Correspondent Blog

While AI can help banks, this month it more like AI competition. Earlier this month Anthropic released its “Claude for Small Business” suite of agents and ChatGPT introduced its new personal finance experience which connects users’ financial institutions to allow them AI-generated insights. This infrastructure is quickly changing the financial landscape. In this article, we…

We might have a divided Congress. Pundits, economists, and the market provide economic forecasts such as GDP, interest rates, inflation, consumer and business demand, loan default rates and banks’ cost of funds.  Unfortunately, people overestimate their competence even in areas where they possess experience and knowledge.  Market forecasts represent the sum of all actors expressing…

It is clear that we are not going to get a rate cut for the rest of the year. Unfortunately, most banks have built in two or more rate cuts into their budget. While a rate cut has been statistically off the table since January, many banks still have not adjusted their deposit strategy and…

During the pandemic, some banks extended asset duration as if they were convinced that interest rates would not rise again in the future. At that time, we published multiple articles warning banks to dynamically assess their asset-liability management (ALM) assumptions and consider alternative paths of interest rates; paths that looked normal just before the pandemic….

Now that we have complete call report data, the banking industry unveils some tidbits of knowledge that has an impact on every bank’s positioning and strategy. In this article, we recap the major trends of the quarter and discuss what it means for a data-driven, strategically focused bank management team. The Backdrop for Bank Performance…

In April 2021 we published an article (here) where we argued that the Federal Reserve was overlooking the possibility of serious inflation threats and we questioned the characterization of inflation as transitory.  Shortly after that time we published numerous other articles outlining defensive postures that community banks should take in an increasing inflationary environment, from…

Two weeks ago, Anthropic released its new large language model named “Mythos” in preview form and highlighted the ease at which this new model found IT vulnerabilities at major corporations including US banks. Regulators gathered the major banks and since then its been a hot topic in banking circles. In this article, we explain the…

In our previous article (HERE) we discussed differences between how various banks price commercial loans. We contrasted ideal pricing and real-world pricing strategies employed by banks. We highlighted the objectives of loan pricing and summarized seven tools that community banks can use to price commercial loan relationships. In this article, we would like to further…

Despite higher inflation/energy, greater volatility and lower projected debt service coverage, banks drove loan growth tightening pricing for investor-owned properties but widening pricing for C&I. In this article, we will break down detailed 2026 commercial loan pricing data and highlight both trends and insights into 2Q. As we reported last week in our credit outlook…

We are often asked by lenders about pricing differentials for fixed-rate commercial loans with and without prepayment provisions.  For example, if a bank were to price a loan with a yield maintenance provision the loan would have a much longer expected life, and under most circumstances the bank would not have negative impact if rates…

The first quarter of 2026 has brought tariffs, a war, greater inflation/higher energy prices, AI-driven changes, more volatility and more uncertainty. Unfortunately, almost every aspect of this current environment is inversely correlated to bank performance. The bank credit outlook is highly volatile with a skew to the downside due to higher inflation to include higher…

We are often asked by lenders about pricing differentials for fixed-rate commercial loans with and without prepayment provisions.  For example, if a bank were to price a loan with a yield maintenance provision the loan would have a much longer expected life, and under most circumstances the bank would not have negative impact if rates…