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.

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Abrigo

OCTOBER 1, 2014

Today’s youth and others across all age groups are placing a significant importance on consuming local food, developing local relationships and improving local communities. This is great news for community banks. A recent American Banker article discussed why the local food movement is good for community banking.

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South State Correspondent

OCTOBER 17, 2022

In a previous article ( HERE ), we discussed the concept of Funds Transfer Pricing (FTP), why systemically important banks and large regional banks incorporate FTP, and why community banks should also consider implementing FTP. This is only one way of building an FTP framework.

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South State Correspondent

FEBRUARY 29, 2024

Since our last update on pricing and credit HERE , commercial loan pricing trends for the first quarter of 2024 continue to be driven by the perceived increase in credit risk, tighter credit supply and banks’ need for wider margins. percentage points bringing forward looking LGD to 44% of the average community bank loan amount.

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Abrigo

OCTOBER 9, 2014

This article is the second in a two-part series on top concerns and growth strategies of community banks. Everyone in the banking industry seems to be asking the same question these days: How can we facilitate growth? banks are moving back into commercial real estate (CRE) lending as the economy continues to improve.

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South State Correspondent

JANUARY 16, 2024

Barings Bank, Orange County (CA), Enron, Long-Term Capital Management, and other entities misused derivatives or didn’t understand the difference between hedging and speculating. Some bankers will soon hear about another example of banks using derivatives that, unfortunately, will lead to losses. No ISDA documents.

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South State Correspondent

APRIL 3, 2023

In recent articles ( here and here ), we discussed why banks that take the interest rate movement risk demonstrate lower performance as measured by return on assets (ROA). Empirical evidence, historical bank failures, and common sense teach us that many risks do not translate to higher yields.

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Abrigo

AUGUST 28, 2022

Leveraging the efficiencies gained from lending software Banks and credit unions that leverage an integrated lending and credit platform reap the benefits of a consistent, efficient and defensible lending program. Would you like other articles like this in your inbox? Lending and Credit Software. Ag Lending.

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Jeff For Banks

MAY 9, 2024

I wrote most of this article early on a Saturday morning during the business session at one of the conferences. During the prior break, I struck up a conversation with a person from Lendio , a small business lending platform, that was there to promote their white-label platform to bankers. They want to grow small business deposits.

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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. A community bank may transact one or only a few balance sheet hedges over many years.

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Gonzobanker

MAY 31, 2019

Financial institutions that want to play in the small business lending sandbox need to bring their digital toys. article , former Small Business Administration administrator Karen Mills said community banks with strong small business customer bases that don’t find new ways to serve them digitally are going to face a “reckoning.”

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South State Correspondent

MARCH 6, 2023

In an article last week ( HERE ), we discussed why real estate loans underwritten at common debt service coverage ratio (DSCR) and loan-to-value (LTV) levels may quickly become substandard credits if capitalization (cap) rates normalize, as expected because interest rates are rising. debt yield ratio ($135k divided by $1.5mm).

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South State Correspondent

MAY 3, 2023

Last week, we published an article [ here ] discussing how fair value accounting for assets and liabilities may have prevented the failure of Silicon Valley Bank, even if sound risk mitigation practices were not resolutely embraced by management. At its basic premise, FTP distributes banking profit between lending and deposits.

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South State Correspondent

MAY 2, 2023

Last week, we published an article [ here ] discussing how fair value accounting for assets and liabilities may have prevented the failure of Silicon Valley Bank, even if sound risk mitigation practices were not resolutely embraced by management. At its basic premise, FTP distributes banking profit between lending and deposits.

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Lending Capital Management Tools 195

South State Correspondent

MAY 2, 2023

Last week, we published an article [ here ] discussing how fair value accounting for assets and liabilities may have prevented the failure of Silicon Valley Bank, even if sound risk mitigation practices were not resolutely embraced by management. At its basic premise, FTP distributes banking profit between lending and deposits.

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Lending Capital Management Tools 195

Abrigo

JUNE 5, 2023

Banking reports to inform risk management and strategy These reports on capital, growth, and liquidity help financial institutions spot warning signs. Takeaway 2 Reports that assess capital, growth, and liquidity provide banking professionals data to drive decisions. Regulators review them to assess safety and soundness.

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South State Correspondent

APRIL 30, 2022

In this article, we analyze the industry’s cost of funding earning assets (COF) and track how community banks’ COF behaves relative to larger banks. In future articles, we will explain our modeling for community banks’ COF based on inflation, Fed Funds rates, consumer consumption and the Fed’s balance sheet runoff.

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South State Correspondent

MARCH 13, 2023

There will be much more discussion and information written on this bank’s collapse, as well as the shutdown of Signature Bank and the story about Sterling Bank, and perhaps others in the weeks and months to follow. Notably, most community banks’ duration risk is in the loan portfolio.

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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 outlined the four main reasons why prepayment provisions increase profitability for banks. This cost to the bank is shown in the graph below.

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Abrigo

NOVEMBER 18, 2016

In a survey of community banks and credit unions at the 2016 Sageworks Risk Management Summit, 42 percent of respondents said Commercial Real Estate, or CRE, lending was their primary focus for loan portfolio growth. For many, commercial real estate lending may be the ticket. This reflects a larger industry trend.

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Gonzobanker

SEPTEMBER 21, 2023

NYMBUS secured Series D financing (led by Insight Partners), partnered with Hurdlr for small business banking; with Atty Bank, Saint Louis Bank ’s legal community bank; and with Roger, Citizens Bank of Edmond ’s military niche bank. Credit union lending platform Clutch partnered with Zest.ai

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Abrigo

APRIL 22, 2024

Recent dynamics of the small business lending market A deep understanding of the small business lending landscape and potential efficiencies can help banks and credit unions grow their portfolios. You might also like this guide for smarter, faster small business lending.

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Abrigo

AUGUST 3, 2017

Cheryl Monk, a writer in New York, reviews the de novo environment in her article published in the July 2017 issue of Independent Banker. She writes that, while in recent years new bank formations have been at an all time low, an increase in de novo activity may be on the horizon. A low interest rate environment 2.

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Jeff For Banks

MAY 20, 2017

Today, I read an American Banker article on how a multi-billion dollar bank is going to ramp up its business lending. Reading between the lines, this bank is likely over the CRE guidance levels, and were probably getting grief from their regulators about it. We perform this service for dozens of community banks.

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Lending Regulation Community Community Bank 60

Abrigo

MARCH 23, 2015

It is only natural for community banks to have loan concentrations that result from the market(s) they serve and the markets they pursue. In today’s times, a high commercial real estate (CRE) concentration is often the result of community banks pursuing opportunity in the market.

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Community Bank Risk Management Community Analysis 150

Abrigo

MAY 5, 2022

Podcasts for Bank & Credit Union Execs & Staff Are Plentiful; Here Are 10 Good Ones These banking podcasts discuss current events, strategic and policy issues, competition, digitalization advice, and more. Would you like other articles like this in your inbox? Lending & Credit Risk. Lending & Credit Risk.

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Gonzobanker

MAY 4, 2020

All the capital flowing into the digital fintech space is helping to solve banking industry challenges. As the industry’s appetite for digital technology grows, the capital that’s been flowing into mostly digital-focused fintech is solving real industry challenges right now. customer impact. TechCrunch, April 2020.

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Jeff For Banks

DECEMBER 16, 2022

Short-term focus is a common trait of banks that focus on shareholder primacy over stakeholder primacy. Total return includes two components: capital appreciation and dividends. As a point of reference, the S&P US BMI Bank Total Return Index for the five years ended December 9, 2022 was -1.21%. MetroCity Bankshares, Inc.

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South State Correspondent

SEPTEMBER 20, 2022

Most banks will target around 6% of revenues next year for their marketing budget, and banks with strong brands and marketing programs target above 7%. We brought back tons of bank input on budget allocations, so look for a future article on how banks plan to spend their marketing budgets next year.

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CFPB Monitor

AUGUST 22, 2016

The CFPB has announced the appointment of new members to its Consumer Advisory Board, Community Bank Advisory Council, Credit Union Advisory Council, and Academic Research Council. Retail Bank, Citibank, New York, NY. Arjan Schutte, Founder and Managing Partner, Core Innovation Capital, Los Angeles, CA. ”

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Jeff For Banks

NOVEMBER 24, 2012

I recently read a NY Times You''re the Boss Blog article regarding how banks can fund small businesses. It’s generally too risky for a bank loan. So, early stage funding typically starts with owner’s capital, then to friends and family if it gets that far, then to angel investors. These businesses needed capital.

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South State Correspondent

AUGUST 15, 2023

This article provides an update on pricing trends driven by our Loan Command aggregated community bank data and highlights some working pricing ideas. Because of the loan mix, banks are currently pricing their weighted commercial portfolio to a 16% ROE, or under their target. Total industry loans grew 5.1%

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Trends Community Bank Community Lending 195

South State Correspondent

AUGUST 10, 2023

In this article, we argue why banks should consider a modern core system in the form of a sidecar as part of their long-term strategy. Understanding A Core System In its purest form, a bank’s core system is a ledger to keep track of accounts and balances. A typical community bank may pay $1.5M

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System Examples Operations Data 195

South State Correspondent

JANUARY 20, 2023

2022 will go down as one of the worst years for community bank loan mispricing when viewed on a spread basis. Rapidly rising rates crushed performance as many banks held a fixed rate constant and/or booked a fixed rate loan at a misguided level. Banks had tight spreads on loans with 1.2 Multifamily is the other call-out.

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Lending Community Bank Community Data 195

South State Correspondent

APRIL 10, 2023

This article explores the risk and what to do about it. CRE Risk Background While ten years ago, community and regional banks use to make up some 55% of the CRE market, in 2023, these banks now compose approximately 72% (below). In secondary and tertiary markets, it is only smaller financial institutions lending.

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Community Bank Community Los Angeles Regional 195

Gonzobanker

SEPTEMBER 10, 2019

For Kony clients, the Temenos deal eliminates the distraction that could have been associated with an IPO and provides a strong, well-capitalized parent. All these potential challenges notwithstanding, Cornerstone views this deal to be good for Temenos and Kony and – from all early indications – the banking industry clients of both firms.

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South State Correspondent

MAY 1, 2024

With financial hardship, competition from dominant players, and a startup budget, Gentle Monster faced many of the same challenges as a community bank. This article highlights Gentle Monster’s five-step process that might change how you look at the future. Leveraging social media, Gentle Monster started to get traction.

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