Correspondent Blog

Bank credit has been an interesting road over the past year, and it is about to get more interesting. Despite higher inflation, a tariff shock, immigration policies and general volatility, probabilities of defaults, and loss given defaults have improved.  Yet, despite that, bank credit has deteriorated slightly. How is this possible? We explore the data…

A forward rate lock is one of the few products a community bank can offer that protects the borrower, strengthens the credit, and adds fee income at the same time.  A year ago, we made that case in a flat-curve market.  Today the case is stronger, because the risk a lock removes has stopped being…

The FOMC chose not to move rates this week. Consumer and producer prices rose substantially above the Fed’s target in September 2026; both headline and core inflation climbed above expectation.  The futures market reacted immediately, but what should be the takeaway for community banks?  Not much.  Bankers should avoid the temptation to treat each data…

Money20/20 USA wrapped up in Las Vegas on October 21, and if there was a single theme, it was the fact that financial services industry is being rebuilt around artificial intelligence, digital money, and new business models. In this article, we explore these trends and explain how it might impact banking soon. The technology part…

Given the popularity of Muse, Instinct, Dots, ChatGPT, and other third-party agents, these tools have the capacity to alter deposit performance. These AI agents can continuously compare rates, fees, deposit insurance, bank safety and make strong recommendations including preparing account opening applications. Eventually, these agents will help a customer act. In this article, we examine…

In January 2022, we published an article called “Loan Hedging May Save Your Bank” (you may search for it here). At the time, Fed Funds rate was near zero and much of the industry still believed inflation was transitory. We argued otherwise and stated that inflation would erode the real value of fixed-rate loan margins,…

At our recent Deposit Conference, Nomis Solutions taught us a handy trick leveraging their CD performance data from their machine-learned model. In this article, we are going to take a look at a case study that compares two methodologies for CD renewals and see which one outperforms. The one that outperforms comes with two tactics…

Ask a community banker how the bank will beat margin compression, aggressive pricing from larger competitors and a shortage of stable deposits, and the most common answer is the same: “We’re going to compete on service.” The trouble is that the bank down the street says it too, and so does the regional bank, and…

The Bank Balance Sheet Monitor gives bank executives a weekly and year-to-date view of how the industry is changing across loans, investments, liquidity, deposits, and other funding sources. Rather than looking at a bank’s own results in isolation, management can compare the entire industry, the 25 largest banks, and community banks to help banks understand…

Most community bankers manage their lenders by loan volume, loan count and credit quality.  Few community banks look at the client level contribution to overhead or the risk-adjusted return on capital (RAROC) for each lender’s portfolio profitability .  We analyzed one lender’s portfolio of 146 relationships, and a very uneven picture emerged.  This picture is…

For years, bank marketing conferences were largely about advertising channels, branding campaigns, social media, and creative tactics. This year, the 2026 ABA Bank Marketing Conferece was different. This year, the major themes centered on hyperscaling bank marketing by leveraging generative and agentic AI to fuel growth. Whether the topic was deposits, branding, social media, analytics,…

We work with many banks across the country, and we get to see hundreds of different client scenarios weekly.  We recently worked with a bank that held a loan with a client who was using a 1031 exchange, but instead of paying off the loan with that bank, the customer retained the economics of the…