Why Diversification Fails at Banks

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…

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1Q 2024 Commercial Relationship Credit and Pricing Trends

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…

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Managing Interest Rate Risk With a Bank Loan Term Sheet

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…

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US Dollar Hits New Record High

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…

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A Tumultuous Week Comes to a Close

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…

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Capital Markets Conversation featuring Joe Collins, Tom Fitzgerald and Caleb Stevens – March 29, 2021

 

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Capital Markets Conversation featuring Todd Davis, Tom Fitzgerald and Caleb Stevens – March 29, 2021

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Capital Markets Conversation featuring Patty Gorman, Tom Fitzgerald and Caleb Stevens – March 29, 2021

 

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