Correspondent Blog

Every community bank has a set of financial statement reports and ratio analyses to assess underwriting and credit risk.  The advent of credit spreading software such as CreditQuest has made this job very easy.   However, few banks take the extra step of modifying their reports and analysis based on the current economic cycle and market…

Show a potential banking customer information, and their brain will quickly try to organize and synthesize the information. The easier the information is to organize, it turns out the more the viewer will like your ad. Our own Dr. Chris Janiszewski from the University of Florida and Dr. Dan King of the University of Singapore…

When it comes to setting risk for bank strategic planning, contrary to popular belief, risk isn’t something to avoid. Risk is not even an element to minimize. This is counterintuitive as most bankers are taught to avoid and minimize risk. For that matter, most regulators, board members, and investors also reinforce this notion. Take for…

Because competition is intense and every lender is looking for a competitive advantage, at SouthState Bank, we strive to develop lending tools to help our bankers win more loans.  A better product, faster service, or insightful advice can translate into additional loans, better credit spreads, or additional fee income.  In this article, we explore our…

You can slice and dice your credit portfolio all you want, but if you are not paying attention to cross-correlations, your efforts could be sub-optimal. For example, many banks separate their multifamily exposure away from their single-family exposure. In some markets, these two subsectors are almost 80% correlated. A drop in housing prices usually occurs…

The market is now pricing Fed Fund hikes beginning in 2022, and the proposed fiscal stimulus in the form of two separate infrastructure bills totaling $4.5T has created a new sense of optimism for FOMC members. However, the lingering concern that many bankers hold is can the country (US Department of the Treasury) afford to…

These days, if you want to make tough branch decisions, use a good college student instead of an experienced banker. We will come back to the college student but, in this post, we pitted experienced bankers against the latest branch models against the latest machine learning applications to see which method was more accurate at…

When designing products, choosing vendors or trying to solve usage challenges, understanding the importance of alerts and notifications is critical to success. Alerts are important now and will be even more essential for the modern banker to understand in the future as banking morphs into a collection of mobile apps and wearables. While we have…

After months of being in a steady-state, the PPP world caught fire. You have the borrowers from Round 1 (2020 origination) that have not filed for forgiveness yet and are now facing principal and interest payments; you have Round 2 Forgiveness heating up, and then, as of last week, you have the new SBA Direct…

The market is preparing for the end of USD LIBOR as a benchmark index after 2021.  Most national and regional banks have created LIBOR working groups and have formulated a transition plan for LIBOR.  At SouthState Bank, we have been busy over the last year working on our transition from LIBOR to alternative indexes for…

The average bank closes about 35% of their loans on their commercial loan pipeline report. Hearing this number begs the question – is that the optimal level for that metric? Put loans on that have a greater percentage of closing, and you potentially deprived transactions from getting the support they need. Put more loans on,…

Most customers are borrowing neophytes.  We estimate that the majority of community bank borrowers have a rudimentary financial and accounting understanding, and these borrowers may focus solely on the interest rate on a loan when comparing their options.  Even “sophisticated” and seasoned borrowers do not know how to compare their borrowing options to optimize outcomes. …