Banker To Banker

Credit Underwriting

Sometimes, a company or real estate project with higher debt levels means less risk, not more. This concept is counterintuitive as credit underwriters have been historically taught that more debt means higher risk. However, the statistical evidence does not bear this out.

 

Bank Direct Marketing

While we are big fans of digital and email marketing, traditional advertising in banking still has its place. Being quantitatively inclined, one of the easiest traditional advertising methods to track is direct mail. Next to email marketing, direct mail also has one of the best returns – better than digital, social media, print, radio and TV. Today, we present our data on our direct mail efforts with the goal of helping all community banks improve their marketing effectiveness.

 

Using ARC For Profitability

What is your bank’s strategy for keeping good loan customers? If you are like many banks, you may not have a formal strategy and with prepayment speeds averaging 24% for fixed rate loans. That is a tremendous amount of value running out the door.

 

Bank Deposit Promotion

It is a testament to your marketing when your bank’s promotion is traded in the secondary market. Chase is currently offering a $200 bonus when you open a savings account with $15,000 or more (for 90 days minimum) of money not already at the bank. 

While a $200 cash bonus for a new account is on the high side of deposit account cash promotions, it is not unheard of. What is different is that Chase correctly chose to do this with a targeted mailed coupon instead of an open offer, as most banks would have done.

 

Customer Experience

Lots of banks try to create a customer experience that is unique. While many succeed, more fail.

Appraisal Accuracy

A look at 134 commercial real estate loans that were just sold last month with recent appraisals reveals some interesting data points for banks. The sale price was higher by about 10% than the appraised value. In looking at the details, appraisers placed a heavier weight on current capitalization rates versus investors that tend to look more forward. This begs the question – how accurate are commercial real estate appraisals and should banks be basing loan amounts on them?

 

Webinars at Banks

In banking, it takes six to twelve “touches” to a potential customer before you can convert them to a full blown customer. One of the best ways we have found of segmenting and qualifying a customer is to hold a webinar. The webinar is an efficient way to start discussing a topic with a wide number of customers that are just entering the sales funnel. While most webinars from community banks are product related, we have found success, and encourage other community banks, to hold webinars on topics where the bank can become a local thought leader.

Bank Payroll Services

As loan growth picks up at banks, we see more attention turning to gathering low cost, high duration deposits. One of the best ways to do this is through grabbing the operating account at businesses. One of the best ways to get the operating account is to offer an online, low cost set of payroll services. This is why the offering of online payroll services is picking up for community banks.

Risk Assessment

In this age of enterprise risk management, a new product or process risk assessment is mandatory. A good risk assessment looks at any new effort from a variety of angles and tries to quantify the unmitigated risk. While a risk assessment is an important step in protecting current operations, it is also the place to understand the opportunity cost of not offering the product and the potential revenue that the new effort or procedure will bring to the Bank.

 

Bank Sales

Last week we had a healthy internal debate over the value of municipal customers. When it comes to profitability, municipal customers are either very profitable or not very profitable – there is really not much in the middle. In other words, municipal profitability does not follow a normal distribution and as such, you have to choose your municipal customers wisely.

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