South State Correspondent

OCTOBER 30, 2024

In our previous article ( here ) we analyzed the data on community bank M&A and performance, and we concluded that there is no relationship between community bank size and profitability, as measured by return on equity (ROE). The key insight is to understand how growth translates into bank efficiency.

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South State Correspondent

SEPTEMBER 11, 2023

Therefore, the quarterly profile and Chairman Martin Gurenberg’s commentary on the industry are skewed by the performance of larger banks. In this article, we analyze the underlying data for community banks and focus on the Chairman’s view of the future of bank performance.

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South State Correspondent

MARCH 10, 2025

While we are supporters of community banks using loan-level hedging, we continue to see community banks struggle to properly implement and successfully utilize a back-to-back swap (B2B) program. We understand why, and what community banks need to address to make such a program a success.

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South State Correspondent

DECEMBER 17, 2024

Community banks (under $10B in assets) serve a key role for borrowers, local communities, and the broader US economy. Community banks are better positioned than many other creditors to follow and adapt to local economies, industries and trends, thereby, being better stewards of capital. The number of U.S.

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South State Correspondent

JULY 19, 2023

Of the largest 250 banks, 90% are using interest rate swaps, and because these largest 250 banks hold 83% of all loans, interest rate hedging tools are widely used in approximately 75% of the loan marketplace. This is why the current inverted yield curve makes loan hedging especially attractive to community banks.

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South State Correspondent

MARCH 24, 2025

Our analysis shows that an average community bank can expect $9.7mm NPV of income (about 1% ROA) on a $100mm loan portfolio when the average loan life is seven years, versus only $5mm NPV of income (about 0.50% ROA) on the same portfolio where the average loan life is 2.3 years (both portfolios measured over a ten-year life).

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South State Correspondent

JUNE 5, 2023

Community bank cost of funds is jumping up. As shown in the graph below, the net interest margin (NIM) for community banks declined 22bps in Q1’23. The question is – what will happen to community bank’s cost of funds from here? Increase product engagement and duration.

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South State Correspondent

FEBRUARY 26, 2025

We work with hundreds of community banks across the country that utilize forward rate locks to decrease risk, increase fee income, and stave off competition from national and regional banks. A forward rate lock allows lenders to deliver a known loan rate on future borrower financing without interest rate risk for the bank.

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South State Correspondent

JANUARY 10, 2024

Community banks’ use of swaps (banks’ primary tool to hedge interest rate risk on loans) has increased substantially over the last ten years. Meanwhile, community banks face net interest margin (NIM) and fee income pressure. Only 304 banks (or 6.7% of the total) used swaps directly.

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Jeff For Banks

MARCH 3, 2025

Our recognition as the #3 community bank in the state by GOBankingRates in 2025 reflects our commitment to Growing, Together with the communities we serve. Yet, the banking industry is at a turning point. My goal is to convince you to approve a pilot program that will cement our position as a leader in community banking.

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Independent Banker

NOVEMBER 30, 2022

People want to be a part of something bigger than themselves, and community banks provide that opportunity. Community banking is about serving the greater good. As community continuators, we are part of something bigger than ourselves. Photo by Chris Williams.

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South State Correspondent

JANUARY 6, 2025

Unfortunately, banks that do not often compete for CTLs tend to misprice these credits by a wide margin. Example of a Credit Tenant Loan A community bank that we work with was lamenting that the competition was undercutting pricing on a CTL by about 10 to 20bps (depending on the term shown).

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Abrigo

JUNE 28, 2024

Takeaway 2 Abrigo advisory expert Susan Sharbel offers insights into where your bank should focus its resources to manage interest rate risk, Takeaway 3 Practical steps for preparing your ALM program for rate changes include updating and validating risk models regularly, conducting tests, and reviewing portfolios.

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Abrigo

FEBRUARY 26, 2025

To succeed, banks must carefully balance competitive offerings with cost control while leveraging technology and relationship-building strategies to attract new deposits. Investing in digital solutions not only improves the customer experience but also positions community banks as forward-thinking financial partners.

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Bank Innovation

APRIL 10, 2020

The technological upgrades Happy State Bank made prior to the COVID-19 crisis has helped the lender service and onboard customers digitally and deploy its own SBA Paycheck Protection Program platform in a matter of days, CEO J. Pat Hickman told Bank Innovation.

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ABA Community Banking

FEBRUARY 5, 2025

Community banks are an important part of the U.S. financial system and play a crucial role in both local communities and the national economy, ABA Vice Chair Cathy Owen told members of the House Financial Services Committee.

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Payments Dive

MAY 2, 2023

The company that provides community banks with payments, fintech and other services is gunning for growth with new private equity capital.

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South State Correspondent

DECEMBER 25, 2024

For a Boxing Day promotion, we are giving away 60 days of free usage for up to five bankers at each community bank for our Loan Command application. The objective is to allow you to see the latest profitability of your loans and deposits, on a forward looking basis.

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South State Correspondent

JUNE 21, 2022

This regime is now changing, and community banks need to position their lending and deposit portfolios for a period of monetary tightening. Banks that have avoided, or can reduce, their holdings of riskier assets as much as possible will outperform. Conclusion.

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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. However, recent data from Abrigo shows that privately held companies across the U.S. are displaying their financial resilience.

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South State Correspondent

DECEMBER 25, 2024

To access your bank, type in the bank name on the right side or use any of the filters to create a group. If you are a domestic community bank, you can access the Health Prediction HERE on our Correspondent Bank “Resource Center.” You can also see a time series of each category.

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Bank Innovation

FEBRUARY 9, 2020

Core providers are rolling out digital bank toolkits that can launch a new offering within 90 days, and Jack Henry is the latest contender to join that race with BankAnywhere, a cloud-based system for community banks. Jack Henry is not the first core provider to roll out a “digital bank in a box” product for […].

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ABA Community Banking

FEBRUARY 20, 2025

In rural southeastern New Mexico, bank CEO and varsity bowling coach Ken Clayton often takes his team on 500-mile one-day roundtrips for bowling tournaments. For Clayton, that commitment to going the distance is also what community banking is about.

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South State Correspondent

JUNE 11, 2024

FDIC-insured “Problem Banks” list has been increasing over the past two years. For the community banking industry (banks under $10B in assets), this is particularly troubling as the number of community banks earning negative return on equity (ROE) spiked to 237 institutions in Q1/24, or 5.71% of all community banks.

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South State Correspondent

SEPTEMBER 9, 2024

However, for community banks (under $10B in assets), the ROE declined to 10.44% (from 10.57% in the previous quarter). The Data In Q2/24, the number of FDIC insured community banks declined to 4,104 (a decrease of 27 community banks for the quarter). of all community banks had negative ROE for the quarter.

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South State Correspondent

SEPTEMBER 30, 2024

In Q2/24 the average return of asset (ROA) for community banks (under $10B in assets) was 1.08%. But within the community banking sector, performance varied among banks significantly and a large swath of banks need to improve ROA. of community banks reported negative ROA. Another 16.2%

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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

APRIL 30, 2024

An inverted yield curve, continued bank failures, and the desire to manage risk and offer clients higher service are all factors that are driving more community banks to adopt a loan hedge program. Community banks do this profitably by turning transactional accounts into relationships.

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South State Correspondent

APRIL 30, 2024

An inverted yield curve, continued bank failures, and the desire to manage risk and offer clients higher service are all factors that are driving more community banks to adopt a loan hedge program. Community banks do this profitably by turning transactional accounts into relationships.

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South State Correspondent

FEBRUARY 12, 2025

In this article, we quantify commercial loan pricing trends from our Loan Command data that will hopefully help community banks price more effectively and win more profitable business. As such, unless a bank thinks a recession lies ahead, the risk/reward profile is likely going to be the best community banks have seen.

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