Correspondent Blog

March PPI Hits All-Time High and Treasuries Rally March PPI came in hotter than expected with new cycle and all-time highs across many of the metrics and Treasuries rallied as a result. Yes, that’s right Treasuries rallied.   While the CPI report from yesterday had a better than expected Core CPI number (thanks to some…

While we look at many annual reports, the two CEO missives that we never miss are Berkshire Hathaway’s and JP Morgan Chase’s (JPM) shareholder letter.  We feel that as community bankers, we can learn much from Jamie Dimon (Chairman and CEO of JPM) and from Warren Buffet. Recently, JP Morgan Chase released its 64-page 2021…

March CPI and More Treasury Supply Likely to Keep Pressure on Yields We open the week with Treasuries continuing to be on the back foot as yields probe ever higher. The 10yr is at 2.75%, the highest level since January 2019.   The upward pressure on yields is likely to remain this week as the…

Our recent sampling of 73 banks indicates that most banks have not adjusted loan or relationship pricing assumptions over the last two years. That could be a mistake as the environment has been radically different since 2020, and many banks are mispricing their commercial loans and relationships. In this article, we provide banks with four…

For any bank using Salesforce and/or nCino as their CRM and loan origination platform, respectively, or if you are considering those platforms, we would love to exchange best practice ideas with you. We will be holding an in-person roundtable session at the upcoming S&P Global Community Bank Conference 2022 at the Four Seasons Resort and…

A yield curve shows interest rates associated with different contract lengths for a particular interest rate instrument.  With recent interest rate volatility, the yield curve is changing shape daily, and there is much discussion about how the shape of the yield curve predicts the future strength of the economy.  While economists may use the shape…

March Jobs Report Solid Enough to Cement a 50bps Rate Hike in May Total nonfarm payrolls rose by 431k vs. 490k expected, but February was revised higher from 678k to 750k with a total of 95k additional jobs added to the prior two months. Job gains were, once again, widespread led by gains in leisure…

Community banks pride themselves on superior customer service. Approximately 90% of all community banks believe that they provide an above-average level of customer service (of course, the math cannot work that way, as half of all banks should be providing a below-average level of customer service). Research by various consultants shows that 80% of companies…

March Jobs Report Not Likely to Move Markets To the surprise of nobody who’s been paying attention, the feel good news around peace talks yesterday has dissipated today as Russian military activity suggests no real pull back, but rather a feint to buy some time. The markets want to believe the good news stories, but…

Will the Consumer Continue to Hold the Line? Tough and effective Ukrainian resistance to the mortal threat of the Russian invasion has surprised the world. In a similar fashion, but certainly less consequential, the US consumer has withstood the impact of the pandemic and higher prices to continue to drive the economy forward. The question…

In the future, banks will make money on payment products by DELAYING settlements. That vision is ironic considering financial institutions are spending billions of dollars moving payments from one to three-day settlement to real-time. However, in the next three years, many banks will have the bulk of their payments settling in real-time, and delaying payments…

Inverted Curves and Recession Signals With the yield curve flat as a pancake across its belly, investors are wondering if the near inversion of the curve spells a coming recession. While the 2yr-10yr Treasury spread is still 21bps away from inverting, the trend is definitely going in that direction. While the 2yr – 10yr Treasury…