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Risk of Derivatives – The Fall of an Index

South State Correspondent

Unfortunately, some banks adopted BSBY as one of their preferred indexes and in doing so created risk in derivatives and operations. We published various articles comparing community bank alternatives to LIBOR (such as SOFR, Ameribor, Fed Funds, and Prime). Comerica Bank announced a $91mm charge, and Bank of America announced a $1.6B

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How a Loan Hedge Leverages The Yield Curve – Part II

South State Correspondent

The average community bank’s cost of funding is highly correlated to Fed Funds and SOFR (for the industry, the correlation has been 94% with a six-month lag over the last 20 years). We want to highlight this option with a case study. Our bank showed the borrower a term sheet that had the options below.

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The Top 20 Deposit-Rich Industries for 2023

South State Correspondent

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? That figure is approximately the same cost as targeting a trade organization.

Industry 195
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The Problem with Floating and Adjustable Rate Loans

South State Correspondent

A typical current strategy for community banks when originating commercial real estate loans is to offer floating-rate loans or shorter-term adjustable structures. Unfortunately, this strategy has all the underpinnings of a credit problem case study, and we do not have to search for a hypothetical example.

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Customer Support at Abrigo Provides Peace of Mind

Abrigo

Learn from your peers and hear what problems they are dealing with in our Abrigo Community, exclusive to our customers. Community financial institutions are often tasked with doing more with less. The ADC is a highly resilient environment with risk monitoring levels not currently sustainable by typical community financial institutions.

Software 195
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Recap of Money 20/20 USA 2023 and 10 Banking Thoughts

South State Correspondent

Our Top 10 Insights From Money 20/20 From these sessions and announcements, we pulled out ten of our most important takeaways, each having an impact on bank operations in the coming year. The topics were perfect, and there were some great case studies, but the substance was standard, bordering on underwhelming.

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CoPilot for Banks – 7 Steps Before Integrating Generative AI

South State Correspondent

A CoE community should allow for employees to share usage tips, experiences, concerns, case studies and techniques. An IT-only team may become overwhelmed communicating all the new uses and risk for the technology, hampering innovation and the safe usage of Copilot. AI handled 2.3

Training 195