Correspondent Blog

With almost 30% of banks utilizing some portion of instant payments, the industry is starting to gather more data on how instant payments impact balances, customer acquisition, and account usage. Instant payments have the potential to change the payment landscape for banks. In this article, we look at seven ways instant payments impact deposit performance…

Intelligent agents, or “agentic AI,” are poised to change the face of bank operations. At the same time, banks are striving to figure out how to employ generative AI (gen AI) in their operations; part of the answer lies in the intelligent agent. Like how the Internet and smartphones changed banking, these autonomous reasoning models…

We conducted a loan performance analysis for over 5,000 individual hedged commercial loans originated by almost 400 community and regional banks across the country. We measured prepayment speeds, loan size, loan term, fee income, loan yield, credit performance, and return on equity (ROE) of hedged loans and compared this performance to community bank industry averages….

Bankers have been taught to diversify their loan portfolio to reduce idiosyncratic (individual borrower) risk and to stabilize earnings. The thinking is that diversification-induced lending leads to banking resiliency. We believe that while lending diversification leads banks to lend more in normal times (especially for banks over $50B in assets) and does benefit the general…

Since our last update on pricing and credit HERE, commercial loan pricing trends for the first quarter of 2024 continue to be driven by the perceived increase in credit risk, tighter credit supply and banks’ need for wider margins. This article provides an update on pricing trends driven by our Loan Command aggregated community bank data and…

We recently reviewed a loan term sheet from a national bank for a $13mm commercial real estate (CRE) loan.  The bank offered a 25-year amortizing loan with a ten-year term and required the borrower to hedge its interest rate risk. The borrower was provided options on the type of hedge and when to execute.  The…

US Dollar Climbs to New Record High   Treasuries are finding a bit of a bid this morning after what has been a rough couple of weeks, but we suspect smooth seas will be brief as the market contends with several forces.   Corporate supply has been heavy following Labor Day and that is not…

A Tumultuous Week Comes to a Close We mentioned on Monday to tighten your seat belt as it could be a wild ride this week and that prediction certainly came true. The peculiar thing, however, is that with all the volatility this week has brought, the 10yr Treasury is practically back where it started the…