Banker To Banker

Here Is A Simple Fund Transfer Pricing Method For Banks

FTP In Banking

Funds transfer pricing (FTP) has been an important tool for financial institutions for several decades. The methodology was introduced to banks in the early 1980s to help allocate corporate costs among business lines. Since then, the mechanism has been central to also helping allocate risk among business units. For instance, if your bank has interest rate sensitivity, what portion of the risk is driven by fee lines (f.e. mortgages), loans and deposits. In this article, we look at the concepts of FTP and detail how banks can use the methodology to better manage risk.

 

Where Your Deposit Balances Are Going

Deposit Management

Go to any bank conference, bank investor gathering or analyst meeting and the hot topic is the slowdown in deposit growth. As the economy keeps rolling and the Federal Reserve continues to raise rates, the topic of a bank’s increasing cost of funds, slowdown in deposit growth and the jump in liability interest rate sensitivity are on everyone’s minds.

Generating Growth – Board Games

Bank Sales Culture

Do you take Binion or Floyd this round? That was the question that was asked at one $400mm community bank’s annual board draft. This bank produces a net growth rate for loans AND deposits of 20% per year and stands out as an institution that has strong credit, marketing, and a strong sales culture. In this article, we take a look at one tactic that makes them stand out.

 

The 5 Best Ways To Use Content To Drive Bank Revenue [Webinar]

Leveraging Bank Content

As most of our readers know, we are big fans of using content to inexpensively acquire customers. The tactic helps to pull prospects into our brand, helps generate leads and helps with conversions. Content is an approach that can differentiate both the bank and the relationship manager. As they say, if you are using content, there is no such thing as a cold call.

10 Tactics To Dampen Deposit Betas

Lowering Deposit Costs

Cost of funding for community banks has risen notably, but the banking industry’s rising deposit betas is creating a greater challenge for community banks.  Deposit beta is the change in funding costs divided by the change in interest rates.  Rising deposit betas may require some community banks to change their focus on customers, products and ALM assumptions or risk a reduction in NIM and profitability. In this article, we highlight the current and projected state of deposit betas and then outline ten of the best tactics for dampening or even lowering the beta at your bank.

 

Here is What Your Future Branch Portfolio Looks Like

Managing Branch Transformation

Last week’s article on branch transformation generated more questions than usual with many bankers asking what an “optimized” branch network looks like in the omnichannel model. While we are not confident that most community banks can achieve that model and would be better off focusing on a mobile-first architecture, most banks are in the process of trying. In this article, we review what a new branch delivery portfolio might look like, looking at both the economics and engagement of each location tactic.

 

Branch Transformation: A Q&A with American Bank of the North

Branch Plan

We recently sat down with Marci Knight, CMO for American Bank of the North - a $550 million community bank with nine locations across northern Minnesota – to get her thoughts on the future of the branch and what customer engagement looks like over the next ten years. 

 

Nichols: How does your bank think about branch network ten years from now?  More or fewer branches?  Will the size be shrinking?  What will the branch look like?

The 8 Virtual Functions You Need For Branch Transformation

A Branch Transformation Strategy

If you are a bank that believes in either the omnichannel or mobile-first view of the future, then you need a five-year roadmap to achieve the transformation. If you are a closely held bank that is $500mm in assets or below and do not have the need to grow, then it’s possible that you can skip this strategic step and take your chances. Other than that, not having a clear transformation roadmap within your strategic plan is asking to be sold at just slightly above book value.

Understanding Your Loan Competition To Sell More Effectively

Competitive Lending

To compete effectively, community banks need to understand who their competitors are; the products and services that competitors offer; plus, how the competition is positioning and selling these products.  Conducting competitor analysis allows banks to rank themselves in the industry, leverage competitive insights, discover trends and improve their product offering.  Unfortunately, many community banks do not have the resources to conduct a thorough competitor analysis.  We would like to share one recent pitch from a small regional bank on how they position and sell a novel prepayment provi

PLANNING FOR GROWTH: THE 6 WAYS TO GROW BANK EARNINGS

Strategy & Bank Growth

As your bank heads into strategic planning this year, it is likely that one of the first, and most important, questions to answer is  - What level of growth should the bank set as a target for next year?  While seemingly a simple question, the answer trips up many bankers. In fact, some bankers get it wrong by 180 degrees. In this article, we look at some factors to think about when deciding your growth targets.

 

Getting Asset Growth Directionally Correct

 

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