Loan Officer Productivity

Banks that change the size requirements for their target customers have the potential to realize large productivity gains, according to a survey of 73 banks with assets between $2 billion and $44 billion. The survey shows that, in the middle market, loan officer productivity is more than twice that of banks with minimum customer sales of at least $10 million than for banks that serve customers with sales of less than $3 million. Banks that include these smaller customers in their middle-market portfolios hamper officer productivity by making officers spend time on many smaller loans than on a few large loans. These banks might consider moving customers with less than $10 million in sales into a small-business retail area to enhance middle-market officer productivity. Although the survey also shows that productivity increases as size requirements are raised for corporate borrowers, productivity per officer declines for banks requiring sales greater than $125 million because larger customers tend to have lower loan balances.