users to navigate the marketplace with ease, filtering by asset class, product type, geography, loan amounts, and counts, or a number of other credit metrics. Financial institutions also receive deal notifications whenever a trade hits the marketplace that matches their current conditions.
Terry Renoux, head of Jack Henry Lending, stated, “Banks and credit unions as well as borrowers across the United States need longer-term solutions to maintain their stability and strength. The Jack Henry Loan Marketplace presents an opportunity for local lenders to extend more credit to those who need it, facilitating a network of financial institutions willing and available to take on a wide range of loan opportunities. This digital model efficiently engages a full spectrum of geographies, asset sizes, and institution types to create a broader community of lenders, each helping one another diversify their own commercial assets and better manage portfolio risk.”