Banker To Banker

Using Data To Deliver True Relationship Banking Results

Bank Marketing with Data

Many banks, including us, make the mistake of talking about being a relationship bank, but market on transactions. We tout checking products, loans and business banking solutions and then wonder why our product per customer count is not higher or our lifetime value is not larger. We struggled with solutions until our friends over at Infusion Marketing Group taught us a new trick about the “convenience universe.”

 

5 Ways How Bank Hedging Can Add Value To Lending

How Swap / Hedging Programs Add Value to Banks

Banks all understand interest rate risk, so understanding how hedging managing risk is an easy one. However, there is currently a conflict with banks that on one hand say they don’t believe rates are going up so taking more fixed rate exposure is acceptable, yet have a rate view of that of the forward curve (which does show rates going up). This issue is compounded by the fact that these very banks mostly have loan growth for 2015 exceeding GDP (3%) which would indicate faster than expected expansion and indicates higher than expected rates.

Understand Your Bank's Position: New Bank Risk Management Tool (For Free)

Bank Enterprise Risk Management

At our core, banks are risk-adverse. It’s a good thing too, as we are all more leveraged than the average hedge fund such that each decision is amplified. Every time the sun comes up it is a roll of the dice as the market forces of credit, interest rate, liquidity and a dozen of other risks assault a bank.  What separates success from failure is a bank’s ability to understand what risks to avoid, what risks to broker, and what risks to exploit.

How The G20 Summit Just Changed The Nature Of Deposits (And What It Means For Banks)

Marking Deposits To Market

 

Leaders of the G20 Nations met over the weekend and agreed to introduce new banking regulations that will result in deposits being treated more like an investment and less like "cash and cash equivalents."  Watch our animated video to learn more and get our take on what it could mean for community banks.

Why Smaller Loans Can Create More Risks For Banks

Loan Profitability

Most banks feel comfortable making smaller sized loans. The obvious reasoning is that a smaller loan will present less of a loss should it go into default - less of a loss means less risk, and, therefore, higher return.  That reasoning could be faulty and could end up getting your bank into trouble as often times it is the larger loan that presents less risk. There are three reasons for this. First, the acquisition cost of a larger loan is just slightly more from a dollar value perspective (and lower on a percentage basis) than that of a small loan.

This Credit Union and Banker Amazed Us

Bank Culture And Branch Design

If you are looking for examples of how banks have to change, stop by Grow Financial Federal Credit Union the next time you are in Tampa and see Natalia Spratlen. Grow Financial FCU presents a nice, open small footprint branch space and creates an environment of high productivity. That is not unusual these days as lots of banks are now redesigning their branches. However, what is unusual is our interaction with Natalia.

 

Serving Those That Serve: The Profitability of Military Banks And Accounts

Military Banks and Products

One thing we love about the banking industry is the patriotism and respect for the armed services. On this Veteran’s Day, like many banks, we want to personally thank all those that served or serve protecting our great country, our ideals and, most importantly, our freedom. We also want to highlight all those banks, like CenterState, that actively recruit and train Veterans as bank employees as they tend to make above average bankers. Finally, we want to highlight those banks that have specific military product offerings.

5 Simple Things You Can Do This Week to Improve Your Bank

Loan Purchases

The Republicans were not as popular as the ‘Alex from Target’ meme yesterday, but it was enough for a strong win. Ironically, the party that has been in full obstructionist mode trying not to change anything now has to find a way to build consensus and govern for change. For banks, moving control of the Senate Banking Committee is said to be favorable, but we have our doubts as we see little public support for restructuring Dodd-Frank too much.

Once Upon A Time: How An Examiner’s Enlightened Words Turned This Bank Around

Bank Culture

Once upon a time there was a bank that was close to failure. It used to be a great bank with branches filled with vibrant customers and earnings as thick as Kansas soil. However, over time customers moved on and the staff started to feel that they had little to offer compared to the largest of banks. This was a bank that was dying a slow death.

 

Banking Industry and Community Bank Performance for Third Quarter 2014 [Presentation Link At Bottom]

Bank Performance

The latest industry data was released over the weekend and a complete presentation is attached at the bottom of this blog post. Third quarter bank industry data shows return on equity performance was down to 8.2% for the industry, but up at 8.3% for community banks below $25B in total assets. Like past quarters, most of the positive improvement in earnings came from asset growth and increases in asset quality. While yields on earning assets decreased for large banks, they increased 3bp to 4.25% for community banks.

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