Banker To Banker

Why Banks Need To Celebrate Birthdays

Happy Birthday! While statistically it is likely your birthday is today for approximately 0.376% of you (birthdays are not evenly dispersed throughout the year), we apologize to the rest for missing your special day. We endeavor to improve and hope to collect your birth date as soon as we can figure out a way to ask for your date of birth without being creepy. Our dream is to one day send you a special card or at least an email with a gift inside as when it comes to marketing, that is one of the best campaigns a bank can do.

Bank Satisfaction And Your Strategic Plan [Study]

Bank Customer Satisfaction

JD Power’s 2015 US Retail Banking Satisfaction Study that was released in part several weeks ago had some interesting information that might impact the strategy and tactics for community banks. While the full report will not be out until the end of this month, we were highlighting some points for our management so we wanted to share. The overarching good news is that, in general, satisfaction with banking continues to increase and once again community banks led the way with a score of 802 compared to large banks at 786.

 

The Cost of Waiting to Make That Loan

Loan Decisioning

Every day, there is a banker somewhere in the country that declines to make a low margin loan for fear of hurting the profitability of the bank. While we have discussed in the past (HERE) why that lower margin loan you are giving up may be more profitable than a higher margin loan (especially where that loan is an existing customer that is looking to refinance), today we look at the math in order to give bankers a quantitative framework for making that decision.

Should You Have Wifi In Your Branches?

Should You Offer WiFi In Your Branch?

The question came up the other day in our branch if we should equip it with customer wifi. What we thought was an easy question to answer, seemed to have some debate starting with the cost and how often customers that walk into a branch will stop and use wifi. After all, if we do our service job right, the customer is in and out of the branch and on their way, so who has time to connect to wifi? While partially true, there are several other reasons why banks may want to equip their branch with wifi that may not be obvious but should be considered.

The One Question Every Bank Should Ask Of Their Customers

Bank Customer Relationship Building

On your bank’s journey to become more of a sales organization, one question that needs to be asked, particularly to commercial and high net worth customers, is “What are your goals for the year and how do you plan on accomplishing them?” While it seems simple, it is amazing how often this question is overlooked by bank relationship managers or business development officers. Not only should that question be asked, but the answer needs to be committed to your bank’s CRM system. For that matter, it should also be part of your bank’s annual review with the customer.

The Interplay Between A Loan’s Collateral Value And Defaults

Managing Loan Risk

We have written a number of blogs on the relationship between commercial loan pricing, loan-to-value (“LTV”), amortization terms and riskiness of leverage.  Our major theme is that the common secondary source of repayment (liquidation of collateral) is much less consequential than the common first source of repayment (cash flow).  There are a few reasons why this is the case.  The primary three reasons are as follows: 1) cash f

The Profitability of the Youth Sports Account

Banking Youth Sports

One of the unspoken cults in America is youth sports. Youth sports is a perfect place to project your adult shortcomings, fears, dreams, hopes and aspirations on to your child all under the guise of teaching teamwork. If uncontrolled, it can become an obsession and the next thing you know you are flying to some distant city, spending thousands of dollars to play a tournament that doesn’t matter.  If this rings true, then we ask – WHAT ARE YOU THINKING? How can you not be making money on this?

 

Managing Interest Rate Risk Prior to Loan Closing

Managing Rate Risk At Loan Closing

Bankers are a conservative bunch. For instance, we like to refrigerate our soy sauce, ketchup and mustard. Why? Have we heard of someone keeling over due to bad condiments? Millions of restaurants keep their condiments on tables for months at a time. The high acidic content and salt in all three make bacteria and mold unlikely, yet thousands of bankers harm perfectly warmed food by putting cold condiments on them, not to mention degrade the taste of the condiment.

The LTV vs. Pricing For Commercial Real Estate (2015 Edition)

LTV and Loan Pricing

Loan pricing depends on many things including cash flow, geography, property type, tenant mix, lease structure, borrower, loan structure and leverage. While loan pricing is primarily driven off cash flows, banks spend an inordinate amount of time worrying about loan-to-value (LTV), but little time adjusting for pricing. Today, we look at the relationship between LTV and loan pricing using data from the month of March.

 

The Data

 

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