South State Correspondent

JANUARY 10, 2024

Community banks’ use of swaps (banks’ primary tool to hedge interest rate risk on loans) has increased substantially over the last ten years. The market expects the current inverted yield curve to remain through much of 2024 (based on long-term interest rates and the expected rate cuts in 2024). Only 304 banks (or 6.7%

Community Bank 195

Community Bank Community National Regional 195

Perficient

APRIL 3, 2024

Perficient insurance experts were interviewed for Forrester’s report, “ The Top Emerging Technologies In Insurance, 2024 ,” and discussed technologies expected to emerge in the insurance industry over the next five years, considering them now, and in the short-term, medium-term, and long-term future.

Technology 221

Technology Report social media Industry 221

South State Correspondent

MARCH 19, 2024

In two previous articles ( here and here ) we discussed how loan size and loan term affect the profitability of commercial loans. Being able to quantify profitability and identify profitable customers is key to using upsell and cross-selling techniques in banking. In the banking industry, the time factor is extremely important.

Community Bank 195

Community Bank Community Industry Cards 195

South State Correspondent

NOVEMBER 29, 2023

We have created and used a novel structure to take advantage of the inverted yield curve to allow community banks to increase net interest margin (NIM) and fee income on these existing fixed-rate loans. We created this “step-up” loan structure using our ARC program.

Community Bank 195

Community Bank Community Tools Strategy 195

South State Correspondent

FEBRUARY 12, 2023

We also pointed out that the current inverted yield curve is unusual and is expected to last for the near term. Banks should now be prepared to actively manage liquidity levels and deposit betas for the next few years as the recent rise in short-term rates and the Fed’s liquidity drain pressures banks’ funding.

Community Bank 195

Community Bank Community Case Study Strategy 195

Perficient

DECEMBER 22, 2020

Data architecture modernization provides the ability to understand the information effectively, use the data efficiently for market growth, create new revenues, and gain customer satisfaction. . People -Leverage existing people, cross-train, and gain benefits using modernization frameworks. Ex: multi-cloud strategy. .

Data 493

Data Training Analysis Tools 493

Abrigo

NOVEMBER 12, 2023

Support credit risk management Understanding loan covenants, when financial institutions should use them, and how to monitor them supports strong lending portfolios and credit risk management best practices. They are designed to help maintain the financial health of borrowers throughout the loan term.

Risk Management 221

Risk Management Lending Policies Management 221

South State Correspondent

MAY 15, 2023

We looked at the term sheet offered by the national bank and pointed out the strategy that this national bank was deploying and how the community bank could respond. The national bank issued a term sheet that offered the borrower a five, seven, and ten-year fixed rate loan at 5.55%, 5.48%, and 5.47%, respectively.

National 195

National Community Bank Community Examples 195

Perficient

FEBRUARY 4, 2021

In order to do this, we “think big” by helping our clients identify use cases and brainstorm applications to their challenges. After, we decompose those uses cases into functional and technical capabilities. And then we “start small and act fast” by prioritizing use cases. Perficient’s Approach to AI as a Systems Integrator.

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System Data Analytics Resources 531

South State Correspondent

NOVEMBER 7, 2023

We review hundreds of term sheets and proposals for commercial borrowers each month. Why “Power Of Three” Works as a Loan Proposal Tactic The “power of three” as a loan proposal tactic is used universally in marketing products and services. Positioning through comparison is a potent tool.

Community 195

Community Comparison Tools Marketing 195

Perficient

OCTOBER 27, 2022

In addition, the regulators are trying to keep as many resolution options as possible open for the FDIC to resolve a firm in a way that minimizes the long-term risk to the Deposit Insurance Fund (DIF). The required long-term debt could be imposed not only on Category I but also on Category II and III bank organizations.

Capital 275

Capital Regulation FDIC Regional 275

South State Correspondent

MAY 30, 2023

Loan Structuring With The Current Yield Curve The graph below shows the lending curve from three months to 20 years and demonstrates the average commercial loan rates for different repricing terms. We expect this phenomenon to remain over the next few months as the Fed is unlikely to decrease short-term rates in the near future.

Examples 195

Examples Course Community Management 195

Perficient

JULY 11, 2022

One could consider it the “layaway of the digital age,” except unlike with layaway, the consumer does not have to pay in full before taking their purchase home, using the service, obtaining the tickets to an event or destination, etc., which is a huge draw to using BNPL as a non-cash payment method. Which one is best for me?

Fintech 474

Fintech Trends South Dakota Apple 474

South State Correspondent

JULY 26, 2023

Instead, the more painful scenario for the banking industry is the following: no recession, short-term interest rates holding steady in anticipation of inflation reaching target rates, and a prolonged inverted yield curve. Short-term, fixed-rate loans are not attractive to borrowers because longer-term commitments are up to 1.76% cheaper.

Community Bank 195

Community Bank Community Strategy Atlanta 195

South State Correspondent

JULY 30, 2023

Most importantly, is there an ROE level ensuring a bank remains long-term independent and healthy? The Required ROE The “required” ROE for a bank is a complex question, but we will define it as the long-term horizon equity investors require to retain ownership of the bank. The KBW Nasdaq Bank index’s long-term beta is 1.12.

Community Bank 195

Community Bank Community Capital Policies 195

South State Correspondent

OCTOBER 4, 2023

Stable short-term rates for the next year or longer will increase cost of funds (COF), hold yields on loans steady, decrease net interest margin (NIM), and pressure return on equity (ROE) for new credit assets. Using incremental COF methodology results in a much lower ROE, diminishing shareholder value further.

Community Bank 195

Community Bank Community Capital Comparison 195

South State Correspondent

MARCH 26, 2024

Short-term loan commitments decrease relationship banking opportunities. Credit commitments with short remaining life have less value for borrowers and borrowers are more likely to extinguish this debt with business cash flow versus retain the commitment term. Longer loan commitments lead to more relationship opportunities.

Community Bank 195

Community Bank Community Security Resources 195

Perficient

AUGUST 12, 2022

A decision made using AI-driven intelligence will ensure that the best outcome can be achieved against change and disruption. How Perficient Uses AI to Help Clients Succeed. In order to do this, we “think big” by helping our clients identify use cases and brainstorm applications to their challenges. Mitigate AI project risk.”.

Report 275

Report Data Analytics Industry 275

South State Correspondent

FEBRUARY 20, 2022

The table below shows the prevailing interest rate and P&I payment using a 25-year amortization schedule for a $1mm loan for three years out to 20 years. Each fixed rate option is priced using the same margin over the yield curve and represents how banks are currently pricing their better borrowers. Why Banks Should Take Notice.

Community Bank 195

Community Bank Community Marketing Regional 195

South State Correspondent

JULY 10, 2023

With an inverted yield curve, borrowers have a pricing advantage to lock in long-term fixed-rate loans, while lenders strongly desire to limit loan duration. A recent paper analyzed domestic banks’ use of interest rate swaps, and we will summarize their findings in this article.

Community Bank 195

Community Bank Community Tools Management 195

South State Correspondent

JUNE 8, 2022

With short-term interest rates expected to rise through 2022, many community banks are reconsidering their ALCO strategies. What percentage of a community bank loan portfolio should be fixed-rate, and what fixed rate term is optimal for a loan portfolio? National Bank Strategies For Interest Rate Risk Management.

Community Bank 195

Community Bank Community National Strategy 195

South State Correspondent

OCTOBER 23, 2023

Good commercial lenders use commitment letters and proposal letters to their advantage. It is only furnished after preliminary credit approval and typically contains the following language: lender commits to provide the loan on, and subject to, the terms and satisfaction of conditions set forth herein.

Strategy 195

Strategy Lending Examples Marketing 195

Perficient

MARCH 30, 2023

A Hybrid Road to a Long-term Solution Migration to the cloud and data transformation does not need to happen overnight. For many, this means starting their journey using microservices. The computing and storage of cloud data occur in a data center, rather than on a locally sourced device. Contact one of our experts today.

Training 492

Training Security Data Regional 492

South State Correspondent

OCTOBER 9, 2023

A community bank may increase ROE substantially by using internal refinancing strategies to secure its top relationships that provide cross-sell opportunities, efficiencies, fee income, and growth opportunities. Banks that cannot measure ROE for each relationship can use a subjective test.

Tools 195

Tools Community Bank Community Strategy 195

Perficient

FEBRUARY 10, 2021

The benefits of the cloud generally are well known – the ability to innovate, use bandwidth as needed, bring data together and store it safely and securely, use the many services that cloud vendors provide, and work from anywhere. We just said you need managed services – what are they? The Benefits of Managed Services.

Management 547

Management Operations Innovation Security 547

Abrigo

FEBRUARY 1, 2023

However, the Fed has been signaling that they are not yet done and that their expectations for long-term interest rates are at a higher level than many people expect. But what does a 5% fed funds rate signal for longer-term Treasury rates? they may wonder. A fed funds rate that stays in the 4.5-5.5%

Marketing 195

Marketing Strategy eBook Policies 195

Chris Skinner

AUGUST 21, 2019

The term The Internet of Things (IoT) was first used twenty years ago. Twenty years later, IoT is emerging rapidly. We have our cars and homes networked but, more than this, we have gadgets like Google Home, Siri and Alexa.

Google 402

Google Fintech 402

Chris Skinner

OCTOBER 7, 2019

In general, the term challenger banks has become accepted to be used in FinTech circles as banks … The post What does the term ‘challenger’ really mean? I had a few people haul me up over my critique of Nicholas Megaw’s article in the FT last week, including Nicholas himself.

Fintech 298

Fintech Digital Banking 298

Abrigo

JUNE 11, 2021

Takeaway 2 Asset/liability management models use earnings or income simulation models and gap analysis to measure short-term IRR. Takeaway 3 The most common model to measure long-term IRR is an economic value of equity (EVE) analysis. Regulatory Emphasis. Interest rate risk measurement.

How To 195

How To Risk Management Analysis Kansas City 195

Perficient

DECEMBER 17, 2020

As if 2020 didn’t hit us with enough changes, Microsoft revealed some new terminology that all Dynamics 365 and Power Platform users should be aware of. These customary terms are a positive step in reducing the learning curve of the Microsoft Dataverse and making it more accessible to new users. The possibilities are endless!

Data 340

Data US Security Technology 340

South State Correspondent

AUGUST 16, 2023

Even if your bank has limited consumer exposure, given that the consumer composes approximately 66% of the US economy, and, according to the yield curve and market pundits, we are all staring into a recession, paying close attention to consumer trends is critical. There is a record low in rate/term refinancings.

Trends 195

Trends Cards Capital Data 195

South State Correspondent

MARCH 5, 2022

With short-term interest rates rising and long-term rates still at historically low levels, all bankers should understand how swap spreads may provide a competitive lending advantage. Using Swap Spreads for Loan Pricing. Community banks face intense competition for profitable borrowers and relationships. Conclusion.

Community Bank 195

Community Bank Lending Community Regional 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.

Lending 195

Lending Community Bank Community Meeting 195

Perficient

FEBRUARY 18, 2021

Best Practices dictate that most payments should be done using a batch payment process. This discussion will focus on batch payment processing using Oracle Cloud Payables. Each supplier must be paid on time using the correct payment method from the correct bank account. Manual payments should be done only on an exception basis.

Payments 360

Payments System Study Groups 360

Perficient

JANUARY 28, 2021

So, how do you know what type of manufacturing environment your company is using? Using a simple table as an example. Terms most commonly heard in a Discrete Manufacturing Environment. The Process (terms associated with the job structure) and the Output (terms associated with the physical material).

Maine 332

Maine Examples Operations Groups 332

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. Loan Term, Prepayment Speeds, and ROE Impact.

Lending 195

Lending Community Bank Community Comparison 195

Perficient

JULY 29, 2020

COVID-19 appears certain to be a long-term challenge, with successive, overlapping waves of surge and retreat. How will healthcare organizations embrace this opportunity to supercharge their digital assets and use them as a key pillar of future business resilience? Healthcare providers and payors remain immersed in the pandemic.

Meeting 365

Meeting Resources Technology Management 365