Banking Leadership – How to Be The Banker That Everyone Wants to Work For
With 80+ acquisitions that make up our Bank, we have a strong collection of leaders that we have assimilated. These leaders have risen to the top of their previous organization and proven their value to the market by having a successful sale of their bank thereby quantifying the definitive value creation. They have proven to…
Why Expected Average Loan Life Matters to Value
Expected average loan life measures the amount of time that principal is outstanding on a loan. This average life is driven by many factors, including amortization period, economic circumstances, nature of the loan and the expectations of the borrower, and most importantly, by contractual term and prepayment provisions. The biggest surprise for many lenders is…
Solving Banking Problems with the 5S Methodology – Part 2
The “5S Framework” is a methodology for solving banking problems that banks can apply to determine the best strategic path forward. We outlined the background and the first couple of steps of the framework in Part 1 (Here). In this article, we cover the remaining three “Ss” of “Solve,” “Stress,” and “Sell” while looking at…
Should Your Bank Adopt a Loan Hedging Program?
We are staunch advocates that banks should avoid risks that they do not get compensated for. One such risk that banks take without compensation (or revenue) is on-balance sheet, fixed-rate loans. With the current flat or slightly inverted yield curve, plus the current volatility of the market, borrowers have a pricing advantage to lock in…
Use This 5S Framework for Solving Strategic Challenges in Banking – Part I
Banks face a big set of challenges ahead. To gain a competitive advantage, having an effective and efficient systematic approach that is repeatable and can be part of your bank’s culture would be helpful. In this article, we provide a five-step AI-enabled process that will help your bank with solving strategic challenges. 5S Framework Overview…
You Need to Understand These Reasons for Bank Consolidation
By 1985, the banking industry had radically changed. Consolidation among financial institutions started to occur at a pace never seen before, a pace that continues to this day. Understanding the drivers of banking consolidation is imperative when managing bank performance. In this article, we break down the lessons from this long-term trend. In 1985, there…
Using Forward Rate Locks to Win Customers and Manage Risk
We work with hundreds of community banks across the country that utilize forward rate locks to decrease risk, increase fee income, and stave off competition from national and regional banks. If your bank is not currently offering forward rate locks (in its various forms) to borrowers, you may be interested in how to incorporate such…
How to Price Fixed-Rate Loans Without Prepayment Provisions
In a competitive market for commercial clients, each loan feature can be valuable to a community bank. One such loan feature is a prepayment provision on fixed-rate loans. Some community banks offer fixed-rate loans through a hedging program and utilize a symmetrical prepayment provision, others community banks will market their fixed rate loans based on…
20 of the Best Banking Rules
Bankers love rules and formulas. Here are 20 banking rules that have served us well over the years. Use these and save yourself much time and stress. These “hacks” are a combination of rules and shortcuts that we use daily in our decision-making. We have tried to pick some non-obvious shortcuts that have historically produced…
What We Learned At Our Lenders Lunch
For the last few years, SouthState Bank Correspondent Division has been hosting lender lunches across the country. At these events, we invite local executives and lenders to discuss what drives community bank performance, we highlight challenges and opportunities for community banks, bankers have a chance to network over a short period (and eat lunch), and…
Current Loan Pricing Trends for 1Q 2025
In the 4th quarter of 2024, commercial loan pricing has materially changed. The new administration with its lighter regulatory stance, the potential for tax relief and threat of higher inflationary has generated new optimism for credit, and new risk of higher rates. In this article, we quantify commercial loan pricing trends from our Loan Command…
How to Manage the Cost of Funding Dilemma for 2025
The banking industry’s cost of funding earning assets (COF) is highly correlated to short-term interest rates. The Federal Reserve lowered short-term rates by 100bps in late 2024, with expectations of additional rate cuts in 2025. On average, community banks have not been able to lower their COF, now recognize the reality of a pause by…