Correspondent Blog

How many “How to Market to Millennials” sessions or “How to Attract Gen-Z” have you sat through? Chances are you were wasting your time focusing on demographic segmentation. Every generation is indeed influenced by different environmental forces such as – war, protests, smartphones, social media, or crypto — but there is little evidence that shows…

In the last 30 years, the total number of bank charters has declined by 65% (as shown in the graph below). There are many reasons for this industry consolidation.  We believe that the most significant factor driving consolidation is that banks tend to underperform using a risk-for-pay bank business model, and banks that have properly…

Most banks are concerned with their credit portfolio. As credit risk increases with rising rates, the following question arises – is it better to diversify by geography, property type, or business type? Do you focus your marketing dollars and pricing on particular counties, commuter zones, types of commercial real estate loans, or specific C&I industries?…

Community banks have structured fixed-rate loans for many years with an adjustable repricing feature where a loan is fixed for a number of years and then resets based on a stated spread and an index. However, adjustable term loans have several drawbacks for banks, especially in a rising interest rate environment.  One of the most…

Get your process right, and all else will follow. Most banks do not have an evolved process when it comes to bank product growth through product development, marketing, and sales. Growing a product is a quantitative effort that takes capital, planning, math, and a laser focus. In this article, we provide banks with a proven…

Bankers can be forgiven for not anticipating the start of the pandemic.  However, bankers must now be planning their business to capitalize on the transition from a pandemic to an endemic environment.  There is convincing evidence that the global economy will transition to an endemic phase after the omicron variant subsides – but caveats abound. …

If you want to know how you can improve your bank’s profitability, one place that you can start is better loan pricing. While chances are your bank prices most of its loans correctly, it is the fringe cases that, in aggregate, end up having a large impact on bank profitability. In this article, we look…

We see three expected developments in 2022 that will make a loan hedging program an essential competitive advantage for community banks. Increasing short-term rates, higher expected inflation, and increased need for fee income will significantly benefit those community banks that can offer a seamless and document-friendly loan hedging program.  While we have our ARC Program…

Most banks serve a geographical area defined mainly by a political outline, such as a set of counties. Other banks choose less-defined regions, such as the “Tri-city Area” or “Northern Virginia.” While these defined service areas may be fine for marketing purposes, when it comes to operating efficiency, banks may want to think along other…

The FOMC’s recent hawkish pivot and indications of multiple rate hikes in 2022 have created market volatility and an increase in longer-term interest rates. In a period of rapid change (or high volatility), we see about 50% of banks fall into a common trap of mispricing their commercial credits.  This loan pricing mistake does not…

Banks investing in tech funds were all the rage in 2021, with hundreds of banks getting involved and investing for their first time. The timing was good for almost all these banks as some of these funds produced triple-digit returns. These technology funds are pitched as a great way to earn an above-average return while…

The FOMC lowered the Federal Funds target range to 0.00%-to-0.25% in March of 2020, and it has remained there since.  But now, the market is convinced that the FOMC will raise rates in 2022 through 2024 to better align short-term interest rates with expected market conditions.  This pivot by the FOMC has bankers, and customers,…