Banker To Banker

Here Is Why Your Bank Should Reduce ATM Fees

Why Your Bank Should Reduce ATM Fees

Driven by the need to increase fee income, community banks have been raising out-of-network ATM fees which are now at record highs. While helping with fee income, this could be a long-run strategic mistake for community banks and may serve to decrease profitability instead of helping it. The larger banks, such as Bank of America and Wells Fargo, have a customer base that is comparatively less fee sensitive. Their customers will pay for the convenience of their ATM network.

Understanding Liquidation Timing To Limit Loan Losses

Bank Loan Loss Timing

When it comes to dealing with commercial property, understanding the timing of liquidation in relationship to a loan’s maturity and the time of default is important on several levels. Knowing the data allows banks to make better loan pricing and loan workout decisions. For example, loss severity is greater for loans with 75% loan-to-value (LTV) than with 100% LTV. This is counterintuitive but can be accounted for by understanding that bankers move faster to liquidate properties that have higher LTVs.

Elon Musk Shows Bankers What Pricing Discipline (and Culture) Looks Like

Bank Leadership

Elon Musk, wearing his Tesla Motors CEO hat, was upset that some employees were violating his rule that Tesla’s product shouldn’t be discounted for anyone. This precept was made famous when Mr. Musk famously wrote a personal check for the full price of his Tesla. Not negotiating and not discounting your product’s price, whether it is a loan, money market account or car has an important impact on economics but an even more important impact on marketing. Most of all, the concept has a massive impact on culture.

Why We Did It: Platinum Bank Acquisition

Bank M&A logic

This week we announced the acquisition of Platinum Bank Holding Company, the parent of Platinum Bank. Platinum Bank is a $584mm total asset competitor located next door to us in Brandon, FL.  The acquisition makes us a $5.6B asset sized institution and gives us the number one deposit share in our core market and the number two community bank market share in the State. While there are lots of reasons to acquire another bank, this one illustrates a couple of interesting points that both bank buyers and sellers should consider for their next transaction.

How Money Market Fund Changes Will Continue To Impact Banks

Managing Cost of Funds

Money-market mutual funds have been one of the most popular products for investors but recent changes have made the product less so. A couple years ago (HERE), we wrote about the tactical opportunity that banks had for capturing inexpensive deposits from institutional and corporate investors. The tactic worked beautifully as banks that focused on pitching their money market deposits and CDs saw an influx of funding back in late 2014 and 2015.

Here Is A Brainstorming Technique That Will Help Your Bank

Effective Bank Brainstorming

With strategic planning season upon us, many banks will be conducting brainstorming sessions to come up with ideas on cyber-risk mitigation, fee income, loan/deposit generation, new product ideas, M&A options and a host of other topics. As we often say, the keys to success are in the process. Get the process right and success will follow. When it comes to group brainstorming, we have tried all sorts of techniques and apps and have found the old Post-It note method works best.

How To Replace The H15 Screen For Bank Management

Goodbye H.15 / H15 Market rates

Yesterday, many banks realized that the Federal Reserve Board of Governors’ H.15 website was no longer going to be the source for daily interest rates and indices.  For decades, the “H15” screen was ubiquitous in banking and was the definitive place to get Libor/Eurodollar, Prime, Treasury, swap, mortgage and bond levels on a daily basis. Banks used these rates to price loans and deposits as well as to feed various models to include asset-liability (ALM), loan pricing, relationship profitability and funds transfer pricing (FTP) calculations.


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