August 2020

Here is the Biggest Problem Banks Face with PPP Forgiveness Processing

PPP Forgiveness Processing

There is no surprise that you can only do so much when it comes to educating PPP borrowers. We have produced a comprehensive website, executed a detailed email campaign, conducted a series of webinars, produced videos, have a Getting Started Guide, and distributed a checklist - still, borrowers remain deficient in completing their application accurately. In this article, we explain this educational black hole, provide the latest data, and detail not only what it means for banks looking to process applications more efficiently but ways to solve the problem.

What The Election Means For Credit

The Impact of the Election on Credit

It is around this time before a presidential election that bankers start to ponder how the results of the election will affect credit, interest rates, and the general business environment.  The stock and the acceptable answer is that presidents get too much credit when the economy does well and too much blame when it slumps. The complex and intertwined US capitalist economy goes through boom-and-bust cycles independent of any president’s actions.

Here is a New Idea to Blow Up Your Bank’s Strategic Planning

Bank Strategic Planning

If you are like 90% if banks out there, chances are your strategic planning process is not all that effective. Chances are your strategic planning process is a good budgeting exercise, but a poor driver of strategy. It likely your current strategic plan contains something about growth, geographical expansion, and digital transformation. You could exchange plans with another bank, and neither sets of shareholders would know the difference.

Early Data on PPP Forgiveness Processing

Improving the PPP Forgiveness Process

Without approving the HEALS or HERO Acts, Congress gave little reason for banks to delay their Paycheck Protection Program (PPP) Forgiveness program. As such, many banks, like ourselves, launched on the 10th. With a couple of weeks of testing and processing, we thought it might be helpful to give an update that can hopefully inform your process. So far, 12,000 PPP Forgiveness applications have been submitted by 1,000 lenders (out of the 5,500 who participated).

How To Project Credit Quality In the Age of Covid-19

The Pandemic's Impact on Credit RIsk

Community banks face a new and unfamiliar underwriting risk – an epidemiological disruption that has limited visibility and short history that affects both free cash flow and collateral values.  In addition to debt yield, debt service coverage ratio, and property values, banks now need to understand how all of these credit parameters are going to change because of Covid-19.

When Will Your Bank Start Using Chat and Chatbots?

Live Chat and Chatbots in Banking

It is not a question of “if” it is only a question of “when” you will start deploying chat and chat automation at your bank. It should be on your radar screen for several reasons, the first of which is that it will soon be the fastest growing and the most preferred communication channel among your customers. That trend got a boost when Apple announced last week the production release of its Business Chat product.

Commercial Lender Survey Results

The State of Commercial Lending

We sent out a survey to several thousand community bankers across the country to understand bankers’ concerns, challenges, and opportunities in the current business environment.  We feel that organizing an exchange of ideas and sharing of strategies is beneficial to many bankers. We also offered resources (videos, white papers, policies, marketing material, online proposal generators, and calculators) to help bankers obtain information based on their specific survey responses.  The survey only took five minutes and consisted of five questions.

The Risk of The Main Street Lending Program By The Numbers

Main Street Lending Profitability

What is with all the waving we do at the end of Zoom calls? Should we start waving as we back out of the room for in-person meetings in the future? By the same token, many banks are baffled by what to do with the Main Street Lending Program (MSLP), as this is not something we would do in normal times. Yet, we found ourselves both participating and waiving at the end of those MSLP Zoom calls. No matter if your bank is going to participate in MSLP or not, understanding the risk involved is a master class in loan structuring and credit.

New Skills in Managing Employees and Customers Learned From a Pandemic

Remote Working Improvements

Covid-19 has changed many aspects of banking from branch operations to credit underwriting and remote supervision of employees. Many community bank managers are physically distanced from their teams because of the pandemic. This distancing creates new challenges on how to supervise, motivate, communicate with, coach, train, and review bankers. We face this same challenge and we would like to share how we see other bank managers handle this challenge as well.