Mark Nelson, EVP, Columbia Bank: blending flexibility and structure in the credit decision process

RMA Journal, The, July-August, 2003 by Carol McGinn

Mark Nelson, executive vice president and senior credit officer for the Tacoma, Washington-based Columbia Bank, has spent the past 30 years in banking--21 as a member of RMA's Puget Sound Chapter and 20 as a chapter board member. He is currently the chapter's immediate past president and chair of its community bank committee.

Nelson brought his years of experience to Columbia, with $1.7 billion in assets, after stints as chief credit officer for two small community banks in the Pacific Northwest, and as a regional manager for Bank of America's Business Banking Group.

Nelson is responsible for the bank's credit policy, credit portfolio management, approval process, training for the commercial and consumer credit areas, and the bank's loan committee for larger credits.

Having had experience in both large national banks and in community banks, Nelson sees many differences in the credit risk assessment and approval process and in how the credit portfolio is monitored.

"Specifically, community banks tend to favor a less structured process," he says. "Each way has benefits, and I see the challenge in my bank to effectively blend the two."

As part of the senior management team of a community bank, Nelson believes it is important "to get out of the bank at least weekly with lenders on calls." He says the calling process is vital to a community bank "because we are squeezed from both sides" between the smaller community banks and thrifts and the major regional banks, and we need to be "community-focused, visible, and highly responsive to the needs of the customers."

"The primary benefit to a calling program, of course, is to stay in touch with our customers," he adds. "It also helps bring perspective to the issues our clients face, to get firsthand feedback on the local economy and credit quality, and how the bank is serving its client base. It's also an important training tool for lenders in that senior managers can help them deal with the more complex issues that arise in calls, particularly as they relate to policy issues."

Nelson says that regular contact with customers is just one of the things community bankers can do to add value to their client relationships. "Being a knowledgeable partner that our clients use is another," he adds. "Haying competitive products that meet the most common needs and a convenient branch network are also crucial."

Nelson has seen other changes in the industry as well, including the increasing focus on enterprise risk. "We're seeing bankers and regulators looking at more than just credit and market risks. Both groups are taking a broader look at risk in general and how it relates to the entire organization. We're all being held to a higher standard by regulators and shareholders. I think this is going to be one of the biggest factors in the way banks do business in the future."

Nelson is a long-time RMA member, crediting the association with being "a source of mentors for me, which is one reason I felt it was important to stay involved." During this time, he has seen the organization deepen its old focus of primarily credit training into a much broader coverage of the whole topic of risk, from the underwriting of the individual loan to the monitoring and analysis of the credit portfolio.

"For me, it's easy to see RMA's value."

[c] 2003 by RMA. McGinn is a Ft. Washington, Pennsylvania-based freelance writer and desktop publisher specializing in financial and business topics.