Our ARC Lending Tactic For Quality Loan Growth

In our article last week (HERE), we discussed how the yield curve is currently flat between the three and 20-year points.  This makes term loan pricing between three years and 20 years virtually identical.  Banks that cannot offer competitively priced term loans out to 20 years may be at a significant disadvantage when competing or…

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Bank Product Design – The #1 Reason Why Your Bank Isn’t Growing Faster

The reality is that most banks only design less than half a product. Sure, bankers are great at getting the basics right, but there is rarely much thought around 66% of the product’s design after that. In this article, we look at the elements of excellent bank product design and provide some hacks on how…

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Setting Loan Maturity – Use This Trick To Better Compete

Community banks refine their products and services to compete for better borrowing relationships – the better borrowing relationships are associated with better credit quality, meaningful cross-sell opportunities, acceptable margins and fee income, and higher return on equity (ROE).  Unfortunately, current market dynamics are making it hard for community banks to outcompete for these better borrowing…

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Why Digital Assets Are Your Bank’s Future

Scoff at the NFT’s all you want, but they are your bank’s future. Not every bank, just those that will survive. All the crypto ads during the Super Bowl are another sign of this. Sure, in part, it’s a hype-driven Pets.com moment. However, like the changes that took place around Web 1.0, Web 3.0 is…

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Rate Locks – When and How To Lock a Borrower’s Loan Rate

In a recent blog [Here], we argued that banks are almost always in an inferior position by not re-quoting the loan rate with market movement until the loan closes. We think that when banks book a fixed-rate loan, the fixed-rate must be finalized at the closing table; otherwise, banks give borrowers a free option that…

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Stop Talking About Demographics In Banking

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…

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This Bank Business Model Is About To Be A Problem

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…

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The Data on Better Credit Diversification

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?…

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Rethinking The Adjustable Rate Loan Structure

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…

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Use This Guaranteed 5-Step Process for Faster Bank Product Growth

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…

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Bank’s Post-Pandemic Balance Sheet Playbook

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. …

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Better Loan Pricing – Correcting 5 Big Mistakes

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…

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