Correspondent Blog

Bankers agree that reward (revenue) is a prerequisite for accepting risk. It would make no sense to risk the bank’s capital without adequate compensation. However, to avoid commercial fixed rate loan risk, the first crucial step is to measure that risk. We will show how banks that start to accurately measure interest rate risk embedded…

For decades community banks have taken on fixed rate loan risk mostly through the offering of five-year, fixed-rate, commercial term loans. This is probably the most popular structure for real estate-secured term credit at community banks. Now may be the right time for community banks to abandon this strategy – both for the borrowers who…