As the yield curve flattens, the difference between Prime and ten-year fixed commercial loans rates gets smaller. Community banks face a dilemma in how best to manage interest rate risk – which affects both the bank and the borrower. Banks are further challenged to offer loan structures that maximize their competitive advantage and differentiate their product from multiple competitors. We see one specific strategy that community banks are deploying that utilizes upfront non-interest income in structuring owner-occupied and investor CRE term loans for ten to 20 years, eliminating both the
Tag: Non-interest income
If you ever wanted to know the most popular strategic planning initiative for a bank over the last 3 years it is this one – generate more non-interest income. An estimated 30% of banks have this as their focus. The funny part is that despite this being a major conversation and the source of many meetings, most banks don’t take care of the basics. Today, we will highlight the 12 best ways to generate more fee income when it comes to commercial lending (in no particular order).