Do You Have Too Many or Too Few Loans On Your Pipeline Report?
The average bank closes about 35% of their loans on their commercial loan pipeline report. Hearing this number begs the question – is that the optimal level for that metric? Put loans on that have a greater percentage of closing, and you potentially deprived transactions from getting the support they need. Put more loans on,…
July Jobs Report and Infrastructure Bill Highlight the Week
July Jobs Report and Fate of Infrastructure Bill In addition to the Friday jobs report, the market will be keeping an eye on the infrastructure proposal being debated in the Senate. There is a decent chance something emerges this week and it will then head to the House for review and vote. The House is…
Use Our 10-Layer Pyramid to Educate and Advise Borrowers
Most customers are borrowing neophytes. We estimate that the majority of community bank borrowers have a rudimentary financial and accounting understanding, and these borrowers may focus solely on the interest rate on a loan when comparing their options. Even “sophisticated” and seasoned borrowers do not know how to compare their borrowing options to optimize outcomes. …
Fed Offers a Little for Hawks and Doves Alike
Treasury Market Still Focused on Virus Case Counts The Treasury market is finishing up the week pretty much where it started despite getting a lot of new information from the FOMC meeting, GDP, and today’s June personal income and spending numbers. The income and spending numbers were part of the second quarter GDP release but…
Fed May Soften Tone From June
Increasing Virus Cases May Give Fed Pause The Fed concludes it’s two-day meeting this afternoon and investors will be looking for a couple things. For one, we think the Fed may well strike a different tone given they have been consistent in their messaging that the direction of public health (i.e., virus cases) will be…
What Are You Going To Do With Your Savings Accounts?
More than a year ago, the Federal Reserve changed Regulation D, Section 19 to allow an unlimited amount of withdrawals or transfers from a customer’s savings or money market account. Most banks immediately changed their policies to pass on this freedom to their customers. Some banks proactively left the limit in place or modified the…
FOMC Meeting, GDP, and More Inflation Numbers this Week
FOMC Meeting, GDP, and More Inflation Numbers The FOMC meeting on Wednesday will be viewed more for any change in tone after the recent bout of risk-off activity that sent yields to levels last seen in February as growth prospects were marked down given the increasing delta variant case counts across the globe. While the…
What Floating Rate Loan Index Should Community Banks Adopt?
Recent regulatory messages have reinforced the importance for commercial banks to prepare for the end of LIBOR after 2021. However, banks cannot wait until the end of 2021 to find replacement index(es) because the transition from LIBOR requires changes to systems, vendors, training, and marketing that can take several quarters to finalize and implement. To…
Housing Sales Rebound as Mortgage Rates Fall
The housing market has been one of the few sectors that has shown consistent strength from the very beginnings of the recovery after the induced lockdowns of April and May last year. There was, however, some plateauing in sales activity recently, as existing home sales had four straight months of declining sales on a month-over-month…
Repricing for Lower Growth
The marking down of growth expectations given the increasing virus case counts from the delta variant across the globe has continued to pressure Treasury yields lower. Also contributing to the lower yields was the impression the Fed left on investors minds after its June meeting where they moved forward two rate hikes into 2023. The…
Attention Turns to Biden’s Bills
Attention Turns to Biden’s Bills After focusing on Fed speak last week the market will turn its attention to the fate of the Biden Administration’s budget, tax, and infrastructure proposals. While the infrastructure plan has bipartisan support it’s very narrow and will require all 10 Republicans who signed onto it to vote for the final…
Powell Stays on Message but is the Market Listening?
June retail sales numbers will be released later this morning, and expectations are that sales will rebound after the May pause which came after strong March and April numbers. The report, however, like most of the recent economic releases is likely to be given short attention by the market. They are more focused on Fed…