Gonzobanker

DECEMBER 14, 2023

Bank leaders must feel like Rocky Balboa after 15 rounds with Apollo Creed. Just think of what the industry dealt with in the last 12 months: The brunt of the unprecedented scope and pace of Fed rate hikes hit home, and banks have seen an.80 Merger of Equals Deal of the Year (Bank) – Burke & Herbert Financial Services Corp.

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South State Correspondent

AUGUST 15, 2023

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. Non-real estate C&I loans also saw better pricing discipline from banks, with an increase in pricing of 39 bps.

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South State Correspondent

JANUARY 18, 2023

However, in 2023, loan prepayment provisions will be essential tools for commercial banks. Loan prepayment provisions lower prepayment speeds (especially in a stable or declining interest rate environment) and drive higher return on assets (ROA) for banks. Prepayment penalties on loans always drive value.

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South State Correspondent

JANUARY 4, 2023

A potential economic slowdown, slower rate rises, an inverted yield curve, and deposit stress likely make 2023 a trying year compared to 2022. Banks will need to balance these short-term challenges with longer-term strategic goals. Financial pressure will be greater, and bank margins will be higher.

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Independent Banker

AUGUST 31, 2021

A profitability strategy has a lot to factor in given today’s uncertain market. Here’s what community bankers need to know when planning their budgets for the next year. of digital banking customers said they switched to digital banking because of the pandemic. Source: 2021 Provident Bank survey. Quick stat.

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South State Correspondent

MARCH 30, 2023

Almost every trade association needs a checking and savings account, a money market account, debit/credit cards (and processing), remote deposit capture, RTP/ACH/wire services, bill pay, health savings, and 401k services. Banks can start small with one or two niches depending on their state and then grow their focus.

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South State Correspondent

JANUARY 22, 2023

In a previous article ( here ), we discussed why commercial loan prepayment protection would be a critical return on asset (ROA) driver for community banks in 2023. We outlined the four main reasons why prepayment provisions increase profitability for banks. This cost to the bank is shown in the graph below.

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South State Correspondent

JUNE 18, 2024

Deposit costs and liquidity remain a challenge for some community banks as competition for core funding remains intense. The graph below compares the liquidity ratio for community banks (under $10B in assets) and banks over $100B in assets. Community banks do have a few strategies for mitigating COF pressures.

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South State Correspondent

SEPTEMBER 20, 2022

Last week, the American Banking Association (ABA) held its annual Bank Marketing Conference in Denver, receiving rave reviews. The theme was – developing your marketing superpowers. Amid the brewery networking, superhero costumes, and fun, some fantastic bank marketing lessons were had, and not just for bank marketers.

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South State Correspondent

JUNE 13, 2023

We see borrowers trying to out-predict the market by guessing what the Fed might do, analyzing economic trends, studying graphs, or talking to friends at cocktail parties. No one can time the market when purchasing a stock or locking in financing costs – the market is too efficient and unpredictable.

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South State Correspondent

SEPTEMBER 25, 2023

On September 20, 2023, the Federal Open Market Committee (FOMC) left its benchmark rate unchanged, but it would be a mistake to conclude that the committee did not send a strong message about the projected path of future interest rates. in 2023 and slightly higher in 2024.

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South State Correspondent

OCTOBER 26, 2023

Banks will need annual authorization to use the data and will need to “minimize” the data that is being used to just the essential elements, thereby putting a crimp in future bank marketing efforts. The post Recap of Money 20/20 USA 2023 and 10 Banking Thoughts appeared first on SouthState Correspondent Division.

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Independent Banker

DECEMBER 31, 2022

Stevens’ novel, The Lies About Truth , that captures our ethos heading into 2023: “If nothing changes, nothing changes. I believe 2023 will continue our industry’s forward momentum as our members position themselves to be the agents of change that find and champion new opportunities. You want change, make some.”

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South State Correspondent

NOVEMBER 30, 2022

Banks have ceased using LIBOR to price assets and liabilities after 2021. The remaining LIBOR cash and derivative instruments will continue until June 30, 2023. An index representing overnight rates and term structures is fundamental to community banks that sell products with multiple payment periodicities.

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Independent Banker

OCTOBER 31, 2022

FedNow can be another positive differentiator for our nation’s community banks, but we must be ready for this real-time service and its 24/7/365 requirements.”. By mid-2023, we will be able to begin offering this solution to our customers. Formulate marketing campaigns to inform customers. Photo by Chris Williams.

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Independent Banker

FEBRUARY 28, 2023

As community banks navigate this process, there are plenty of resources available to answer questions and provide guidance. Three sources of information on FedNow As community banks look to take advantage of this new opportunity, they seek resources to help them navigate the journey.

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Abrigo

DECEMBER 22, 2023

The most-read lending & credit blogs in 2023 Probability of default, CECL model validation, and stress testing were among Abrigo's top blogs on ALM, CECL, and portfolio risk this year. download NOW Takeaway 1 The most popular blog posts on the Abrigo site reflect many of the priorities community banks and credit unions had in 2023.

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South State Correspondent

JANUARY 25, 2024

Recently, larger lenders, including Bank of America, JPMorgan, Goldman Sachs, and Wells Fargo, have announced that they are seeing an elevated appetite for forward rate locks on loans for future anticipated commercial borrowings. But this application also prevents competition from national banks after the construction and stabilization.

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South State Correspondent

JULY 30, 2023

How should community banks target and compare their ROE to the industry and their peer group, and what defines a top-performing bank? Most importantly, is there an ROE level ensuring a bank remains long-term independent and healthy? Bank ROE Historical Performance Total assets for all FDIC-insured institutions was $23.7T

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Independent Banker

DECEMBER 31, 2022

We recently spoke with community bank CEOs from across the country to gain insights on how they’re proactively positioning to manage risks and take advantage of growth opportunities in the coming year. Following some respite in 2022, community bankers are bracing for a tougher economic landscape ahead in 2023.

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Abrigo

NOVEMBER 13, 2024

As rates stay high, concerns about credit risk and borrower health are top of mind for bank and credit union leaders, especially as it relates to lending to small businesses. Longer working capital cycles drive line utilization Businesses are holding inventory longer (81 days in 2023 vs. 72 in 2019) and extending receivables (31 to 41 days).

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South State Correspondent

MAY 9, 2022

In our previous article ( HERE ), we reviewed the banking industry’s cost of funding earning assets (COF), and we compared how community banks’ COF behaves relative to national banks in a rising interest rate cycle. Second, the market has priced in interest rate risk, but it has not priced liquidity risk.

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Independent Banker

NOVEMBER 30, 2022

How we hire, retain, recruit and advance our missions amid momentous change will remain a key topic for community bank leaders and will influence our plans for the future. This month’s issue focuses on the best banks to work for, because community banking is about so much more than transactions. Where I’ll Be.

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South State Correspondent

JULY 26, 2023

The bigger risk to community banks’ business model is not a moderate recession induced by aggressive interest rate increases by the Federal Reserve. The Atlanta Fed GDPNow forecast is for Q2 GDP to be just under 2.50%, and the Fed Funds futures market continues to push out the start of the interest rate cuts.

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South State Correspondent

JANUARY 30, 2023

Rising funding costs and decreasing liquidity at community banks are causing managers to change pricing methodology for new credits. We estimate that 25% to 50% of community banks have a policy requiring minimum yield or credit spreads for new commercial loans.

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Independent Banker

DECEMBER 31, 2022

And with 2023, we have no shortage of adventures awaiting us. It’s a challenge to be sure, but it’s one that community banks have previously faced with strength. In fact, this is when community banks shine, bringing stability to customers simply by being relationship bankers who see them and know them.

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South State Correspondent

SEPTEMBER 12, 2022

The banking industry’s cost of funds (COF) is highly correlated to short-term interest rates. However, as of Q2/22, the average community bank’s COF has risen only a few basis points. The COF over the past five quarters is shown for three asset peer groups: banks under $1B (3.5k The Data on Cost of Funds.

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Independent Banker

OCTOBER 31, 2022

A convergence of economic and marketplace factors presents community banks with new opportunities for innovation and growth as they look to the new year. For community banks that have yet to start evaluating digital solutions and providers, now is the time to act. Illustration by Alex/Adobe. By Charles Potts, ICBA.

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South State Correspondent

JUNE 20, 2023

The futures market forecasts one additional hike in 2023, but more importantly, no interest rate decreases this year. The Fed’s Dot Plot now shows a 5.625% terminal fed funds rate in 2023 and a 4.75% rate at the end of 2024. The post What a Hawkish Fed Pause Means for Banks?

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Abrigo

AUGUST 13, 2024

One challenge for listeners is that banking podcasts often don't have their own category on these platforms. As a result, you must wade through a bunch of podcasts on financial markets or general business news to find podcasts focused on the banking industry itself. or those primarily focused on the domestic banking market.

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Independent Banker

MAY 31, 2022

Josh Prejean (right) of Bank of Zachary, here with mortgage client David Rozas, says community banks must compete through customer service. We look at how community banks can counter nonbanks’ offerings through streamlined technology, customer service and other strategies. million in 2023.

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South State Correspondent

FEBRUARY 27, 2022

At SouthState, we use a program called ARC (Assumable Rate Conversion) that allows borrowers to pay a fixed rate of interest for as long as 20 years, but the bank retains a floating rate asset. ARC is custom designed to allow community banks to compete anywhere on the yield curve. Current Risk in Term Lending.

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South State Correspondent

OCTOBER 23, 2022

Based on current projections, the existing hiking cycle will reach 5.00% in the Fed Funds rate in February 2023. Application to Community Banks. First, banks must be careful to measure and shock interest rates to understand the possibility of debt service coverage ratio (DSCR) deterioration. Dec 2015 – Dec 2018.

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South State Correspondent

JULY 7, 2024

This example of a two-way asymmetrical liquidity option is common at most banks, and this was the primary cause of several high-profile bank failures in 2023. If rates fall during that period, the borrower will ask the lender to reprice to market or threaten to take business elsewhere.

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South State Correspondent

DECEMBER 13, 2023

Most market participants are focused on just one monetary policy tool available to the Fed – short-term, federal funds rates. The graph below shows COF for the same three groups of banks. Community banks’ COF increased 18bps in Q3/23 sequentially, while the Fed has been on pause since July.

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Independent Banker

DECEMBER 31, 2022

Here’s how community banks can enhance their payments offerings. of banks’ revenues come from payments. Payments account for up to 30% of bank revenue, and that income stream is under attack. billion-asset Bank of Tampa in Tampa, Fla. billion-asset Texas First Bank in Texas City, Texas. By Colleen Morrison.

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South State Correspondent

FEBRUARY 29, 2024

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. percentage points bringing forward looking LGD to 44% of the average community bank loan amount.

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