Correspondent Blog

Community banks divide into two groups – those that have shifted their digital marketing to encompass the pandemic and those marketing as if it was business as usual. Do you know which type is by far the least common? That’s right, the first. Do you know which type is by far the most successful? Yep…

One of the biggest mistakes that some bankers make is believing that banks are in the business of making loans.  It is true that banks make loans, but originating a loan is unquestionably an unprofitable business.  Banks earn an acceptable return on capital by keeping loans, not by making them.  We recently worked with our lender on a…

Negotiating Stimulus 3.0 & January Jobs Numbers With the Biden Administration settling into its third week on the job, attention will turn to gauging the outlook on their proposed $1.9 trillion Stimulus 3.0 package. The administration is showing increasing signs they don’t want to retreat from the price tag which Republicans, and a couple Democrats,…

As we try to turn attention away from our GameStop positions and focus on the more sedate trading found in fixed income markets, we are met today with personal income and spending numbers for December. While the fourth quarter GDP release from yesterday incorporated the income and spending numbers, the December report gives us a…

It’s FOMC Meeting Day but it probably will come and go without creating too many waves. First, there’s no chance monetary policy will be adjusted, and second, there won’t be any updated rate and economic forecasts. Those will come at the next meeting on March 17. One thing we are likely to get is a…

If you want to get ahead of a trend, consider investing in content for your bank. Content is the new growth accelerator in banking and banks would be wise to start small now, experiment, and learn the ways of the future. Content is the missing piece of growth acceleration and helps not only acquire new…

Research demonstrates that many companies do not sell their products or services evenly throughout the week, month, quarter, or year. Instead, in many industries, revenue and profit margins can fluctuate substantially throughout periods. It pays for community banks to not pay attention to this phenomenon in order to increase margins, but due to the vaccine,…

Negotiations over Stimulus 3.0 Begin With the inauguration behind us and with the Senate already busy confirming the first of President Biden’s Cabinet appointments, we’ll see if the Senate can walk and chew gum at the same time by taking up the $1.9 trillion Stimulus 3.0 package. Republicans are balking at the price tag but…

Equities hit record-highs yesterday on the belief that at least a good chunk of President Biden’s $1.9 trillion stimulus package would become law. Those high water marks didn’t survive the day, however, as investors booked gains and a meandering day was the result, with Treasuries also not finding much traction. As for the stimulus proposal,…

The Horse-trading Over Stimulus 3.0 Begins Now that the Biden Stimulus Proposal is out the market will continue to assess what may get passed and how soon. The $1.9 trillion price tag certainly was higher than most estimates and Treasuries initially rallied on the assumption that the hefty price might find some Democratic senators balking…

President-elect Joe Biden unveiled a stimulus package last night that could exceed $1.9 trillion. The first part of the package is characterized as rescue items intended to provide lifelines for struggling families and help for minority communities. Headlining the package are $1,400 stimulus checks, an expansion of the child tax care credit, extended unemployment benefits,…

Credit is always changing, and CenterState watches a variety of markers such as corporate bond credit spreads, vacancy rates, net effective rents and many others in order to help us understand credit. Three of those important credit metrics are the probability of default (POD) by industry, the rate of change of that POD, and the…