How To Compete in the Banking Industry: Relationship-Based and Customer-Centric Service With Jared Goldfarb

On today’s episode of The Same Day Podcast, Yoni Schmidt joins Jared Goldfarb, the Senior Vice President of Commercial Lending at BancFirst, to discuss how a large bank can offer the service and benefits of a small one. Jared shares why he believes building people-focused relationships is essential, how a bank can differentiate itself in a sea of competition, and some common misconceptions in the commercial lending space.

How To Compete in the Banking Industry: Relationship-Based and Customer-Centric Service

Jared Goldfarb is the Senior Vice President of Commercial Lending at BancFirst, a financial institution with over 100 locations across 60 communities in Oklahoma. BancFirst offers a range of personal and commercial products, including trusts, insurance, and investment services.

Directly after graduation, Jared began his career in the banking industry selling annuities, mutual funds, and home equity lines of credit. After working at a few banks, his interest in commercial lending grew, and once he received an offer from BancFirst, he found it to be a perfect fit. He enjoys the community-focused atmosphere and the emphasis on relationship-based customer service and has played a pivotal role in shaping the financial landscape of numerous businesses.

Here’s a glimpse of what you’ll learn:

• How Jared Goldfarb got his start in the banking industry
• Strategies for navigating challenges: consistency, discipline, and focusing on your strengths
• Why it’s essential to be people-focused and build long-term relationships in the banking business
• Differentiating your bank from the rest: speed and agility from start to finish
• Timelines from evaluation to approval in the commercial lending process
• Who are Jared’s ideal clients?
• The future of commercial banking and its effects on smaller banks and human resource needs
• Common misconceptions in the commercial lending space

In this episode…

Is it possible for a large bank to offer a range of products while maintaining a personal touch? Achieving this balance can be challenging but it’s not impossible.

Jared Goldfarb, a seasoned banking professional with two decades of experience, strongly believes in the importance of mutual respect and loyalty in building robust customer relationships. Large banks offer a broad range of products, but Jared prioritizes understanding his clients’ needs and tailoring his services accordingly. Providing personalized service and quick response times is critical to maintaining the relationship. Highly selective when assessing potential clients, Jared prefers to establish long-term banking relationships with people rather than facilitating one-off transactions. Valuing conversations with clients to understand their vision will preserve a firm connection in the future. By focusing on building trust and providing exceptional customer service with a small-town feel, clients eventually become advocates and help grow the business through networking.

Resources mentioned in this episode:

• Yonatan (Yoni) Schmidt on LinkedIn
• Mat Zalk on LinkedIn
• Keyrenter Property Management
• Keyrenter Property Management in Tulsa | Oklahoma City | Arkansas
• Keyrenter Property Management email address: [email protected]
• Jared Goldfarb on LinkedIn
• Jared Goldfarb’s email: [email protected]
• BancFirst
• “Scaling a Business: The Power of Networking” with Brandon Neth on The Same Day Podcast 
• “Profitable Real Estate Investment Strategies” with Kurt Volk on The Same Day Podcast

Sponsor for this episode…

Keyrenter Property Management:

This episode is brought to you by Keyrenter Property Management.

Keyrenter Property Management is a full-service property management company that helps clients buy, renovate, and operate real estate assets.

The team helps clients build wealth while taking the headache out of property management.

That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need.

To learn more about their services, go to https://keyrenterpmc.com/ or send them an email at [email protected].

Episode Transcript

Intro 0:05

Welcome to The Same Day Podcast where we discuss driving incremental business growth and other topics related to real estate, property management and entrepreneurship. Now to the show at hand.

Yoni Schmidt 0:20

Hi there Yoni Schmidt here are hosting today’s episode of The Same Day Podcast where I connect with top business and real estate leaders. past guests include Brandon Neth, from The Neth Lab, Chris Lile from State Farm, and Kurt Volk, one of our clients. Today’s episode is brought to you by Keyrenter Property Management at Keyrenter Property Management we are a full service property management company, helping our clients buy, renovate and operate real estate assets. We help our clients build wealth while taking the headache out of property management. That’s why no matter what rental you have a single family home condo, townhome, or apartment, we have the management solutions you need. Today we have the privilege of welcoming Jared Goldfarb, the Senior Vice President of commercial lending at BancFirst on our podcast. Jared a seasoned professional in the banking sector brings a wealth of experience and insight from his years of experience in commercial lending. With his roots in Tulsa, Jared has played a pivotal role in shaping the financial landscape of numerous businesses. His journey marked by dedication of astute financial acumen has positioned him as a respected voice in the banking community. His commitment to fostering growth and success in the commercial sector makes him an exceptional guest. We’re excited to dive into his perspective and learn from his vast experience in the dynamic world of banking, finance. Welcome, Jared, and thank you for being here.

Jared Goldfarb 1:40

Thank you for having me. Appreciate you.

Yoni Schmidt 1:43

Wonderful. So, Jared, if you don’t mind, we’ll hop straight into it. And kind of just, I’ll ask a few questions here. And, you know, we’ll hopefully create some good content for our audience, and some share some good perspectives with them. And the first thing I’d like to know is how did you get started in the banking industry? And what was it that drew you to BancFirst?

Jared Goldfarb 2:09

Let’s see, starting in the banking industry, wasn’t by design, I graduated college with an MIS degree management information systems, which is a business degree with a focus on tech computers, which is what I thought I wanted to get into. At started college.com boom was sort of going and blowing. And, you know, by the time I finished school, that bubble sort of burst and finished school looking for jobs, just if I wanted to stay in the Tulsa market or, or even moved to Texas, which was a consideration at one point. It just, I didn’t have the opportunities that I thought I would. So in order to get out of my parents house, I applied for a banking job with bank one at the time, which eventually ended up being purchased by Chase while I was there, apply for a teller job actually, right out of school, had my bag my car was packed with my stuff from college and went to my first interview and stepped in and the in the district manager said Well, we’d like for you do actually apply for this relationship banker role, which is really more of the branch level retail banker that you see when you walk into any bank in the country. That role was no accounts it was home equity lines of credit, it was you had to get your investment license, you had to do series six and 63 Selling annuities and mutual funds. And then there was a small piece that was small business. And so you got my first sort of job was a really a, an array of products and services in the banking world that I sort of got away, you know, a taste of each and I sort of gravitated towards the loan side versus the you know, investment side and sort of took it from there, in knowing that I wanted to get into commercial lending world met a family owned bank at a wedding actually met a gentleman whose family on the bank and told them I wanted to get the commercial side of lending. You know, this was 20 years ago and ended up going to work for them. Family owned bank in Tulsa. Great experience learned the commercial side underwriting from start to finish of a loan really, really gave me my first entry into that environment. I was there for five or so years and ended up having an opportunity with a distress distressed bank that a group of investors were going to work for. And they were going to go in and build the bank up and eventually sell it and flip it which was the plan from the start. So knowing that it was a short term sort of play, and of going to work for them also an incredible experience in learning, sort of the side of the balance sheet management of a bank and building one up and looking for potential acquirers. So that bank and then the bank that acquired us was out of state bank and sort of had their own model of how they wanted to operate. And it wasn’t quite in line with our model that we had previous to the sale. And so I started to look for a new opportunity and evaluated about 10 banks in town and kind of narrowed it down to two or three that I felt like I was comfortable working for, and BancFirst and the end was the one that sort of caught my eye and I couldn’t try to poke holes in it and really couldn’t, and so ended up taking their offer. And I’ve been here for five years as of last two months ago. So

Yoni Schmidt 5:59

Wow, that’s awesome walking into a bank to apply for a teller position, and then the district manager telling you that he’s more interested in you, being a relationship banker must have felt really good.

Jared Goldfarb 6:15

Yeah, it was, it was it was interesting. It was I didn’t know anything. You know, I didn’t know a ton about banking at that point. But I mean, they did they even did like the old school, like Sell me this pen. Or sell me this stapler, I think was the the view and I’m like, What am I getting into here? But

Yoni Schmidt 6:31

oh, yeah, that’s awesome. Today, you can use ChatGPT to roleplay. With you sell me this stapler? Oh, it’s pretty interesting. Yeah. So could you share with us, I guess, a little bit about from joining BancFirst, how how did your journey look like? What did your journey look like, you know, becoming a Senior Vice President at the bank.

Jared Goldfarb 6:58

So in that evaluation process that I told you about looking for my next employer, I, in those previous three jobs that I had, I knew from each one of those, you know, a little bit of each one of those banks kind of had a piece of what I was looking for, I love the dynamic of chase with their technology and their, you know, being the largest bank in the world, and just incredible sort of systems and processes. Then the family owned bank, which was more of the true community bank world of we’re doing, Mom and Pop manufacturing shops, we’re doing, you know, from from a little deal to, you know, multimillion dollar credits. To then the flip bank of the startup and flip bank that I worked for was another true community bank, we had speed, we had competitiveness and, and true customer service. So I took, I was looking for a little bit of all those three banks. And then that sort of led me to BancFirst that has a collection of all of those things that I loved about those previous banks. Yeah.

Yoni Schmidt 8:08

Love it. Stepping into BancFirst. Yes. And being there for five years now. What, what unique challenges have you encountered in the commercial lending space and world? And how do you navigate those.

Jared Goldfarb 8:24

So it’s been a unique time, and that I’ve been here for five years, you know, throughout those five years, you think about that’s, you know, 2018 through now, we’ve had a, you know, an election, a global pandemic, we’ve had historically as low of rates, as I’ve seen in my 20 years, we’ve now back to rates now that are historically over the last 20 years, some of the highest that we’ve seen, commercially, and, and it’s the challenges, I think, as a bank, and I’m probably going to repeat myself a bunch here in this message is like, stay consistent, stay disciplined in your lending. And, you know, sort of true to the model of like, customer, people first, you know, looking at the relationships, and just staying, staying sort of in your, in your, in your wheelhouse, so to speak of, you know, don’t try to get too far outside of what you’ve what you know, and what you do. And I think that’s that’s how we’ve been able to navigate sort of these choppy waters that we’ve been in over the last, you know, three or four years.

Yoni Schmidt 9:35

Yeah, ignoring those shiny objects Mat Zalk always tells me when I bring him a commercial deal opportunity like a commercial building, yeah, you know, retail or, or industrial and, you know, our focus is single family residential and, you know, small boutique multifamily. He just looks at me Italy, you know, and says, ignore it. Right, you know, stay stay focused on on What we do best, because if we’re not going to stay consistent, then we will start doing a disservice to our current clients and the ones that we’re trying to, you know, bring on in those new spaces. And if we’re not going to go into commit ourselves to learning those new things, they’re just shiny objects. You mentioned, you know, people and relationships. And this last answer, you know, the BancFirst has a commitment to loyalty matters. And I know that over the last five years, there’s been not just in terms of, you know, the pandemic and interest rate fluctuations, there has also been a lot of, you know, regulatory changes that may have affected some of your clients. And some of them, you know, may have experienced growth, some of them may have experienced challenges, how does make first commitment to loyalty first, loyalty matters influence your approach, in commercial lending, in relationship building, and you know, the clients that you serve, and the people that you do business

Jared Goldfarb 11:06

with? Well, I, I truly, you know, this bank, I think a lot of banks will say, we look at the people we look at the people and we truly do, it’s our first thing we look at, before we even evaluate a credit. And I truly believe in it. And I truly believe in gut feel, when it comes to talking to a business owner. And if you walk out of there, and you’re impressed by them, or you, or you get a weird feeling of like, that doesn’t seem so great. More often than not, I’ve found in my, in my time that you’re probably right, that there might be something kind of wonky about the deal or whatever. But so loyalty and true is Yeah, I mean, it’s a, it’s a great slogan, it’s, it’s, it’s truly how we operate in that, you know, we will be loyal to you, if you’re loyal to us. And we will, we will, you know, provide the best service and platform we can offer in the way of products, services, and the ability to move quickly for you. And, and, and I truly believe that and I, I, I’ve pride, I pride myself on, you know, at least my portfolio and my client base is, look, I’ll answer the phone, anytime you need me, I’ll work as hard as I can to to get you what you need done in a timely manner. There has to be that mutual respect of, you know, we have a partnership. And I think that as long as there’s that treated mutual respect, and you understand me, and I understand sort of your process, I’m not going to tell you how to run your business. I can offer you as you know, the whatever you need in the way of financing and other services that I can help your business. But just understand that that’s that’s kind of the way our I operate, so not so much. No, but really relationship based.

Yoni Schmidt 12:59

Yeah that’s true, you always answer my call when I call you. And I’m not even a client of the banks yet. And I hope to hope to finance a deal for you guys. And I know we’ve looked at some stuff in the past, and I’ve done some work for your clients. Over the years, how is the bank evolved to meet these changing needs of Oklahoma businesses and the people that you serve?

Jared Goldfarb 13:24

Will BancFirst it’s been around for a while, they’ve evolved probably more slowly than some of the other maybe banks in town that you’ve seen, kind of jump out there and maybe try some new technology or something new in the way of a product or service, or offering, I think we’re very conservative in jumping in the water too quickly. But when we find a product that we feel like is necessary and would be helpful for the client base, they roll it out there. They’re very sophisticated in how they evaluate a certain product that we might roll out. But I would say in the way of innovation and whatnot, we’re probably not that bank. But I think that’s also worked for us to our advantage and in how we operate.

Yoni Schmidt 14:17

But yeah, the tried and true traditional way of doing business and banking. Yeah,

Jared Goldfarb 14:25

love it. We’re not We’re not by any means. We’re not like dead last in the way of like our technical, technological advancements, but we’re certainly cautious and in how we evaluate new stuff.

Yoni Schmidt 14:38

Yeah. Speaking of technological advancements, what strategies do you use to maintain that balance between the traditional banking values and these modern tech changes? Right.

Jared Goldfarb 14:53

So we, you know, we I think we have we obviously like many banks use a third party The operating system for our online banking, those companies, we, you know, the companies that we choose to utilize, we have a heavy, heavy reliance on their technical logical, sort of evaluations of new ideas and new products and the way things look and user interface and whatnot. So in the way of, you know, how we suppose, you know, how we use those to our advantage, I would say, you know, for me, a lot of how I prospect and how I acquire new clients is really, sort of an old school, you know, word of mouth, or networking, or, you know, just, you know, you said, we haven’t done business yet in the directly together, but in the way of you would be the center of influence for me in the way of you refer business to me, you know, I’m available for a certain product type and, or client. And so that’s all, you know, I have, you know, 20 or 30, of, of you in town that, you know, can send me an opportunity or know that an opportunity. Hey, let’s think about Jared for that. So that’s, that’s been my, you know, that’s been my method for years.

Yoni Schmidt 16:14

Yeah, we love that. We love being connectors and being connected with other people. And when it comes to banking, in general, I think it’s super important because, you know, when you’re financing a single family, residential portfolio, for example, you also have to have confidence in the purchasers ability to effectively manage that portfolio and, you know, perform and make make their payments. Right. So that’s where we come in, right as the as the professional property management company. Can you talk a little bit about the importance of community led banking, and its impact on the local businesses and just community in general? And how have you seen it shaped our city here in Tulsa? Yeah,

Jared Goldfarb 17:08

that’s a good question. I think it’s an important one, because I, I go back to this, even though no one loves to talk about COVID, really, in those first few months of it, but, you know, with the PPP loan program, had a lot of people who didn’t have a banker, so to speak a commercial banker from a business perspective that they could call and get a hold of, you know, immediately. I mean, there’s a lot of big banks in town, that it’s hard to get a hold of anybody. And I think people saw that, how still relative it is to have an important it is to have a true commercial banker that you can call in those moments of need. And I think, you know, that, to me, was showing that community banks are still very much viable. In in the marketplace, the thing that is tough is there’s a ton of us. And in Tulsa, you know, there’s a, we have a ton of competitors. And so how do you differentiate yourself? It’s tough. I mean, you’ve, you’ve, you’ve got to be, as I mentioned, you’ve got to be quick and agile, and you’ve got to be competitive, and knowledgeable, and, you know, timely, and that’s, that’s tough for a lot of banks to do, there’s a lot of red tape that a lot of banks have in town. And that was something as I mentioned, about BancFirst that I love was the process from a loan from start to finish is so much more pleasant in the way for me and for my client, then, you know, another, you know, other banks that I’ve or people that I know, that work other banks or other banks we’ve had dealings with. So that’s my, that’s the way I operate have my competitive advantage.

Yoni Schmidt 18:51

For a new client, would you say the process could be 30 to 45 days from start to finish? Is that somewhat accurate? And it?

Jared Goldfarb 18:59

It depends on the it depends on the what kind of loan we’re doing if we’re talking about like a single family rental. Yeah, that’s, that’s definitely doable. If we’re talking about a, you know, a sizable commercial properties, industrial space or something like that, I mean, we typically are doing 60 to 90 days because of the VAT, you know, you have to do environmental evaluations and have the appraisal kind of more extensive and some things like that, that take a little longer in the title. And, you know, and also inspection periods are a little bit longer. So, yeah, we on the on the larger commercial stuff, we’re doing 60 to 90 days. Yeah.

Yoni Schmidt 19:41

That’s interesting. And for how about for larger portfolios, say a portfolio of 10 single family residential homes, you would say maybe also closer to 60 days to get through due diligence and, you know, make sure that those those assets and And the collateral is something that bank feels comfortable with. Yeah,

Jared Goldfarb 20:04

I don’t mean to interrupt you there, but I think on from my side, my processes, the day that I get everything from the client and the way of financials and whatnot. I say from that point, it’s a, it’s two weeks for me to, you know, evaluate and underwrite and work a deal to approve. And then, you know, the stuff that takes longer is obviously the appraisal in the title and other, you know, evaluations and whatnot. But so my process, you know, I, when I said 60 to 90 days on that last answer, it’s more of what the third party ancillary rely on to close alone that take a little bit longer than sir, you know, my process. Yeah. Makes sense.

Yoni Schmidt 20:45

And so for, you know, small businesses and real estate investors that are, you know, maybe local, not local, out of state, what advice would you give them when they’re seeking financing through BancFirst, and, you know, today’s economic climate?

Jared Goldfarb 21:04

I would say, you know, a lot of times what I’m looking for, and this is me, personally, not every course every other commercial lender, but I’m looking for other income sources, typically, if the if the reliance upon their entire income is, are these rental properties, I, I’m probably not the banker for them, I look for, you know, my, my ideal sort of single family rental investor is someone with a business or a day job. And this is more passive income for them. And so my reliance is, hey, look, if if they lose a couple tenants or things get a little hard, they’ve got this other income to live off of from their day job or business. And then this can be sort of navigated on the rental side, outside of that. So when I’m, when I’m evaluating new deals, that’s typically what I’m looking for, in the way of a sort of prospect, I’d say, in the way of, sort of what they should be prepared for it, you know, my, my mind is, you always want equity in the deal, and you always want, you know, BancFirst likes, you know, typically 20% into a deal. I know, some banks are doing 15% of cost. You know, to me, it’s it’s, and then the amortization, typically, you know, some banks are doing 25, some are doing 20, something like that, some private investors are probably doing 30 years, maybe even longer than that. But, you know, for me, I, you know, I’d want to get out of the debt a little bit faster, if it works. And if you don’t need the income, I’m accelerating that amortization, if I’m the investor, just to you know, get that debt paid down. And you move on to the next one. But I have one of my best sort of single family rental investors that I deal with, he puts everything on tenor fifteens. He, he’s very disciplined in the deals that he’s looking for. He does wholesale, and he does, you know, basically he be wholesales anything he doesn’t want, he’ll sell it off. And then he keeps the ones that he finds that he’s dead. He, you know, obviously, there’s these are like, estate deals and things where he’s going out and finding, you know, families of deceased people that want to get rid of a house quickly or something like that. And he’s getting these things at a really nice level, he’s getting in at a really nice level, which is, you know, to me, 80% of the battle is finding a good deal. But, yeah, so that’s, you know, that that’s, that’s for me, his perspective on the single family deals, if that’s what we’re talking about is more of like staying disciplined and finding a good opportunity, versus reaching and, you know, maybe overpaying for a house and then you’re already behind the curve. You’ve got still got improvements to make or, you know, renovations and things like that, that you’ve got to do that, then then compound that with the interest rate. Plus, you know, no offense, but plus the property manager. It’s like, man, where’s the profit at this point? And it gets pretty skinny. Because you know, so.

Yoni Schmidt 24:19

Yeah. Interesting. So, I guess from from an advice perspective to investors who are coming into the market for the very first time is make sure that you have 20, maybe 25% Down, good amount of healthy equity, full time w two job and, you know, be prepared to you know, take out a loan product that’s a 20 year amortization or shorter right yeah, I

Jared Goldfarb 24:45

mean, that’s a that’s my that’s for me ideal. Yeah, yeah. Yeah,

Yoni Schmidt 24:49

I’m pretty risk averse myself and I don’t have a huge appetite for debt. So I can totally respect that. And most if not all, my properties are I buy them with a high amount of equity. Now that money is expensive, though, it doesn’t necessarily always make a ton of sense, right. And so we’re seeing this transition in the market to where there’s a lot of single family residential investors that are on the sidelines waiting for something to happen, right, or those that are finding those very opportunistic deals. And, you know, they’re going out and they’re buying them. Generally speaking, can you talk a little bit, I guess, about the interest rates level that we’re seeing today? It’s February 2 of 2024. On a 20, year am five year fixed someone with, you know, good income, great credit, excellent credit? Are we talking seven 8%? Are those the are those the rates that we’re talking about? And how do those change, if you were to say 15 year amortization, or 10 year amortization, and be a little bit more aggressive with your pay down? Yeah,

Jared Goldfarb 26:07

it’s sort of a misconception of, of sort of commercial lending, and is that there’s sort of a trade for these, you know, maybe more more equity in and, you know, a more aggressive amortization might get you a better rate. And I think that’s, that’s as a result of sort of the mortgage side of the consumer mortgage lending, where they have different products that have these sort of, you do a 15 year, it’s a better rate, or the jumbo versus whatever, and I don’t, I’m not well versed in that. So I don’t, I don’t, I just know, from my personal experience with my own home, it’s like, you know, you could do a 15 year and get a better rate or, you know, your, your loan to value is a little bit lower, maybe buy down the rate. And, in my world, it’s a little more simple than that, you know, we, we price as a function of, you know, our funding costs, and right now, our funding costs, as a bank BancFirst is, is fortunate that we don’t have to borrow, we can utilize our own deposits, and, but still as a, as an internal cost to us to our sort of our headquarters, you know, our funding sources are, you know, it’s basically the Fed funds rate, which is like 5.4% right now. And so we’ve got to price things with a margin on top of that, that one pays for us here pays for our building pays for, you know, but still remains profitable to the bank to so to throw out a number right now, in the way of like a rate, I mean, I think you you would, you would want to be somewhere, you know, prime right now is eight and a half percent. So, you know, you you, you probably want to be somewhere in the highest sevens two to eight. Because, if it’s a no for me, we were talking about a lot about single family, because I realized that’s kind of your focus. But, you know, for my portfolio, that’s, uh, you know, probably 20% of my overall loan portfolio, most of my portfolio is manufacturing companies and professionals and commercial real estate, some other stuff that I’m dealing with. But so it, it’s interesting in that we have to price to bake in our overhead to but also remain profitable. So people think that, you know, you know, like, with a mortgage rate, it’s typically, you know, whatever the five year 30 year Treasury is plus 1%, or something, or 2%, something like that, is sort of the rule of thumb. Whereas we, we have to price on our cost of money right now, which is high because of the Fed funds rate, and what we have to pay people in their deposits right now, and CDs, whatnot.

Yoni Schmidt 28:54

Right? And interesting. Would it make any difference? If someone came to you and said, I’m gonna put a million dollars in deposits in your bank and, you know, then you, then you don’t have to go out and borrow the money at all or use other deposits? Right?

Jared Goldfarb 29:11

Yeah, absolutely. It’s, it’s something we evaluate as a bank, when we’re looking at a deal. And I think I said earlier, we’re not a transactional bank, like we’re not going to do, we’re not going to come in and do one or two of these deals. It needs to be a true relationship. And like, hey, we want not only do we want this rental property, we want your deposits, we want your, you know, the LLC or the company’s deposits of this of this entity. We want your treasury relationship we want potentially, you know, we own an insurance company, so we want, you know, potentially your insurance business. And so it’s a, it’s a relationship deal. And yes, when we evaluate a credit, we say, okay, they’ve got a million dollars, as you mentioned in your example, that’s the deposit base. Okay, well, that’s great. So that, yes, that can help you tremendous least when it comes to perhaps getting a more of a beneficial rate than say, Joe coming in off the street and has fun one or two rental properties that isn’t going to move his deposit accounts to me which I wouldn’t do that deal anyway, right now, but But historically, if you brought me a couple of rentals, and I’m going to get two loans for, you know, whatever X amount of dollars out of it, that’s not really you’re gonna get the, you know, the regular, regular job right, for, you know, right, but But yeah, it’s a relationship deal. And we evaluate, you know, what our, what our income is to the bank, with Treasury and, you know, deposits and things like that, that it all goes into the calculation for sure.

Yoni Schmidt 30:39

Looking for long term, long term relationships, other than interest rates that, you know, is, of course, a trendy topic right now that everyone’s talking about, what other trends are you currently observing in the commercial lending sector?

Jared Goldfarb 30:58

You know, maybe was that, if any? Well, I mean, there’s the there’s the office sector, that that everyone’s very fearful of right now, and has some vacancies. We’re not in a ton of office, but you’re seeing even here locally, I mean, you’re seeing some office get converted to, you know, residential, because they just can’t fill. And then we’re also seeing office shifting from these sort of older downtown buildings to the newer stuff that, you know, and they’re willing to pay these premiums for these newer buildings. And so these older buildings are slowly going to either become vacant, which some of them are, and or they’re going to have to go in on the few that I know of downtown, they’re going in and renovating some of these older buildings to try and entice people to stay. But so the trend, from that perspective, we’re seeing that, for sure, we’re also seeing sort of there was this influx of ad estate investment money that I’m sure you’ve seen, too. I know, we’ve talked about this a couple of times. There’s this trend of out of state money that, in my mind sort of overpaid for a lot of stuff in town. And now that these rates are resetting, you know, they’re like, well, crap, I, you know, to me, it’s shocking that they didn’t stress test these things at a higher rate level, you know, when they looked at the evaluated the credit, you know, and now we’re, you know, we’re hearing, you know, there’s a couple that I’ve been have crossed my desk over the last couple of weeks, and you’re like, they’re either going to have to go have a capital call with their investors and pay that note down to a more reasonable level, where that it actually works. And when I say works is like a breakeven or you’re gonna have to take a loss and go sell that thing and get out and move on. They can’t ride it out. They mean, at the at the current debt levels, it just doesn’t work. So seeing that a little bit recently, and we’ve certainly passed on a couple of them because of that, but so it’s interesting in that, at some of these rates, as you alluded to it, things just don’t work. So

Yoni Schmidt 33:11

I think yeah, and in many cases, you know, we I’m talking to a lot of investors who say, Hey, I’m sitting on a pile of cash, and I want to go buy a house $250,000 house, and you know, wherever, and it, even if it brings in, you know, $1,800 a month and your cash on cash is five to 6%, right? I mean, it’s a five and a half, why would you risk your money to buy an investment property at $250,000, when you could put on a 10 month CD, and make the same amount with zero risk. And in the instances that they go out, and they finance it, and they put 25% down or 30% down or 50% down, their cash on cash is 4%, they find themselves in situations of negative negative leverage debt, where their cost of capital is higher than their rate of return, which I wouldn’t recommend to any investor, because it seems like it would be eroding your own wealth and the power of your money. Yeah, no, I

Jared Goldfarb 34:13

guess Exactly. Right. I’ve got a couple of my sort of larger single family clients that, you know, they’ve, they’ve purchased some stuff with cash, and they’re just kind of waiting. And if, if and when rates drop, which they will, you know, they’ll they’ll maybe leverage at that point. But they have that’s the thing is going back to my comment about the ideal client and who I’m looking for is someone that was that ability to go in and pay cash for something and then you know, it not I realize not everybody has that ability, but then they’ve got the ability to wait it out. And then they can go back in and leverage later to, you know, reimburse themselves for the funds that they used to buy that property. But yeah, it’s, it’s a while it’s wild time.

Yoni Schmidt 34:57

Yeah, and to those investors who buy those and you know, they find those very opportunistic deals, right? Maybe it’s a dilapidated house that needs a ton of work. And they’re buying it for, you know, very little money compared to what other assets in the area are transacting at. Right? Don’t forget to force value and appreciation and tear property through, you know, rehab and do it nicely. And, you know, if you can tear to the studs, and make sure that you’re doing everything, ah, back flooring, plumbing, electrical, and the whole shebang, so that you don’t have to touch it and have any capex on it for a 10 years. Right. And then in that, in that time, that market cycle, you’ll probably get to pull that money out and come to Jared and refinance your property. And they’ll be checking on single family homes again. Right. And yeah, that may, that would work a lot better. So I’m talking about, you know, a little bit about like the future, what do you see as the future of commercial banking? And how do you think it will evolve? If you had a crystal ball, you know, in the next decade, what in your mind is going to happen to the world of commercial lending?

Jared Goldfarb 36:14

I from a micro perspective, meeting Oklahoma and Tulsa, I see there’s going to be my guess is there’s going to be a lot of consolidation in the way of banks. And there’s going to be, you know, I was looking at the Call Report, which is the year end financials for the for all the banks in Oklahoma yesterday. And a lot of banks are struggling with deposits and maintaining deposits and their full. So a loan to deposit ratio, which is what a lot of banks look at, in the way of, you know, how much power do we have to go lend out, a lot of them are 100%, and over 100%. And, you know, BancFirst sits at about 70%. So we’ve got a lot of, we’ve got the benefit of, you know, powder to go out and, you know, loan in the market, and I think what’s going to happen is it’s going to force some of these smaller banks to want either having to slow down, which they already have to, or go find, can’t do capital or, or go by deposits, which they they’ve had to do, and then three or go, you know, sell the sell the bank. And so I think the future for Tulsa, at least, might be a little shrinkage in the way of a amount of banks. In some some kind of, you know, consolidation. I think, from a macro perspective, across the country. I think there’s been this sort of massive push for like technology and an AI and sort of going away from the traditional brick and mortar banks, which I think is interesting. But I am not ready to go full that direction yet. I think like I said about BancFirst we kind of dip our toe in the water. And we’ve, you know, we’ve tested in a couple markets, this sort of I don’t know, if you’ve been to some of these other banks in town that they no longer have sort of a teller front facing teller teller, it’s more of like an ATM machine that you has a screen on it. And you’re doing. So it’s that’s sort of the future, I think. And I liked that idea in the way of these sort of automated truly automated teller machines that are people in call centers that are transacting, but they don’t have to be a real person in a in a brick and mortar Bank, which I think for, for safety reasons. And, you know, maybe more efficiency and cost savings. It’s, I think it’s a great idea. And I think that’s something that I’d like to see us move towards, at some point. It doesn’t take away the human element. But it sort of creates this, you know, we monitor how many people come into our banks every day, and how many in our income into our branches. And that, you know, I don’t know the last time you walked into a bank, but it’s been a while, right? So the foot traffic, walking into a bank is depleted. And so the need for sort of a new branch is very minimal at this point for us. And so that’s what I see is that gonna happen in the future, too, is sort of this mood shift to sort of a, a, a hybrid of human but still a machine advancement

Yoni Schmidt 39:25

That’s interesting. A lot of people are scared of that because of the loss of, you know, employment opportunities and jobs. But I think what they’re not really recognizing is that human resources are probably the most important aspect of any business. And you’re still going to need those human resources to implement these solutions and make them viable. So, yeah, I agree with that.

Jared Goldfarb 39:51

We certainly made the front facing people Yes, the tellers you might you might shrink there slightly, but you still have backroom operational people we have to increase, you know, we have oversight, we have compliance, May, we’ve added those teams probably at a higher rate than the teller, the teller level, just because that transaction level at the teller level is down. But, you know, you have to make sure that you’re, you know, you’re monitoring things, and there’s compliance. And there’s, you know, we have loan review teams, we have audit all that that ton of back office people. Yeah, I just mentioned

Yoni Schmidt 40:28

to you earlier, I had dinner with Ray Riley the other day, and he, he’s a compliance officer at another local large bank. And, you know, he was telling me about his job, and how much how much it takes to, you know, learn everything and, you know, research and have the ability to find the answers. So, that is interesting. I guess, you know, we talked really briefly earlier about misconceptions in commercial lending, you know, how, if you, if you shorten the amortization, you know, the misconception is that your interest rates is, you know, going to be a little bit more favorable, but that’s not necessarily true in the commercial lending space more so on the Fannie Freddie type of conventional products. What other misconceptions are common in the commercial lending space?

Jared Goldfarb 41:24

Not not to take away from the mortgage, the consumer mortgage lender? You know, I think there’s a, there’s a thought that sort of, we’re similar in our, our day to day as a consumer mortgage mortgage lender, which I look at them, you know, and may some, and I bank, a few of them. So I think they may not like this comment, but I think some of them, they’re more of a transactional, like they’re doing deals, they’re moving to the next person, they’re moving the next person, and they’re, they’re just trying to find the next deal. Whereas me, as I’ve said, multiple times, like I’m looking for a relationship, a banking relationship, long term relationship grow with, and I’m not looking for a transactional relationship. And I, the misconception is that, hey, what’s your rate? What’s, you know, people that are called, don’t really know me or don’t know, you know much about the commercial size, they’re like, all they care about is the rate all they care about is their fees. And that’s it? Well, they’re not really looking at the picture of, you know, how do we grow together? How do we prosper? How do we make my meeting the meeting the borrower’s life better in the way of efficiencies that I can create with our banking products and services? Right, the misconception is that just I’m just another, you know, guy that’s going to just provide you a rate and term. Whereas, you know, if you’re calling me to shop rates, I’m probably again, not the guy that you want to call for that. I want to have a conversation about, what’s your vision? And what, you know, where do you want to take this thing? Versus how do I get the cheapest rate? And, you know, while that stuff is important tonight, and I understand that, I’m looking more for an overall relationship?

Yoni Schmidt 43:09

Yeah, so looking for the people, you’re in the business of helping other people build and grow and scale their businesses, as a long term going concern, and something that will, you know, have a positive impact on the community? Is what I’m taking from this? Yeah, absolutely. Awesome. So last question here, I guess, you know, talking maybe a little bit about the community, what is your approach to building and maintaining, you know, those strong client relationships? In the banking sector? I know, you touched a little bit about, you know, talking to your clients, walking them through your visions? And have you had any opportunities to connect some of your clients to each other? And, you know, help them scale the business in a way that’s a little bit more creative, unique, and

Jared Goldfarb 44:03

through that? Yeah, absolutely. I think one of the best things about, about having a sort of a diverse loan portfolio is that I’ve got clients in all different sectors and all different industries, and I’ve got, you know, plumbing clients, or I have an attorney client, I have a roofing contractor, I have a school I have, you know, retail strips, I have, you know, apartments and manufacture manufacturing companies wholesale supply, like it’s all across the board. And so yes, when I, you know, when I have a situation where someone needs a particular let’s call it a, you know, a plumbing operation, I’m first to say, hey, you know, Joe plumbing company is a client of mine, and they don’t they don’t mind me saying that because they want the business to be referred to them. And so I say, you know, I’m happy to get in touch with the owner. People love that and, uh, Um, you know, so it’s I create sort of opportunities for my clients to, in addition to, you know, hoping that I can help them directly, you know, sort of prosper as well. But how I maintain the relationships is partially that but also, as I touched on earlier, it’s like, I will, I will never get outworked in the way of how I take care of my clients, I’ve never lost it, I’ve never lost a client over lack of response or, or anything like that. In fact, very rarely do when I lose one it, you know it, it’s more of why, again, I chose this place to work for is, it has such a great product that I can offer to my clients, and not just the loan product, but you know, the whole slew of bank products that I can offer. And then I can walk down the hall and talk to our trust operation, or I can walk you know, over here and talk to our treasury group. Our chief credit officer is in our building, even though we’re headquartered out of Oklahoma City. So I can have these conversations at a $12 billion bank, that a lot of other banks of our size, you’re having to call somebody in Wichita, for instance, or wherever, and you’re having to go through a bunch of layers to just have a conversation, where the meantime you’re going to lose the deal, because you’ve taken too long or whatever. And so the speed and adjustability of this operation has been so helpful for me and maintaining those relationships. Yeah,

Yoni Schmidt 46:36

love it. Because I mean, you guys operate, you know, more like a community bank, I guess, than anything. And so that allows you to be quick and agile and responsive. Jared, thank you so much for joining us today talking about, you know, your role as senior vice president of commercial lending at BancFirst, how do people get in touch with you if they are, you know, looking for loan products and they are looking for a long term relationship with a commercial lender at a reputable as you said $12 billion bank? That’s impressive.

Jared Goldfarb 47:17

Yeah, well, best is email to start. And then we can, you know, we’ve got I you know, we have a team here that we have 14 lenders in our office, we we work as a team, no one is competing against each other, which is also unique from a banking perspective. So we, you know, if a particular lender has a, an industry or niche that they’re really solid and comfortable with, a lot of times we’ll if that’s an opportunity for them, we’ll kick that opportunity to them or so, I’ll start by my email, which is Jared jared.Goldfarb, G O L D, F, A R B @Banc B A N C, first F I R ST dot B A N K and it was a little long, but

Yoni Schmidt 48:07

awesome. We’ll put it in the comments. So, yeah, great and reach out to you. And, you know, as we are in the world of property management and love being connected to people, we’d love to get connected with your plumber. Yeah, oh, absolutely.

Jared Goldfarb 48:22

And I I didn’t touch on this, but I I know everybody in my world is appreciative of the of the property manager you keep a lot of this stuff in line. And when we see a property managers evolve, especially Keyrenter, we we are more likely to look at something like that, because of the of the nature of your business and how you all operate. So I think it’s a while it’s it isn’t a very important part of it, for sure, because it’s a lot to manage. Yeah.

Yoni Schmidt 48:50

I appreciate that. Thank you again, thank you again, Jared, for joining us.

Jared Goldfarb 48:55

Yeah. Thanks for having me. Appreciate it.

Outro 49:00

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