May 2016

The 8 Best Times To Market Bank Products

Banking Marketing At The Point Of Inflection

Banks that are targeting Millennials with marketing dollars might be wasting their money.  The same holds true for banks that are trying to market to Boomers or any other target demographic. In fact, we believe that marketing to a demographic is an inefficient use of resources. You see, no demographic is one-dimensional. Every person is made up of a group of traits and Boomers, for example, are equally attracted to easy mobile banking, just as Gen X, Y and Millennials.

Missing Man Table

Memorial Day Tribute

To all the superheroes that gave their lives in defense of our great nation and for the protection of our freedoms - Thank You. We remember and honor your sacrifice. 


In this spirit, here is one bank's touching tribute to our fallen - an empty table set up in one of their Tennessee branches.


Nice work Wilson Bank & Trust.



Community Bank Commercial Loan Default Rates – Current and Projections

Quantified Lending Risk

We analyzed default rates through 2015 for banks between $300mm and $3B in asset size.  Historical default rates were measured and analyzed for various loan categories for this bank set.  We also reviewed Moody’s Investor Services corporate default and recovery rates through 2015 and considered which industries may present opportunities for community banks from a yield/risk perspective and as a way to diversify from real estate concentrations. 


How To Sell Your Bank’s Most Important Product – Part I

Selling Bank Treasury Services

If you ever wondered about the future of banking, we can tell you it lies directly in the path of treasury management. Loans will continue to be commoditized, other bank services will be cannibalized by non-banks (payments, etc.) but the treasury management platform will serve to differentiate banks. Every business needs some sort of treasury management banking function and with the rise of technology, banks will start to differentiate themselves by creating different platforms.

Pricing Bank Loans For Default Volatility

Controlling Lending Risk

If you got past the title it is likely that you care about the accuracy of your loan pricing more than the average banker. Banks have long ignored the variability around default risk and it is starting to be a problem, as with tighter spreads, there is now less room for error. While bankers solve for credit risk through taking loan loss reserves and through pricing, it is rare that a community banks takes into account default variability. Many large banks do and this article shows how community banks can gain about 80% accuracy through a simple methodology.

8 Steps To Improve Your Commercial Quote Sheet

Closing More Commercial Loans

Either buried deep in a proposal letter, or attached to the back, lenders will present one of the most important aspects of the commercial term loan – the structure and pricing of the loan.  Many lenders will have their preferred format and presentation style, and certain banks will have a uniform template for lenders to use, however, for the most part we see ad hoc and confusing quote sheets without the elements that we feel are important in providing superior customer service or the compelling information to winning the client’s business.  We would like to share our observations on how a

How To Become An Expert At Deposit Pricing

Setting Deposit Rates

You can always tell a good banker by the way they handle their deposits. When it comes to loans, it’s hard to discern expert level skills unless you know the market and know the credit. Deposits, however, are pure. When we analyze a bank, it is normally the first thing we look for as deposit pricing and structure is the one metric that tells you the most about the quality of a bank. A low cost of funds is just part of it. Almost equally important, and lost with most analysts, is the behavior or performance of a bank’s liability base with movement in interest rates.

Understanding Letters of Credit For Commercial Transactions

Using Letter Of Credit For Commercial Loans

In order to serve their customers and perform their duties, commercial lenders should be familiar with the nature and application of letters of credit.  A letter of credit substitutes one credit (for example the borrower) with another credit (typically a financial institution).  The use of letters of credit to reduce risk is very popular in international trade.  However, community bank commercial lenders should understand the nature and application of letters of cred