Working With Borrowers When Rates Rise

Capital markets move quickly, and last week the 10-year Treasury yield did not just increase, but it increased by almost 20 basis points in one day. Many pundits and economists will be writing about the cause and impact of rising rates. They will note how the market is now pricing interest rate hikes by the…

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5 Mind Blowing Concepts In Culture Banks Can Immediately Use

In the past (HERE), we highlighted how an employee handbook can have a colossal impact on culture that can radically alter your bank’s trajectory. We talked about how culture alone allowed Zingerman’s, a little Michigan deli, to have a worldwide following. We showed employee handbook examples from Netflix, Zappos and Nordstrom to demonstrate how their…

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How This Sample Size Calculator Will Make You a Better Banker [Calculator]

A tool that every banker should have at their disposal is the ability to figure out what a statistically valid sample size is from a given population (calculator at the bottom). A simple everyday example is in the case where examiners are coming in and you want to be sure all your wires are BSA…

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What Your Loan Pipeline Data Is Telling You

If you’re a bank that keeps a loan pipeline report, chances are you have some excellent data that will form the basis of making your bank more efficient. Of the key performance indicators (KPI), tracking length of time to close, approval rates, fall out rates and lost rates are likely on the top of your…

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Why Some Banks Are More Profitable Than Others – The Nonlinear Customer Equation

Why do some banks grind it out and struggle to produce a 9% return on equity (“ROE”), while other banks such as Bank of America and Chase produce 20% plus ROE for the same business segment? One answer is that banks that produce an above-average ROE either have a more profitable customer segment focus, more…

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Overcoming Loan Growth Challenges in 2021

January is typically a slow month for loan production at community banks, and the pandemic-hampered economy made the month even more challenging for many banks. The data from the Federal Reserve’s H.8 report showed that all loans were essentially flat in January for banks. For January, for small domestically chartered commercial banks (defined as not…

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5 Things You Can Learn From 4Q Bank Performance

Our first indication of industry performance for 4Q comes to us in the form of earnings disclosures from the top 24 banks. In this article, we break down five lessons learned from analyzing large bank performance for the fourth quarter (4Q) of 2020 compared to 2019 and see how we can turn this data into…

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How To Raise Margin – A Parable Of Enlightenment

A frustrated bank leader sat alone in her office amidst stacks of analysis showing the slow erosion of the net interest margin – once the bank’s engine of profitability. The leader had watched the margin ebb like the wick of a burning candle, despite the monthly efforts from skilled advisors and analytical staff. New target…

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7 Bank Marketing Tactics Proven to Increase Performance in A Pandemic

Community banks divide into two groups – those that have shifted their digital marketing to encompass the pandemic and those marketing as if it was business as usual. Do you know which type is by far the least common? That’s right, the first. Do you know which type is by far the most successful? Yep…

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The Difference Between Making Versus Keeping Loans

One of the biggest mistakes that some bankers make is believing that banks are in the business of making loans.  It is true that banks make loans, but originating a loan is unquestionably an unprofitable business.  Banks earn an acceptable return on capital by keeping loans, not by making them.  We recently worked with our lender on a…

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The Content Acquisition Strategy

If you want to get ahead of a trend, consider investing in content for your bank. Content is the new growth accelerator in banking and banks would be wise to start small now, experiment, and learn the ways of the future. Content is the missing piece of growth acceleration and helps not only acquire new…

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Is There Seasonality in Loan Credit Spreads?

Research demonstrates that many companies do not sell their products or services evenly throughout the week, month, quarter, or year. Instead, in many industries, revenue and profit margins can fluctuate substantially throughout periods. It pays for community banks to not pay attention to this phenomenon in order to increase margins, but due to the vaccine,…

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