CIVIC Financial Services has emerged as a leading private money lender focused on providing innovative funding solutions for non-owner-occupied residential investment properties. Originate Report had the privilege of catching up with CIVIC President William Tessar to get his take on the current situation in the lending industry and how his company leverages its unique corporate culture to deliver superior results to its growing customer base.
What were the most significant developments during 2022 within the lending industry and how did CIVIC adapt to them?
It is no secret that highly volatile interest rates have dominated the headlines within the lending industry this year. In over four decades of experience in the financial marketplace, I have never seen them fluctuate so rapidly in such a short period. As the market went through the interest rate turmoil, we saw an increase in our investor and broker clients. Our uninterrupted funding during this time created a pipeline that grew to just under 2,000 loans—adding a proportionate amount of pressure organizationally on CIVIC to service the dramatic uptick in volume. We emphasized supplementing our team with quality talent and going the extra mile for our growing customer base, leveraging our decades of collective experience to adapt to the shifting dynamics while integrating technology to streamline our workflow and optimize efficiency. Most of our team members have the requisite discipline and familiarity within the conventional lending market, which translates into our outstanding loan performance.
The overwhelming majority of lenders were interdependent on Wall Street and the secondary marketplace, which drastically inhibited their ability to sell loans. This subsequently resulted in margin calls, widespread pauses on lending, and restructuring of capital bases. Fortunately, this was not the case at CIVIC. Being poised beneath the umbrella of a publicly traded bank has allowed us to balance sheet the originated loans and not subject ourselves to that secondary market dislocation. We have approached loan originations with Quality, Quantity, and Consistency, and doing so under this model has enabled us to grow exponentially over the last two years.
Our ability to deploy capital through our lending operation truly sets CIVIC apart from the competition. We provide our client base with an unparalleled peace of mind in knowing that our independence from external funding sources translates into unmatched reliability no matter what happens on the larger economic scene. We consistently lent through COVID-19 and have continued business as usual, all the while originating under interest rates significantly higher than they were at the beginning of the year. The 21,000+ loans we have closed at CIVIC remind our investors that we show up when they expect us to.
What do you think 2023 and beyond has in store for the lending industry?
I foresee rates continuing to rise throughout the initial first quarter of 2023 before finally leveling off and stabilizing. As soon as some modicum of stability establishes on Wall Street, more players will enter the lending marketplace and drive collective loan value upwards. In the interim, the conventional lending business will continue to struggle amidst the elevated interest rates, leading to further consolidation within the marketplace. At the same time, these dynamics will present opportunities within the business purpose loan (BPL) space to augment the decreased occurrence of refinancing initiatives—which is ideal for CIVIC’s plans to continue to grow and scale our lending activity over the next year and beyond.
What makes CIVIC unique from an organizational standpoint?
The CIVIC corporate culture is what distinguishes us as an organization. First and foremost, we emphasize the health and well-being of our employees. We have an entire People & Culture team comprised of staff members whose full-time jobs are dedicated to enhancing the lives of the CIVIC team. Throughout the course of the pandemic when the world shut down, this contingent was pivotal in creating our CIVIC Anywhere initiative, which enabled our employees to take advantage of the inherent flexibility and benefits of teleworking—whether that was spending more quality time with family, relocating to geographic areas with more a more sustainable cost-of-living, or enhancing productivity by eliminating unnecessary commutes. CIVIC Anywhere changed the way we approach the marketplace and our people as it simultaneously optimized our productivity and work-life balance, a win-win situation if there ever was one. It is directly representative of what we stand for as a company. The CIVIC core values are the bedrock of who we are as an organization—they guide our conduct on both a macro- and micro-scale, whether that be an individual employee navigating everyday decisions with a client or the front-office staff collectively implementing company-wide policies. Our executive team spent 14 months with an outside firm hammering out these core values so they would stand the test of time and provide true value to employees and, in turn, to our customers. Regardless of what is happening in the outside world, if you consciously apply these values every day, you will be a better version of yourself. That is why all our employees carry a coin with these values engraved in them—a daily reminder of what we stand for as a company: (1) Act with honor; (2) Be a great partner; (3) Communicate clearly; (4) Create smiles; (5) Simplify.