At this juncture of the credit cycle, community banks must be judicious in the way they source, structure and book commercial loans. Competition is stiff, and every banker is trying to outsmart and out-compete multiple lenders vying for the same customer. Unfortunately, negotiating terms and pricing on a commercial loan feels a little like entering a bazaar wher
Banker To Banker
When it comes to most missions, initial communication is one of the major factors of success. If there is one common flaw in execution, it most likely stems that the initial mission and its objectives were not clearly communicated, and understood by a group’s members. The “Banker’s Intent” model is a derivation on fire service’s “Leader’s Intent Model” and is a communication framework that is being used to currently fight some of the largest wildfires in the history of the United States.
We believe all banks should have a hedging program to manage interest rate risk while providing a variety of loan structures to satisfy the borrower’s, not the bank’s needs.
In the quest for deposits, one successful tactic at top performing banks is to target the right customers. While banking everyone in your community is egalitarian, it is also a poor use of resources. Some customers offer better returns because they use more banking services and have more deposit balances. Not to say you want to ignore some parts of your community, but why not focus more of your resources on those customers that are going to make your bank more profitable?
Over this past year, one of our borrowers, Burger King, taught us something about marketing. It rolled out a 15-second TV advertisement where a Burger King employee said, “OK Google, what is the Whopper burger?” If you had a Google Home unit within range, the phrase prompted the speaker to read the Wikipedia entry for the Whopper. The Wikipedia page was edited to describe the Whopper in the most mouthwatering words possible.
Many executives at community banks fulfill many functions and wear numerous hats. However, we are advocates of separating the Chief Lending Officer (CLO) and Chief Credit Officer (CCO) functions at community banks from both an operational and strategic perspective. We still see some community banks that either do not have an official CLO role or combine the CCO and CLO roles. We feel that CCOs cannot be effective fulfilling the true strategic objective of drive lo
We recently heard of a regulatory team that during a safety and soundness exam played “Management Bingo.” They took senior executive’s business cards, put them in a bowl and picked one. The CEO (if he was not picked) had to quickly tell or show an action plan for the succession of the executive that was chosen. If the CEO were chosen (and they put two cards in if the CEO was also President), then the Board would have to show a plan.
Everyone loves content. It is likely that you clicked on this article because you were curious about what content we have to offer. Content builds credibility, engagement, brand and amplifies your voice. Content also drives bank sales. Part of the challenge is that few banks train their relationship managers and marketing staff on how to create an effective portfolio of content. In this short article, we highlight a couple of important points on contact and then provide the recording of our recent training video on the topic.
If your ATMs are getting old and you are thinking about replacing them or if you have a branch transformation strategy that entails restructuring to a more cost-effective physical delivery platform, going to an interactive/video teller machine (ITMs) must be a consideration. This isn’t an easy decision, especially when there are few banks that can make a clear case for an ITM, but in this article, we take a look at the strategy and economics of what a successful execution looks like.
One of the most common structures in commercial lending is that ten-year commercial loan that is structured as a five-year fixed rate loan with a rate reset at the end of five years. There are two main problems with this loan structure, one having to do with credit and the other having to do with interest rate risk that makes this one of the worst performing loan structures in a rising rate environment for community banks. In this article, we delve into the data to compare two popular loan structures.