Correspondent Blog

In the trenches of the battle for deposits, banks have ratcheted up their tactics. While some banks pay customers a 4.25% interest rate for funds in a money market, other banks, such as Chase, Citi, Capital One, PNC, and others, pursue a tactic of offering a near-up-front cash bonus to open the account. In this…

When banks price loans, they stress the borrower’s ability to repay the loan under adverse credit conditions. For example, credit officers will underwrite to various interest rates, vacancy rates, revenue projections, EBITDA or NOI assumptions. However, most banks will not subject that same credit stress analysis to calculate that loan’s ROE. This is unfortunate because…

As we peer into 2026, the year will likely be recognized as the year that banks not only start to deploy agentic AI at scale but interact with the agents of our customers. In fact, many of these agents will become our customers. In banking however, trust is currency. Every interaction, whether it’s a teller…

Over a thousand community banks work with us in various capacities across the country.  We observe and measure commercial loan pricing (on average we see over a hundred commercial loans per week). Our bank customers range in size from under $100mm to over $10B in assets.  We see pricing on commercial loans as small as…

The recent popularity of stablecoin and tokenized deposits have forced banks to take another look at a wallet strategy. Even if you are not planning to issue a stablecoin or tokenized deposits, the fact that these instruments are separate from a bank’s core means any other bank can capture these products into a digital wallet….

We estimate that roughly 10% to 15% of community banks use a loan pricing model and fewer use a risk-adjusted return-on-capital (RAROC) loan pricing version. Most bankers are aware of loan pricing models but choose not to use them for the following reasons: 1) The cost of acquisition and implementation, 2) A lack of time…

In F1: The Movie, Brad Pitt’s character tries to tell his experienced team that “The corners are for combat,” which is a little like telling a banker that customer service is essential. Regardless of the obviousness, the point stands that in F1 racing, cornering takes precision, confidence, and nerves of steel. A F1 driver must…

In today’s competitive commercial lending environment, banks must continually balance the risks and rewards of different loan structures. Nowhere is this tension more visible than in the decision to offer a standalone construction loan versus a construction-through-permanent (construction-to-perm or “single close”) loan. Though construction lending inherently involves elevated risk and complexity, banks that opt for…

The Fed just finished their July meeting and there are many banker that will be further waiting for rates to drop. By the same token, many borrowers are grappling with the decision of when to lock their permanent financing. Some borrowers are choosing short-term financing in anticipation of the Federal Reserve embarking on an interest…

For years, cross-border payments have been slow, expensive, and opaque. On top of that, currencies and currency transactions have often lacked trust. A stablecoin promise a faster, more transparent and trustworthy solution. With the signing of the Genius Act into law, banks have the rare chance to rethink how they move money, store value and…

Bank deposits are evaluated by the investment market and industry analysts on how non-correlated they are to interest rates. We are concerned with growing beta as it is an indication of poor deposit management and/or a challenging interest rate environment. In this article, we evaluate and test four deposit strategies to see which performs the…

We recently published an article (here) that demonstrated how return on equity (ROE) (and return on assets (ROA))  were the main predictors of community banks’ survivability.  Conversely, community banks’ NIM and credit quality were not, in themselves over the last four years, predictors of which community banks survive or become acquisition targets.  Community banks’ average…