Banker To Banker

Bank Performance

Many bankers use this equation:


Shareholder Value = Net Interest Margin


However, the equation really looks like this:


Shareholder Value = Discounted net cash flow of customer relationship x probability of recognizing net cash flow


This is a graphic of all 137 million jobs in the US that gives you a feel for the relative size of each employment sector, including the fact that services now makes up approximately 66% of all jobs. 


Labor in US


Source: NPR / BLS Data


Bank Marketing

Banks are always in need of good marketing themes and promotion tie-ins. When marketing is paired with an event or a holiday it becomes even more effective. Promotions on bank website supported by keywords or in the branch supported by word of mouth, leveraging events can add 10% to 20% more marketing effectiveness. Certain holiday’s and events tend to lend themselves to bank promotions, while others do not. Holiday’s like MLK, Jr. Day, Valentines, Mardi Gras, St.

Bank Risk

2014 holds a myriad of issues, some of which were felt last year.  For example, while interest rate risk was talked about, in 2014 it will be monetized as intermediate rates continue to move and prepare for a more rapid accent in 2015.

Banking Facts















The KBW Bank Index finished up 35% in 2013 - the most in 16 years. The S&P, by comparison improved 29%. Many banks were up more than 100%. 2014 looks good, but maybe not that good.


Bank Stock Performance







Bank Customer Value Proposition

Every January, we advocate taking another look at your value proposition to see if there are any changes that need to be made.


Part of the problem with the current state of banking is that it is hard to tell one community bank from another. Because of this fact, loans, deposits and other bank services have largely turned into commoditized products. In some cases, bank margins are lower than they are for bottled water. If retailers can charge up to $6.00 for water, surely a bank can differentiate itself.


11 Things Bankers Shouldn't Say

While bankers have rightly started to change the industry’s image from being old and stodgy to being hipper, we caution against swerving into dork-dom.  The other day we were in a meeting where a banker started “raising the roof” with the double open hand pumping gesture over his head because of getting a loan approved.  Unless you are working with Habitat for Humanity, no roofs should ever be raised in banking.


In case you didn't get it...


This is one of the more common fraud pattern for small dollar loans that was highlighted by Clarity at nonPrime101 but one that all account officers should be on the look out for. Note the opening and closing of multiple accounts and the cell phone number change. 


Fraud Pattern

Interest Rate Risk to Commercial Real Estate Lending

Given that rates are poised to move up in 2014, this could negatively impact commercial real estate (“CRE”) loan quality. Fortunately, rising rates create some offsetting forces that could help or hurt underwritten CRE loans. The net impact of these multiple forces is why bankers get paid the big bucks to take the risk.  To better understand these forces, we break this down into a quick interest rate risk primer for commercial real estate that we believe every lender should know.