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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Community Bank Community Lending Marketing 195

South State Correspondent

SEPTEMBER 18, 2023

The banking industry’s average efficiency ratio worsened for the first time since 2021. This development is very important to community banks, as their efficiency ratio also increased, but to 61.63%. The national banks have already indicated how they plan to reverse the efficiency ratio increase – through headcount reduction.

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Management How To Community Bank Community 195

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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Lending Marketing Capital Community Bank 195

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.

Community Bank 195

Community Bank Community Management Marketing 195

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?

Community Bank 195

Community Bank Examples Community How To 195

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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Community Bank Community National Regional 195

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.

Lending 195

Lending Community Bank Community Meeting 195

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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Fintech Cards Regional Management 248

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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How To Community Bank Community Management 195

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.

Management 195

Management National Guidelines Capital 195

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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Community Bank Community Marketing Regional 195

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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How To Community Bank Community FDIC 195

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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Community Bank Community Analysis Industry 195

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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Conference Retail Community Bank Technology 195

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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Banking Trends Trends Millennials Oregon 119

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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Lending Survey Community Marketing 181

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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Analysis Guidelines Marketing Community Bank 195

Abrigo

MAY 2, 2024

Introduction Small business lending for banks & credit unions Small businesses play a crucial role in our economy, and one of the key factors in their success is access to funding. In this blog, we will explore best practices and strategies for small business lending.

Lending 195

Lending Strategy Analysis Policies 195

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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Training Lending Risk Management Guidelines 195

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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Community Bank Community Tools Management 195

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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Branding Marketing Company America 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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How To Community Community Bank Examples 195

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.

Strategy 195

Strategy Lending Examples Marketing 195

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?

Management 195

Management Examples Marketing Millennials 195

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.

Marketing 195

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.

Lending 195

Lending Community Bank Community Meeting 195

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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How To Community Community Bank Marketing 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.

Community Bank 195

Community Bank Community Industry Lending 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.

Analysis 195

Analysis Guidelines Marketing Community Bank 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

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.

Innovation 255

Innovation Fintech Payments Mobile 255

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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Software Fraud Leadership System 97

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.

Community Bank 195

Community Bank Community Industry Strategy 195

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.

Community Bank 195

Community Bank Community Industry Online 195

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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Lending Community St. Louis Community Bank 158

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.

Lending 195

Lending Marketing Analysis Data 195

South State Correspondent

OCTOBER 26, 2023

In this article, we detail our thoughts and the trends we saw last week in Las Vegas from a banking perspective in hopes of giving you the flavor and insight from the conference without you having to walk 10 miles per day and listen to endless vendor pitches. It’s a whirlwind of education, deal-making, eating, and hugging.

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Conference Las Vegas Fraud Case Study 221