Correspondent Blog

A common strategy for community banks, when faced with a borrower that wants a 10-year fixed rate loan, is to offer a five-year fixed rate that adjusts in five years. Historically, this has worked for some customers and banks because, over the last 40 years, five-year rates have generally fallen.  As interest rates fall, a…

Banks are full of documents. Each document contains an extensive array of data. Just keeping track of non-disclosure agreement terms is a huge task. Then there are vendor contracts, employment agreements, statements of work, loan documents, financial statements, tax returns, deposit account documents, policies, and an array of similar applications. The challenge is that most…

Over the last 15 years, an ever greater percentage of community banks have embraced some form of interest rate hedging.  Approximately 1,000 banks in the country use some form of hedging products to manage risk, generate fee income, or provide product offerings demanded by their customers.  Most of the top 100 banks (by asset size)…

In 1983, Commodore International, with its Commodore 64 commuter, was the largest personal computer manufacturer in the market controlling over 50% of sales. By 1992, the Company was an afterthought, and by 1995 it was liquidated. Commodore’s demise is a case study of how NOT to care about your customers and why business intelligence through…

Last week we wrote about loan-level vs. balance sheet hedging for community banks and provided our loan proposal generator (HERE). We compared and contrasted the two strategies and sized the market for community banks. We also shared a table that summarized the two strategies. In this article, we will discuss what community banks should look…

The reality is that banks don’t think from the customer’s perspective enough. The customer experience is horrible for many bank processes. Bankers often think from the bank’s perspective or from the regulator’s perspective. Not understanding your customer can lead to a brand and products misaligned with the customer’s needs resulting in an erosion of a…

Competition is intense, and every bank is looking for a competitive advantage. Better products, faster service, or insightful advice can translate into additional loans, better credit spreads, or extra fee income. Sometimes just a graphics tool can help a banker win more loan business. At SouthState, our commercial lending teams use an online proposal generator,…

With 100+ public banks reporting, we have more than a representative sample to see 2Q 2022 bank earnings trends and derive some operational insights on bank performance. We touched on the 33 Items That Stakeholders Want to Know, which highlights some of the industry’s concerns and serves as a good checklist of items to touch…

A yield curve is a relationship between yield and different maturity dates. The yield curve’s slope can provide insight into future interest rate changes and economic activity. There is much discussion in the market about the current inverted yield curve between the two and ten-year Treasury yields. However, for bankers, the critical dates on the…

In wrestling, there are hundreds of thousands of moves to learn. You will fail if you try to learn them all early in your wrestling career. Moves come with experience. Concepts come first. To start, what is essential is conditioning and learning about angles. Defending your angles and using angles to attack. When it comes…

Last week the Federal Reserve raised the Fed Funds rate by another 75 basis points – that was no surprise to the market.  However, in Powell’s unscripted remarks at the press conference, he stated that interest rates have reached a “neutral level.”  The market reacted to those words with equities and bonds both rallying.  We…

Over the past several years, bank investors have been hungry to hear about growth and expansion. Revenue and growth have fueled bank multiples. Now, the tone is markedly different. We have poured through the recent 2Q earnings releases, spoken with a rash of institutional bank investors, traded thoughts with analysts, and compiled the following list…