Correspondent Blog

PPP forgiveness is fraught with peril for bankers. Done the wrong way, and it will suck countless resources. Aside from having a good process and/or technology platform, having a marketing plan will be the difference between success and failure. If done correctly, an application can take 20 minutes to review and approve. If done incorrectly,…

Loan growth is slowing for community banks, and credit spreads are widening. As is typical in economic cycles, recessions present an opportunity for healthy banks to thrive and for weaker banks to be whittled.  Despite the flat and low yield curve, the current banking environment is a perfect recipe for healthy banks to win new,…

It is around this time that many banks are trying to determine the amount of staff and effort that will be required to process all their PPP Forgiveness Applications that are now ready to be filed. Late last Friday, the SBA issued new Final Rules that further outlines what is expected from borrowers and banks…

The future path of the economy is currently unpredictable. Still, the majority of banks have now eliminated two possible scenarios: 1) Best case scenario – that nothing will change from February 2020; and 2) Worst case scenario – that the pandemic will not end in the foreseeable future and banks should avoid loans and invest…

During the last ten years of economic expansion, prudent bankers were planning for the next downturn. Everyone knew that the economic expansion would end, but no one could be sure when or how. Smart bankers managed their business by accepting that all expansions do eventually reverse. None of us can predict the future, but enterprising…

While it is too soon to get the data on bank commercial real estate (CRE) portfolio delinquencies and forbearances, we take our benchmarks from the commercial mortgage-backed securities market as of May 14th. As any commercial banker can tell you, hospitality and retail remain under the most pressure, jumping up more than 5x and 3x,…

Last Friday night, the SBA released the long-awaited Paycheck Protection Program (PPP) application, and while it clarified some aspects of the program, its complexity also surprised many bankers. In the SBA’s defense, it is hard to strike the right balance of speed to market, simplicity, and breadth of idea inclusion, so overall, we must give…

In past articles, we discussed a proposed Coronavirus stress test under CCAR and provided our COVID-19 probabilities of default and loss given defaults for a model bank portfolio. In this article, we update our CRE modeling and take a deeper dive into loan-level analysis in order to help banks triage and manage both individual credits…

We have blogged about checklists for returning to work and the models available to bankers to decide when to call employees to the workplace. In this article, we describe specific protocols for returning employees to a bank office, which will have no customer interaction – a much easier protocol than a bank branch reopening to…

As you wind down and clean up Round 2 of the Paycheck Protection Program (PPP) and before you produce your 1502 report to the SBA, it now merits thinking about how to best set up for the wave of forgiveness work that starts immediately after funding. Obtaining forgiveness is critical to both the bank and…

In these challenging times, both bankers and bank customers are stressed and exhausted. Typical schedules are disrupted, work environments are upended, and business models are challenged.  Because this pandemic shock has brought us into new territory, there has never been a better time in modern banking history than now to enhance your value as a…

While we discussed our framework for deciding WHEN to call bank employees back to the branch lobbies and workplace, in this article, we cover HOW. The two decisions are interrelated since the sooner you look to reopen, the more risk you take, and the more resources you have to invest in a reopening plan. Since…