Correspondent Blog

As banks contemplate their strategic options for stablecoin, it is worth understanding the business model that drives the profitability of the product to make the best decision possible against a sea of unknown factors. In this article, we explore the potential profitability of a bank-issued stablecoin and the analytic model that will drive profit. The…

The Fed Funds futures market is currently pricing in a high probability of a September interest rate cut – although that is not a certainty.  Many clients with financing needs are looking to their commercial relationship managers for advice on how to structure and price their credit facilities.  We recently worked with a lender who…

In contrast to 2Q where the market overreacted (in retrospect) to tariffs, government cuts, and immigration reform, 3Q is built around a return to normal theme. Banks increased lending supply and credit performance remained stable. In this article, we will break down detailed commercial loan pricing data and highlight both trends and insights into 4Q….

For any business to succeed, managers need to understand their competitive landscape. What the competition is offering, delivery channels, pricing methods, and service levels helps community banks differentiate their offering and enhance their competitive advantage. Unfortunately, the competitive analysis for the broadly defined banking industry is challenging to understand because of the rapid innovation in…

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…