South State Correspondent

DECEMBER 5, 2023

Commercial bankers are trusted advisors and have a unique opportunity to understand their client’s specific financial and personal situations, explain the basic concepts of capital markets, and offer prudent and objective advice to help customers reach their goals. It shows the average commercial loan rates for different terms.

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South State Correspondent

JANUARY 3, 2024

One common question we field is recommendations of books to improve either bank performance or personal performance. Since many bankers likely have a self-improvement goal in their New Year’s resolutions, we wanted to put out our recommendations right from the start. Heart Spoken , by Elizabeth Cottrell.

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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. Meanwhile, community banks face net interest margin (NIM) and fee income pressure. commercial and savings banks in the country, with $25.96T in assets and $11.87T in loans.

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South State Correspondent

MARCH 28, 2023

In a recent article ( here ), we discussed why banks that take risks to earn higher revenue demonstrate lower performance as measured by ROA. Empirical evidence, historical bank failures, and common sense teach us that many risks do not translate to higher yields. However, success does not occur by happenchance.

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South State Correspondent

JULY 12, 2023

Some 57 financial institutions will start with FedNow, including about 42 banks (plus a handful of core systems providers and fintechs). FedNow joins The Clearing House, which has offered real-time payments (RTP ® ) for the last five years. bank accounts using RTP. About 92%+ of U.S.

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Payments Management Fraud Data 370

South State Correspondent

JANUARY 18, 2023

However, in 2023, loan prepayment provisions will be essential tools for commercial banks. Loan prepayment provisions lower prepayment speeds (especially in a stable or declining interest rate environment) and drive higher return on assets (ROA) for banks. Why Use Prepayment Penalties? Why Use Prepayment Penalties?

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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. This is how you take advantage of a yield curve inversion to increase the profitability of your customers while doing the same for the bank.

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PYMNTS

JUNE 29, 2020

“With Mastercard’s leading advisory experience, sophisticated commercial solutions and wide network of customers and partners, we will be able to help EedenBull thrive in this market of significant opportunities,” said Yunsok Chang , a Mastercard executive vice president, in a statement.

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South State Correspondent

FEBRUARY 27, 2024

However, we need to understand the meaning of pricing discipline and its effect on community bank performance. 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.

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South State Correspondent

FEBRUARY 18, 2024

We recently reviewed a loan term sheet from a national bank for a $13mm commercial real estate (CRE) loan. The bank offered a 25-year amortizing loan with a ten-year term and required the borrower to hedge its interest rate risk. Bank is willing to provide this Hedge to Borrower upon mutually agreeable terms.

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South State Correspondent

FEBRUARY 20, 2022

Community banks refine their products and services to compete for better borrowing relationships – the better borrowing relationships are associated with better credit quality, meaningful cross-sell opportunities, acceptable margins and fee income, and higher return on equity (ROE). Why Banks Should Take Notice.

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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 ). We compared and contrasted the two strategies and sized the market for community banks. We also shared a table that summarized the two strategies.

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South State Correspondent

MARCH 28, 2024

If your bank has not done so already, it should consider getting involved for the benefit of customers and shareholders. The various programs are wide ranging, complicated, and impactful which is why now is an excellent inflection point to provide financial advisory to both your retail and commercial customers.

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Jeff For Banks

APRIL 4, 2024

This was the question posed to Bank Profitability students as part of the Oregon Bankers' Association's Executive Development Program (EDP). These were up-and-coming bankers, the future leaders of our industry, identifying industry trends that will have the greatest impact on their bank, in no particular order. High lifetime value.

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South State Correspondent

MAY 18, 2022

In two recent articles, we reviewed the banking industry’s deposit behavior with regard to cost of funding earning assets (COF) ( HERE ), and we compared how community banks’ COF behaves relative to national banks in a rising interest rate cycle ( HERE ).

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South State Correspondent

DECEMBER 8, 2023

Recently, the American Banker hosted their annual Small Business Banking Conference in Nashville, and as always, it was one of the better banking conferences of the year. We sat through almost every presentation and took pages of notes. Strike early and often to keep the customer building their relationship with your bank.

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South State Correspondent

MARCH 14, 2022

Community banks have solid competitive advantages when competing against insurance companies (primarily life insurance companies or “Lifecos”) and commercial real estate securitization conduit lenders (CMBS) for commercial borrowers. Commercial Real Estate Market Background. That said, banks can still easily compete.

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PYMNTS

JANUARY 31, 2021

TD Bank is unifying its teams for commercial, corporate and specialty banking to forge TD Commercial Bank, a new entity, according to a press release. This will help in offering new levels of growth, a better client and colleague experience, and more streamlined procedures, the release stated.

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South State Correspondent

NOVEMBER 14, 2022

In this article, we consider if borrowers should refinance at this point in the business cycle, and if so, what are some of the better options for borrowers and lenders. Lenders must recognize that banks are in the business of keeping loans and not making loans. The Loan Refinancing Decision – Bankers As Trusted Advisors.

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South State Correspondent

APRIL 9, 2024

We estimate that the average contractual loan commitment for term credit at community banks has decreased from just under five years in 2022 to just under three years currently. Community banks should carefully consider the prudence of such a strategy from both a risk and revenue perspective. cuts through the end of the year.

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Abrigo

MAY 19, 2023

Loan reviewer training and development What might a loan review curriculum look like and how can your financial institution develop good loan reviewers? WATCH Takeaway 1 Loan review departments often lack funds for training and education, but a shortage of experienced loan reviewers is a challenge for many banks.

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South State Correspondent

JULY 10, 2023

One possible solution to this dichotomy is for banks to offer interest rate swaps to hedge individual loans. This article will review domestic banks’ adoption of interest rate swaps. Next week’s article will consider the challenges and possible solutions for community banks to adopt loan hedging programs.

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South State Correspondent

OCTOBER 19, 2023

If you want to know if your bank has an alignment problem, ask ten co-workers, ”What is your bank’s brand value proposition? If 80% or more say close to the same thing – that is fantastic, and you are likely in the top 1% of bank performance. The Company had to figure out what it was selling to turn things around.

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South State Correspondent

JANUARY 10, 2024

Ask a banker about the value of their bank, and they will either talk about some derivation of book value or earnings multiple. You might find out that your low cost of funds or higher-than-average net interest margin likely drives the bulk of your bank’s value, but then what do you do? Do you reduce your cost of funds?

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South State Correspondent

OCTOBER 23, 2023

Good commercial lenders use commitment letters and proposal letters to their advantage. When properly structured and applied, a proposal or commitment letter will get the lender a better-structured loan at better pricing for the bank and with less competition. A commitment letter evidences the lender’s commitment to lend.

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Strategy Lending Examples Marketing 195

South State Correspondent

DECEMBER 11, 2022

We see many community bank borrowers desperately seeking a trusted advisor to help guide them through this volatile cycle. The graph below shows the lending curve from three months to 20 years and demonstrates the average commercial loan rates for different repricing terms. The Shape of the Yield Curve.

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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. Loan portfolio pipelines (below) are at about 35% from what they were in 4Q of 2022. This means that banks must be choosy on credit and how loans are structured.

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Marketing Examples Capital Management 195

South State Correspondent

FEBRUARY 27, 2022

In our article last week ( HERE ), we discussed how the yield curve is currently flat between the three and 20-year points. 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. Current Risk in Term Lending.

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Lending Community Bank Community Meeting 195

South State Correspondent

NOVEMBER 14, 2022

In this article, we consider if borrowers should refinance at this point in the business cycle, and if so, what are some of the better options for borrowers and lenders. Lenders must recognize that banks are in the business of keeping loans and not making loans. We do not expect that the market is getting it right today, either.

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Analysis Guidelines Marketing Community Bank 195

South State Correspondent

SEPTEMBER 20, 2022

For decades community banks have taken on fixed rate loan risk mostly through the offering of five-year, fixed-rate, commercial term loans. This is probably the most popular structure for real estate-secured term credit at community banks. Fixed Rate Loan Risk – Bank Behavior. The Fixed Rate Loan Issue.

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Community Bank Community Industry Lending 195

BankBazaar

MARCH 28, 2023

R epo rate, w e think we know all about it , but not enough. We know a lot about the Reserve Bank of India (RBI). Yes, the big brother of all, the money-minter, the ‘Don Corleone’ of banking institutions in the country, or whatever hype definition that hits you first time. We bet you already knew that.

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Policies Security Meeting Strategy 145

Gonzobanker

MARCH 14, 2024

Dear bank and credit union software vendors, Mea culpa. I offer up this feedback with good intentions so we can all improve how we demonstrate our products to prospects and customers. Do your homework— My number one piece of advice is to spend time researching the prospective bank or credit union.

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South State Correspondent

JUNE 5, 2023

Community bank cost of funds is jumping up. As shown in the graph below, the net interest margin (NIM) for community banks declined 22bps in Q1’23. The question is – what will happen to community bank’s cost of funds from here? The beta for all banks and various sizes over the entire cycle is listed below.

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PYMNTS

NOVEMBER 9, 2020

But for the commercial spending technology world, these forecasts aren't exactly rosy. What's more, the market lull may offer a moment to focus on innovation for the future as commercial payment habits shift — perhaps permanently. Boosting The Banking Experience.

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Innovation Fintech Payments Mobile 255

South State Correspondent

SEPTEMBER 12, 2022

The banking industry’s cost of funds (COF) is highly correlated to short-term interest rates. However, as of Q2/22, the average community bank’s COF has risen only a few basis points. The COF over the past five quarters is shown for three asset peer groups: banks under $1B (3.5k using that six-month lag.

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Independent Banker

APRIL 30, 2022

Ashley Horner (right), senior vice president and SBA loan administrator, shown with portfolio manager Melanie Elmore, says Summit Bank is on track to make $30 million in SBA loans this year. Loan providers share an infectious enthusiasm and growing optimism for one vertical’s prospects in 2022: commercial lending. By Beth Mattson-Teig.

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Abrigo

JUNE 30, 2022

What Are the Loan Betas in Your Plan for Rising Interest Rates? You might also like this webinar, "Banking in a Rising Rate Environment: Myth Busters Panel." Takeaway 3 Loan pricing philosophy and methodology influences projections of beta value assumptions for commercial loan categories. . What is a loan beta.

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Lending Marketing Analysis Data 195