Banker To Banker

Bank Conference

Our 2014 Bank Management Conference is coming up on July 10 – 13, 2014, in Amelia Island, Florida and we will have detailed information coming soon.  We can tell you that you don’t want to miss it for 5 very important reasons:


5. Due diligence – You get to meet our whole team in person and see what we are about. This is just good risk management – forget the fact that it just happens to be on the beach at one of the best hotel’s in the world.


Bank Marketing Plan

To amend an old saying, if you give a man a fish he will have food for a meal. If you teach a man to fish he will eat for a lifetime. However, if you convince the world that they need more Omega 3s in their diet, you and that man catching all the fish can be eating steak at Ruth Chris for the rest of your lives – this is the power of marketing.


Bank Incident Response Plan

In the last 24 months, the mindset, the tools and the methodology to deal with a cyberattack have changed. Just the addition of how to deal with mobile attacks is often missing in many bank plans. If you have not updated your incident response plan (“IRP”) in the last year, it might be time – and, this will help.  

Liability management

Many banks have their certificates of deposits modeled on their asset-liability systems without optionality. That is, they treat the final maturity as gospel with little weight given towards repayment.  This could be a mistake, as just assuming the forward curve is accurate, CD’s are set to exhibit about a 20% shorter duration than modeled. In a rising rate environment, banks are short the option value of a CD and thus are exposed to a market loss in the form of opportunity cost should the investor redeem early.

Social Media Policy

The Super Bowl generated 25 million tweets and, by the second half, was more exciting than the game. From “Who wore the fur coat best” to JCPenney’s drunken (or brilliant marketing) Tweets, social media caught our attention and made us laugh.


Underwriting borrower interest sensitivity

We monitor many banking schools and credit training programs and it is rare that we see anyone teach the analysis of a borrower’s interest rate risk position. For that matter, in hundreds of credit reviews that we see a year from a variety of banks, there is rarely a quantification of how rising or falling rates will impact credit risk.

Bank Lending

Listen, some bankers fear making loans below a 4% margin like I fear Florida sinkholes. To put that in context, I wear an avalanche transceiver whenever I am in the State. This makes bank meetings a little awkward, but gives me a fighting chance to be found when I get swallowed up. By the State’s own website, they refer to sinkholes as a “fact of life” which is why Florida is the only state where banks have to consult the “Sinkhole Clearinghouse” database before making a loan.

Bank Ecosystem

While the technology of the smartphone is revolutionary, it was Apple’s App Store that deserves much of the credit. It only took Apple five quarters to surpass Blackberry, the market leader at the time, in large part because iPhone users loved apps. Apps created an “ecosystem” which can be thought of a set of different programs, not only providing value to the user, but making the iPhone more valuable in itself, as well as creating a diversified revenue stream for Apple and millions of app developers.

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