Correspondent Blog

As fans of the hit Apple TV psychological thriller Severance know, one of the jobs of severed Lumon employees is to find the numbers that elicit negative emotions and make them disappear. Similarly, bankers must do the same thing when dealing with asset-liability management (ALM). This article examines how running multiple bank simulations can help…

A credit tenant loan (CTL) is typically structured as a loan secured by the real estate pledged as collateral, with or without personal borrower guarantees, and, most importantly, the obligation of a credit-rated tenant of that real estate to pay rent.  These loans have both bond and loan qualities.  They are like a bond in…

To ring in and celebrate the New Year, check up on your bank’s future financial health. Based on the 2007 to 2010 bank failure experience, we modeled the financial health of every bank using the last 16 quarters of historical performance.  We have also created projections for the next 18 months. Each bank has an…

For a Boxing Day promotion, we are giving away 60 days of free usage for up to five bankers at each community bank for our Loan Command application. The objective is to allow you to see the latest profitability of your loans and deposits, on a forward looking basis. In addition, you can check out…

Last week, we covered the first two steps in using AI-driven marketing data to uncover the customer’s intent. (HERE). This week, we discuss the last two steps and show how generative AI is the new major change in bank marketing when it comes to becoming much more effective at leveraging customer intent. Interpreting topic models…

Community banks (under $10B in assets) serve a key role for borrowers, local communities, and the broader US economy. Community banks are better positioned than many other creditors to follow and adapt to local economies, industries and trends, thereby, being better stewards of capital.  Community banks may also serve as buffers for the extreme swings…

If you are conducting bank strategy or marketing around demographic information, at best you are being lazy and ineffective. At worst, you are being sexist, ageist and a bunch of other names that can hurt your culture and reputation while wasting your marketing budget. In this age of data, getting to the Holy Grail of…

Should borrowers pay commercial loan points to lower future interest payments? Loan or mortgage points are upfront fees paid by the borrower to the lender to reduce the interest rate on a loan or mortgage.  For example, assume that a borrower is considering a loan, structured as a 25-year amortization, due in ten years, at…

As we near the final stages of strategic planning and budgeting, several bank technology trends are emerging that will play out over the next several years. This list isn’t necessarily for bank technologists but for business line executives who make decisions on products and services. In this article, we highlight these investments, put them in…

The Federal Reserve Bank of New York published three articles on why banks fail (the first one here).  While the aim of the research was to identify the cause of approximately 5,000 US bank failures over the course of 160 years, the research also infers what factors bank executes can influence to not only avoid…

Bankers love easy. Who doesn’t want an easy way to have a more profitable bank? We also love to keep things simple. It is a common refrain. Compounding the problem is that in banking, we often think that “simple” and “easy” as synonymous. In this article, we will touch on innovation, technology and banking strategy…

In our previous article (here), we made the argument that the next administration’s agenda is highly inflationary, will likely lead to higher interest rates and more volatility.  We estimate a high probability that after this current interest rate cutting cycle, which may end sometime in 2025, that higher inflation will result in the Federal Reserve…