South State Correspondent

AUGUST 29, 2022

Over the last 15 years, an ever greater percentage of community banks have embraced some form of interest rate hedging. Approximately 1,000 banks in the country use some form of hedging products to manage risk, generate fee income, or provide product offerings demanded by their customers. Loan-level Vs. Balance Sheet Hedging.

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Community Bank Community Strategy Regional 195

South State Correspondent

AUGUST 29, 2022

Over the last 15 years, an ever greater percentage of community banks have embraced some form of interest rate hedging. Approximately 1,000 banks in the country use some form of hedging products to manage risk, generate fee income, or provide product offerings demanded by their customers. Loan-level Vs. Balance Sheet Hedging.

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Community Bank Community Strategy Regional 195

South State Correspondent

JUNE 13, 2023

On our loan hedging desk, we work with hundreds of banks ranging in size from just over $100mm in assets to some national banks with over $1T in assets. Combined with our relationship profitability model, Loan Command, we see the pricing of thousands of commercial loans per month as small as $30k and as large as multi-billion dollars.

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Marketing Examples Capital Management 195

South State Correspondent

MAY 15, 2023

The CLO was lamenting how he was losing quality loans and deposits to three aggressive national banks in the territory. An example was a $1.95mm owner-occupied CRE loan, where the borrower had multiple operating accounts totaling almost $500k. Therefore, the borrower was offered a fixed-rate loan 1.75% lower than their current rate.

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National Community Bank Community Examples 195

South State Correspondent

JULY 19, 2023

Of the largest 250 banks, 90% are using interest rate swaps, and because these largest 250 banks hold 83% of all loans, interest rate hedging tools are widely used in approximately 75% of the loan marketplace. This is why the current inverted yield curve makes loan hedging especially attractive to community banks.

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Community Bank Community Compliance Marketing 195

South State Correspondent

AUGUST 21, 2022

Last week we wrote about loan-level vs. balance sheet hedging for community banks and provided our loan proposal generator ( HERE ). In this article, we will discuss what community banks should look for in a hedge provider, specifically in a loan-level hedging program.

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How To Community Bank Community FDIC 195

South State Correspondent

NOVEMBER 2, 2022

This has caused more of a yield curve inversion and is a prime opportunity for community banks to use a loan hedging program to offer fixed-rate loans for 20 years. Therefore bankers will make more net interest margin (NIM) on adjustable-rate loans than on fixed-rate loans. Pricing on ARC Hedged Loans.

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Lending Community Bank Community Meeting 195

South State Correspondent

JUNE 9, 2022

The majority of fees generated by larger banks is related to deposit and loans – business lines that community banks already maintain. It appears that most of the fee income difference stems from loan fees, and we believe that the majority of that difference stems from hedging programs. Industry Comparison For Fee Income.

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Community Bank Community Comparison Fintech 195

South State Correspondent

JULY 26, 2023

The Yield Curve Impact The graph below shows the current lending curve from one month to 20 years and demonstrates the average commercial loan rates for different repricing terms. The chart uses the average credit spread (2.25%) to achieve a 15% ROE for a bankable loan, $1mm size, with cross-sell opportunity and an overall relationship.

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Community Bank Community Strategy Atlanta 195

South State Correspondent

JUNE 22, 2020

CenterState has been involved in those same restructurings both as a lender and as a hedge provider under the ARC program. We have learned some valuable lessons that we would like to share.

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Community Bank Community Payments 195

South State Correspondent

APRIL 10, 2023

Most agree that attempt to fair value certain financial instruments would still not approximate the settlement of that instrument between a motivated buyer and seller – for example, there are many unpredictable or unknown factors to be able to value instruments like loans and deposits.

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Community Bank Community Security Capital 195

South State Correspondent

JUNE 8, 2022

For decades community banks have structured fixed-rate loans with adjustable features – the most popular structure is a ten-year fixed-rate loan with a five-year reprice. What percentage of a community bank loan portfolio should be fixed-rate, and what fixed rate term is optimal for a loan portfolio?

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Community Bank Community National Strategy 195

South State Correspondent

APRIL 18, 2022

We used a RAROC model and ran various scenario analyses for a typical community bank loan based on different loan terms, with and without fee income, and we show that community banks’ commercial loan performance would significantly benefit by generating just 25bps in additional fee income. Industry Comparison of Fee Income.

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Lending Community Bank Community Comparison 195

South State Correspondent

NOVEMBER 29, 2023

Community banks are striving to increase loan yield and maintain their cost of funding (COF). Unfortunately, pressure on COF is expected to remain, and loans will reprice slower than expected as borrowers with below-market rates will wait until the last maturity day to refinance their credits.

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Community Bank Community Tools Strategy 195

South State Correspondent

MARCH 5, 2022

In this current market, swap spreads are negative, and banks that can utilize swap spreads in pricing loans gain a substantial pricing advantage. Banks that correctly price their commercial loans on the curve using swap rates may be able to achieve nine to 58 basis points (bps) net interest margin (NIM) gain. Conclusion.

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Community Bank Lending Community Regional 195

South State Correspondent

DECEMBER 5, 2020

On October 23, 2020, the International Swaps and Derivatives Association (ISDA) published the Fallback Protocol (Protocol) that allows firms that use LIBOR to transition to SOFR when LIBOR becomes unavailable.

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Bussman Advisory

JUNE 30, 2022

The post Most prominent crypto hedge fund just defaulted on a $670m loan | EU agrees on crypto landmark regulation | The war for tech talents is only beginning appeared first on Bussmann Advisory AG. Subscribe now to our weekly newsletter. Contact us at info@bussmannadvisory.com for more details.

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Regulation social media Fintech blockchain 52

South State Correspondent

MAY 3, 2023

The graph below compares the loan composition of FRB and all banks in the country under, and over, $25Bn in assets. Next, consider the repricing buckets for all loans at FRB compared to other banks in the country. Next, consider the repricing buckets for all loans at FRB compared to other banks in the country.

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South State Correspondent

MAY 2, 2023

The graph below compares the loan composition of FRB and all banks in the country under, and over, $25Bn in assets. Next, consider the repricing buckets for all loans at FRB compared to other banks in the country. Next, consider the repricing buckets for all loans at FRB compared to other banks in the country.

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Lending Capital Management Tools 195

South State Correspondent

MAY 2, 2023

The graph below compares the loan composition of FRB and all banks in the country under, and over, $25Bn in assets. Next, consider the repricing buckets for all loans at FRB compared to other banks in the country. Next, consider the repricing buckets for all loans at FRB compared to other banks in the country.

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Lending Capital Management Tools 195

South State Correspondent

MARCH 5, 2024

Several measurable factors drive loan (and, by extension, bank) profitability, including loan size, credit quality, term, cross-sell, and upsell. In this article, we will consider how and why loan size is one of the most significant drivers of profitability for community banks and what community banks can do to improve performance.

Community Bank 195

Community Bank Community National Lending 195

South State Correspondent

MARCH 5, 2024

Several measurable factors drive loan (and, by extension, bank) profitability, including loan size, credit quality, term, cross-sell, and upsell. In this article, we will consider how and why loan size is one of the most significant drivers of profitability for community banks and what community banks can do to improve performance.

Community Bank 195

Community Bank Community National Lending 195

South State Correspondent

JANUARY 22, 2023

In a previous article ( here ), we discussed why commercial loan prepayment protection would be a critical return on asset (ROA) driver for community banks in 2023. We also discussed the four standard prepayment provisions for commercial loans (step-down, lock-out, defeasance, and symmetrical breakeven provision).

Community Bank 195

Community Bank Community Capital Maine 195

South State Correspondent

SEPTEMBER 11, 2023

Community banks were challenged with increasing deposit costs and a lower increase in loan yield than the industry average, leading to a decline in NIM. CRE portfolio rollover risk as loans mature and borrowers face higher interest rates (especially for office properties). While the banking industry reported an annual loan growth of 4.5%

Community Bank 195

Community Bank Community FDIC Industry 195

South State Correspondent

AUGUST 15, 2022

Better products, faster service, or insightful advice can translate into additional loans, better credit spreads, or extra fee income. Sometimes just a graphics tool can help a banker win more loan business. Why The Loan Proposal Generator Works. Touchpoints are critical in sales, including loan sales.

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Tools Lending Online Training 195

South State Correspondent

JANUARY 30, 2024

A typical current strategy for community banks when originating commercial real estate loans is to offer floating-rate loans or shorter-term adjustable structures. Borrowers are waiting for the Fed to lower short-term interest rates, hopefully translating into a refinancing opportunity for the borrower at a lower loan rate.

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Community Bank Case Study Community Strategy 195

South State Correspondent

FEBRUARY 27, 2024

Community bankers need to practice realistic loan pricing discipline. In this article, we would like to define loan pricing discipline and cover bid, why it matters, and demonstrate how most community banks currently are not using loan pricing discipline.

How To 195

How To Community Bank Community Management 195

South State Correspondent

AUGUST 15, 2022

Better products, faster service, or insightful advice can translate into additional loans, better credit spreads, or extra fee income. Sometimes just a graphics tool can help a banker win more loan business. Why The Loan Proposal Generator Works. Touchpoints are critical in sales, including loan sales.

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Tools Lending Online Training 195

PYMNTS

AUGUST 21, 2020

Citigroup alleges it transferred the money in error from its own accounts on behalf of Revlon, for whom it is acting as an agent for a loan involving dozens of creditors, including the big hedge funds. million to cover interest payments on behalf of Revlon on a loan the hedge fund holds. On Monday (Aug.

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South State Correspondent

AUGUST 21, 2023

This risk magnifies margin erosion for those banks that hold fixed-rate securities and loans. This trend is precarious at the end of a Fed Funds tightening cycle as quantitative tightening (Fed balance sheet reduction) continues because deposit beta increases, but loan betas fall, resulting in decreased margins.

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Community Bank Community Capital Analysis 195

South State Correspondent

FEBRUARY 27, 2022

This makes term loan pricing between three years and 20 years virtually identical. Banks that cannot offer competitively priced term loans out to 20 years may be at a significant disadvantage when competing or retaining top-quality customers. Booking long-term fixed-rate loans on-balance-sheet may not make sense for many banks.

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Lending Community Bank Community Meeting 195

South State Correspondent

MARCH 30, 2020

We have been writing on the various strategies available to community banks when structuring commercial loans in this current challenging business and credit environment.

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Case Study Study Community Bank Strategy 195

South State Correspondent

FEBRUARY 22, 2024

Compared to investments, loans, deposits, and fees, capital is magical when it comes to these properties. We allocate capital and risk just thinking about the life of our next investment, deposit, or loan. Expense control, loan growth targets, managing cost of funds and customer acquisition dominate executives’ time.

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How To Strategy Capital Lending 195

South State Correspondent

JANUARY 13, 2020

HEDGING FOR LOAN GROWTH With a flat and low yield curve, borrowers’ demand for long-term fixed-rate loans is high. The difference between five and ten-year loan rates is currently only nine basis points, and the difference between five and 20-year loan rates is 21 basis points.

Marketing 195

Marketing 195

South State Correspondent

JANUARY 13, 2020

HEDGING FOR LOAN GROWTH With a flat and low yield curve, borrowers’ demand for long-term fixed-rate loans is high. The difference between five and ten-year loan rates is currently only nine basis points, and the difference between five and 20-year loan rates is 21 basis points.

Marketing 195

Marketing 195

South State Correspondent

JANUARY 13, 2020

HEDGING FOR LOAN GROWTH With a flat and low yield curve, borrowers’ demand for long-term fixed-rate loans is high. The difference between five and ten-year loan rates is currently only nine basis points, and the difference between five and 20-year loan rates is 21 basis points.

Marketing 195

Marketing 195

South State Correspondent

OCTOBER 25, 2020

Most community banks have some loans or deposits tied to LIBOR, and many community banks have used LIBOR hedges to help borrowers manage interest rate risk. Firms that sign up for the Protocol agree to the spread adjustment and the fallback rates if LIBOR becomes unavailable in the future.

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