Correspondent Blog

In banking, there are thousands of processes that scream for intelligent automation. Many banks have adopted robotic process automation (RPA) in the last ten years and now banks of all sizes are contemplating operationalizing agentic AI.  Agentic AI platforms in banking represent a transformative shift toward more autonomous systems that can perceive environments, make decisions,…

The crucial factor in delivering value to your shareholders is first delivering value to your customers. Most community banks understand that simply delivering lower price or looser credit standards can deliver value to customers, but over the long-term it dilutes value to shareholders. However, the empirical data shows that the majority of banks fall into…

When it comes to determining the value of a deposit base, there are three major components that drive franchise value: effective cost of funds, interest rate sensitivity (duration and convexity), and volatility. It is a rare bank that can manage all three dimensions of deposit performance and one that stands out is Citibank as they…

We are strong proponents that bankers should be focused on keeping loans instead of making loans. While it is true that banks make loans, originating a loan is an unprofitable business. Banks earn an acceptable return on capital by keeping loans, not by making them. We recently worked with a bank that kept, and increased…

During a regulatory exam, one of the first questions you will be asked these days is your percentage of uninsured deposits to total deposits. The concern is grounded in the SVB/First Republic 2023 liquidity crisis and data that shows higher balance accounts are more interest rate and risk-sensitive than lower balance accounts. In this article,…

We talk to many community bankers who are seeking ways to expand their commercial and industrial (C&I) loan portfolios. Yet, despite the strategic importance of this category, growth has remained elusive. The A and B cross-secured structure (“AB structure”) has recently been utilized by community banks as a practical, risk-managed method for increasing C&I lending…

If not properly structured, fixed-rate commercial loans can become one-way floaters. The term refers to a loan where the bank retains the fixed rate when interest rates rise, but the borrower refinances the loan when interest rates fall resulting in declining yield for the bank. In this article we explain why this reduces profitability for…

Love or hate Salesforce, but the one thing they get right is their vision for the future. They correctly predicted the widespread adoption of the cloud, mobile, API integrations, and enterprise AI. Now, their promoted vision is the “Agentic Enterprise.” No matter if you are a Salesforce bank or not, this article breaks down 10…

I am not sure if the hype around stablecoin is real or not, but my position is that this could be a dramatic shift in banking, and it is worth spending time and effort to see if just 25% of the hype is true. In this article, we provide the algorithm to see if a…

Over the last few months, we have been hosting dozens of banks to lender lunches across the country.  At these lender lunches we discuss credit and pricing trends, deposit gathering strategies, loan pricing and structuring, and fee generation opportunities for community banks.  While we will author a separate article about what we heard from community…

Unfortunately, disruptions from a federal government shutdown are all too familiar to the American population. More unfortunately, this one is different from all that have come before. This shutdown will test both Democrats and Republican’s resolve like never before. As such, this shutdown could go past the 35-day record during the first Trump presidency. Banks…

Many clients are relying on their commercial relationship managers for advice on how to finance their business or real estate assets in the face of Fed rate cuts.  We work with thousands of community bank lenders across the country, and some have been advising their borrowers to finance long-term assets with short-term loans in the…