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This week we sit down with Lindsay Green from ExtraCo Consulting to discuss the latest trends in community banking.  We talk about video banking, the universal banker position, and how Lindsay is helping community banks grow and adapt. The views, information, or opinions expressed during this show are solely those of the participants involved and…

Since our last update on 2Q credit HERE, 3Q commercial loan pricing trends start with a better economic picture as higher than-planned growth and softer inflationary data have changed part of the market’s outlook. The fear of recession has decreased in 3Q, and the new primary concern shifts back to interest rate risk and deposit…

Today we speak with Mark Kanaly, Partner and Chair of the Financial Services and Products Group at Alston & Bird. We discuss the key trends defining the 2023 community banking landscape. Mark focuses on the representation of banks and other financial institutions. He assists these companies with private and public securities offerings, mergers and acquisitions,…

This week we sit back down with another repeat guest, Karl Nelson from KPN Consulting. Karl hosts community bank roundtables across the country, and discusses the challenges and opportunities facing community banks today and in the future. VIEW AGENDA AND REGISTER FOR BMC 2023 The views, information, or opinions expressed during this show are solely…

This week we’re sitting down with Nathan Stovall, Director of Financial Institutions Research at S&P Global. Nathan talks about the outlook for M&A, new de novo activity, and keys to remaining an independent community bank in today’s environment. REGISTER AND VIEW AGENDA FOR BMC 2023 CLICK HERE TO GET YOUR FREE COST OF FUNDING ANALYSIS…

In this episode, we discuss Chris Nichols’ most recent blog posts covering the recent bank failures and takeaway lessons for community banks. Subscribe to the Banker to Banker Blog The views, information, or opinions expressed during this show are solely those of the participants involved and do not necessarily represent those of SouthState Bank and…

Most bankers are familiar with the concept of risk-return tradeoff, which states that potential return rises with an increase in risk.  Low-risk assets pay lower potential returns, whereas high-risk assets pay higher potential returns.  Further, some bankers are taught early in their careers that they are in the business of taking risks, and banks would…

In an article last week (HERE), we discussed why real estate loans underwritten at common debt service coverage ratio (DSCR) and loan-to-value (LTV) levels may quickly become substandard credits if capitalization (cap) rates normalize, as expected because interest rates are rising.  Credits will deteriorate much faster if an economic downturn stresses net operating income (NOI)….

Many community banks today are willing to underwrite real estate secured loans on just two metrics: debt-service-coverage ratio (DSCR) and loan-to-appraised value (LTV). Banks typically approve credits above 1.20x DSCR and below 75% LTV – with many loan-specific factors that may skew these acceptable levels. For competitive reasons, we see banks dipping to 1.10X DSCR,…

This week we sit down with Dr. James Kolari, Professor of Finance at Texas A&M University. We talk about how he is developing the next generation of bankers, the state of communtiy banking, and solutions banks are adopting to become more competitive. The views, information, or opinions expressed during this show are solely those of…

At this point in the business cycle, we believe that community banks should migrate to higher credit quality loans.  However, in response to our last few blogs, some community bankers told us they have few opportunities to originate loans at 1.75X debt service coverage ratio (DSCR) and sub 60% loan-to-value (LTV).   We believe that the…

Community banks have structured fixed-rate loans for many years with an adjustable repricing feature where a loan is fixed for a number of years and then resets based on a stated spread and an index. However, adjustable term loans have several drawbacks for banks, especially in a rising interest rate environment.  One of the most…