Correspondent Blog

There is an explosion of entities waiting to become banks. In the last 60 days for example, no less than six bank applications were filed (including the formidable Revolut Bank). Behind that, there are a rash of new competitors coming to include banks by Affirm, PayPal, World Liberty, Mercury, NuBank and UKG. Most will create…

It is clear that we are not going to get a rate cut for the rest of the year. Unfortunately, most banks have built in two or more rate cuts into their budget. While a rate cut has been statistically off the table since January, many banks still have not adjusted their deposit strategy and…

Like a carpenter with a hammer where everything looks like a nail, to a deposit gather, all too often the world looks like a rate. Commonly lost is a discussion around marketing expense. In this article, we explore a deposit marketing framework that describes how bankers might want to think of the trade off between…

When it comes to deposit gathering, the first quarter of any year is critical. If you need deposits and don’t have an active tax refund deposit effort every year, then you are missing out on one of the most effective deposit gathering tactics in banking. Tax refunds are just starting to hit this week and…

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…

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,…

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…

Last week we concluded the industry’s first and only pure deposit focused conference in Denver in conjunction with S&P Global. Given that deposits are a bank’s most important product, there is plenty of room for most banks to improve deposit performance, and we could potentially coming up to a period of changing rates, we thought…

In the trenches of the battle for deposits, banks have ratcheted up their tactics. While some banks pay customers a 4.25% interest rate for funds in a money market, other banks, such as Chase, Citi, Capital One, PNC, and others, pursue a tactic of offering a near-up-front cash bonus to open the account. In this…

In F1: The Movie, Brad Pitt’s character tries to tell his experienced team that “The corners are for combat,” which is a little like telling a banker that customer service is essential. Regardless of the obviousness, the point stands that in F1 racing, cornering takes precision, confidence, and nerves of steel. A F1 driver must…

Bank deposits are evaluated by the investment market and industry analysts on how non-correlated they are to interest rates. We are concerned with growing beta as it is an indication of poor deposit management and/or a challenging interest rate environment. In this article, we evaluate and test four deposit strategies to see which performs the…

It is not every day that you get to own a portion of a banking vendor without putting capital in upfront. ModernFi, a company that provides reciprocal deposits providing access to insurance through network banks (subject to certain conditions) and competitor to legacy deposit networks, is in the process of building a bank-owned consortium to…