Correspondent Blog

Based on the futures market, the Federal Reserve is expected to raise the Fed Funds rate to 3.00% at its December 2022 meeting. The Fed will also aggressively shrink its balance sheet to tame unwanted inflation. These two Fed moves, along with the economic environment and customer behavior will impact your forecasting of your cost…

Banks that focus on the customer experience have come to learn that it is not the forward-facing customer experience that matters, but the “total experience” that now counts. Total experience is the business strategy for creating superior customer AND employee experience. In this article, we walk through why banks should focus on total experience (TX)…

Banks have ceased using LIBOR to price assets and liabilities after 2021. However, some community banks are still deciding on the correct term lending index to adopt. Many banks are uncertain that they have chosen the best term index for their products and markets. We believe that having more options for community banks is beneficial….

It was 102 years ago, almost to the day, that Babe Ruth hit his first home run as a Yankee against his previous team, the Boston Red Sox. That hit launched a juggernaut that not only changed baseball but changed the view of both team building and risk mitigation. In this article, we highlight the…

Historically, community banks have relied on net interest margin (NIM) instead of fee income to drive return on equity (ROE). In contrast, larger banks have emphasized non-interest income rather than NIM to boost ROE and revenue. For example, 40% of JP Morgan’s commercial banking revenue is derived from fee income, and JP Morgan’s commercial banking…

This week is the start of bank earnings week, and the best bankers on earth will be presenting their results. It doesn’t matter if you are in front of your shareholders, equity analysts, or boss. Sooner or later, you will need to present data to showcase your results. When making a data presentation, there is…

While we look at many annual reports, the two CEO missives that we never miss are Berkshire Hathaway’s and JP Morgan Chase’s (JPM) shareholder letter.  We feel that as community bankers, we can learn much from Jamie Dimon (Chairman and CEO of JPM) and from Warren Buffet. Recently, JP Morgan Chase released its 64-page 2021…

Our recent sampling of 73 banks indicates that most banks have not adjusted loan or relationship pricing assumptions over the last two years. That could be a mistake as the environment has been radically different since 2020, and many banks are mispricing their commercial loans and relationships. In this article, we provide banks with four…

For any bank using Salesforce and/or nCino as their CRM and loan origination platform, respectively, or if you are considering those platforms, we would love to exchange best practice ideas with you. We will be holding an in-person roundtable session at the upcoming S&P Global Community Bank Conference 2022 at the Four Seasons Resort and…

A yield curve shows interest rates associated with different contract lengths for a particular interest rate instrument.  With recent interest rate volatility, the yield curve is changing shape daily, and there is much discussion about how the shape of the yield curve predicts the future strength of the economy.  While economists may use the shape…

Community banks pride themselves on superior customer service. Approximately 90% of all community banks believe that they provide an above-average level of customer service (of course, the math cannot work that way, as half of all banks should be providing a below-average level of customer service). Research by various consultants shows that 80% of companies…

In the future, banks will make money on payment products by DELAYING settlements. That vision is ironic considering financial institutions are spending billions of dollars moving payments from one to three-day settlement to real-time. However, in the next three years, many banks will have the bulk of their payments settling in real-time, and delaying payments…