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. While in that blog, we specifically considered the risk-return tradeoff for credit risk; in a future article, we’ll consider interest rate risk.

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The Financial Brand

OCTOBER 18, 2023

This article Marketing Emphasis Drives Loan & Deposit Growth for Community Banks: Study appeared first on The Financial Brand. As deposit pressure mounts industrywide, a study of banks with under $2 billion of assets makes a case that bigger marketing budgets can help.

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South State Correspondent

OCTOBER 4, 2023

If you want to grab a material amount of new deposit balance, offer a 5.05% money market rate, post it all over Instagram, and sit back and watch the money roll in. In this article, we will show you 15 proven deposit marketing campaigns that will rack up deposit-gathering wins while building a high-performing bank in the process.

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South State Correspondent

MARCH 5, 2024

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. Cross-sell opportunities, especially demand deposits in today’s market, can double the ROA/ROE on an average-sized commercial loan.

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South State Correspondent

MARCH 5, 2024

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. Cross-sell opportunities, especially demand deposits in today’s market, can double the ROA/ROE on an average-sized commercial loan.

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South State Correspondent

MARCH 28, 2024

In this article, we breakdown the details and discuss seven strategies and seven tactics banks use to set themselves apart. By taking a leadership role, banks can assist customers and their communities and generate loans, deposits, and fees in the process. These acts impact more than 55,000 locations throughout the U.S.

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South State Correspondent

FEBRUARY 27, 2024

Community bankers need to practice realistic loan pricing discipline. However, we need to understand the meaning of pricing discipline and its effect on community bank performance. Market Intelligence We analyzed the last 1000 loans priced on our hedging desk, and the credit spread, and size are plotted below.

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South State Correspondent

FEBRUARY 20, 2023

Community bankers need to understand their competitive landscape. Who the competition is, what the lending competition is offering, their delivery channels, and service levels can help community banks differentiate their services and enhance their competitive advantage.

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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

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. With the development of the term SOFR market, BSBY offers no perceived advantages over SOFR, Fed Funds, or Prime. No ISDA documents.

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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 ). Deposit Behavior In This Tightening Cycle Versus Last Three.

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South State Correspondent

APRIL 1, 2023

In this article, we recap the latest data on deposits and banking in order to give you an updated picture. The proposed regulations will impact about 30 banks, and the concepts will filter down to larger community banks between $50B and $100B. The move will increase the cost of compliance and the cost of capital.

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South State Correspondent

FEBRUARY 29, 2024

This article provides an update on pricing trends driven by our Loan Command aggregated community bank data and highlights some commercial loan insights that can improve bank performance. percentage points bringing forward looking LGD to 44% of the average community bank loan amount.

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Abrigo

DECEMBER 22, 2023

download NOW Takeaway 1 The most popular blog posts on the Abrigo site reflect many of the priorities community banks and credit unions had in 2023. Takeaway 3 Articles specific to small community banks were among the most-read blogs, with best practices for construction lending at the top of the list.

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Lending Risk Management Community Management 221

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). The second article compared and contrasted community banks’ pay-for-risk and relationship business models.

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South State Correspondent

APRIL 10, 2023

While the market focuses on deposits and liquidity, media pundits and analysts are waiting for credit problems to appear. This article explores the risk and what to do about it. The risk here is that community banks continue to take on an above-average amount of CRE credit exposure. touched off a wave of bankruptcies.

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Abrigo

JANUARY 19, 2015

The Recession and its subsequent rate of bank failures underscore the need for banks of all sizes to invest in developing a capital plan. The Recession taught many institutions that whatever processes had been in place for managing capital were not sufficient. The result was insufficient capital. Forward-looking review 4.

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South State Correspondent

APRIL 30, 2022

Based on the futures market, the Federal Reserve is expected to raise the Fed Funds rate to 3.00% at its December 2022 meeting. 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. Future Short-term Rates.

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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. COI marketing for banks should always be a top priority.

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South State Correspondent

MARCH 19, 2023

In this article, we’ll consider the risk-return tradeoff for bank credit risk, and in a future article, we will compare different community bank business models. Each loan would earn the bank the market clearing ROA. The markets (i.e., The reality of risk-return for private credit (loans) is quite different.

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South State Correspondent

MARCH 30, 2023

While desiring to bank everyone in your community is noble, it can be a poor use of resources. Not to say you want to ignore parts of your community, but why not focus more of your resources on those industries that will make your bank more profitable?

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South State Correspondent

APRIL 19, 2023

In this article, we will look at deposit performance data related to high balances and show how banks can dramatically increase value by restructuring relationship-based products and better-allocating marketing/sales dollars more efficiently. This is over three times the life of a money market account that is over $1mm in balances.

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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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South State Correspondent

MAY 9, 2022

In our previous article ( HERE ), we reviewed the banking industry’s cost of funding earning assets (COF), and we compared how community banks’ COF behaves relative to national banks in a rising interest rate cycle. Your bank’s deposit beta is going to rapidly change. Influences on Deposit Beta.

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South State Correspondent

AUGUST 15, 2023

Since our last update on 2Q credit HERE , 3Q commercial loan pricing trends start with a better economic picture as higher than-planned growth and softer inflationary data have changed part of the market’s outlook. Total industry loans grew 5.1% for the year compared to last year.

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Trends Community Bank Community 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. In this article, we will quantify the value of a prepayment provision and compare the value of a step-down to a symmetrical break-even provision.

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South State Correspondent

JULY 6, 2022

In an earlier article, we discussed how we use “cost per impression” as a metric for planning, budgeting, and executing bank events that are specific for customer retention and branding. For the enterprising community bank, they will essentially find themselves being one of the few banks there.

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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

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. While community banks may want the ability to offer longer-term fixed-rate loans, the interest rate risk is too significant for most banks’ balance sheets. Current Risk in Term Lending. Why ARC Makes Sense.

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Lending Community Bank Community Meeting 195

Abrigo

NOVEMBER 15, 2014

The site analyzed the social media community built by the top banks and credit unions alongside the institution’s asset size. When comparing social impact of banks versus credit unions, the results showed that CUs tend to have an easier time building a community. million in assets for every one follower on Twitter.

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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

JANUARY 20, 2023

2022 will go down as one of the worst years for community bank loan mispricing when viewed on a spread basis. Even though many loans were booked at below-par value (more information HERE), increasing margins helped drive significant revenue resulting in one of the best years for an initial risk-adjusted return on capital.

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Lending Community Bank Community Data 195

Abrigo

SEPTEMBER 1, 2021

Drug Trafficking Organizations (DTOs) are a key concern From drug cartels to street gangs, the illegal drug market has been a constant money-maker for DTOs. . Would you like others articles like this in your inbox? Start with Part 1: Implications for Community Financial Institutions. What can community financial institutions do?

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South State Correspondent

JULY 5, 2022

In this article, we analyze why 75% LTV may not protect banks from credit risk on commercial loans and why there is only one source of loan repayment. . Loans below 1.50X starting DSCR cannot withstand the current market expected rise in interest rates if cash flow decreases by just 10%. Background.

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South State Correspondent

MARCH 13, 2023

While we will cover the general lessons HERE , in this article, we wanted to focus on the root cause – how and why interest rate risk caused the second-largest bank failure in US history (Washington Mutual was the largest in 2008). Notably, most community banks’ duration risk is in the loan portfolio.

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South State Correspondent

JANUARY 30, 2024

Marketing and technology (IT) are two budgets that have taken the most significant hit. In this article, we partner with Gartner to look at 2024 key IT metrics and provide strategic insight into how much your bank should be spending on IT. As such, bank budgets have come under scrutiny.

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Capital Operations Customer Experience Comparison 195

South State Correspondent

OCTOBER 4, 2022

The Federal Reserve Open Market Committee (FOMC) has raised short-term interest rates by 3.00% in the six months between March and September. The market is now forecasting an additional 1.25% in hikes by year’s end, with the next move coming on November 3rd. Bankers As Trusted Professionals.

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