Correspondent Blog

Despite higher inflation/energy, greater volatility and lower projected debt service coverage, banks drove loan growth tightening pricing for investor-owned properties but widening pricing for C&I. In this article, we will break down detailed 2026 commercial loan pricing data and highlight both trends and insights into 2Q. As we reported last week in our credit outlook…

We are often asked by lenders about pricing differentials for fixed-rate commercial loans with and without prepayment provisions.  For example, if a bank were to price a loan with a yield maintenance provision the loan would have a much longer expected life, and under most circumstances the bank would not have negative impact if rates…

The first quarter of 2026 has brought tariffs, a war, greater inflation/higher energy prices, AI-driven changes, more volatility and more uncertainty. Unfortunately, almost every aspect of this current environment is inversely correlated to bank performance. The bank credit outlook is highly volatile with a skew to the downside due to higher inflation to include higher…

We are often asked by lenders about pricing differentials for fixed-rate commercial loans with and without prepayment provisions.  For example, if a bank were to price a loan with a yield maintenance provision the loan would have a much longer expected life, and under most circumstances the bank would not have negative impact if rates…

It is likely that your bank’s project management needs an AI upgrade. To learn how to do this we turned to NASA and studied the recent success of the Artemis II mission. In this article, and the free companion guide, AI-Driven Bank Project Management Lessons From Artemis II, we provide banks with an updated playbook…

Our data and analysis strongly suggest that banks that can measure instrument and relationship level performance for ROA and ROE can improve simply by reallocating capital and resources to more profitable relationships and improve performance by strategic cross-selling. We measured how commercial loan hedging, where interest rate risk is removed, credit margin is properly determined…

Account opening is one of banking’s most important moments: it’s where a new relationship begins, where trust is earned (or lost), and where the bank sets the foundation for profitability and risk management. In this article, we look at how generative AI is being employed within teams of agents that is serving to make the…

Community banks have long debated whether profitability is driven by pricing discipline, balance sheet optimization, or credit selection. While each of these factors matters, analysis of client-level profitability across thousands of commercial relationships tells a more decisive story: bank profitability is not built through isolated transactions; it is built through relationships largely characterized by multiple…

If you are a bank CEO, you already track performance and risk for regulators, the board, and shareholders. There is another audience you cannot ignore: potential acquirers. Banks that get acquired often share common traits. Some of these traits are quantitative and some are qualitative. The good news is that we can help you identify…

In our previous article (HERE) we discussed differences between how various banks price commercial loans.  When it comes to setting commercial loan rates, we contrasted “ideal” and real-world pricing strategies employed by banks. We highlighted the objectives of loan pricing and summarized seven tools that community banks can use to price commercial loan relationships. In…

In 1963, American Express rolled out an initiative of embossing “Member Since xxxx” on its credit cards and marketing material to signify customer loyalty, relationship longevity, and prestige of brand. Several other banks, including Wells Fargo, have followed suit with similar success. A member tenure program signals recognition, belonging, and continuity. In this article, we…

In a perfect world, when it comes to pricing commercial loans, banks would price customer relationships based on risk-adjusted return on capital (RAROC) and incorporate shareholder value-added (SVA). Banks would then measure profitability at the customer, product, branch, region, or manager level so that management may properly allocate resources to drive institutional profitability. Banks would…