December 2016

Pricing Strategies And Product Introduction

Bank Fee Line Pricing Tactics

Introducing a new product is always a head scratcher for bankers. How to price and how to create a promotional incentive are just two of the many difficult questions that bankers have to solve. For example, do you price a new service with annual fees or monthly fees? Do you introduce the product and offer a money back guarantee so there is no risk to try the new product or do you offer it free on a trial basis?

 

Case Study

 

What Community Bank Borrowers Say About Loan Hedging

Borrowers on Loan Hedging

In a number of previous articles, we discussed important factors that community bankers should consider in analyzing hedging programs.  We also listed the pros and cons of various hedge alternatives, and finally, we gave examples of some specific application of loan hedges currently used by community banks.  In this post, we conclude our hedge series by highlighting borrowers’ common objections to using hedges and how community bankers that we work with deal with and overcome these objections. 

 

Complexity

 

4 Major Shifts in 2017 That Banks Are Positioning For

Bank Positioning For 2017

In the past six weeks, the banking landscape has radically changed. Spreads, volume forecasts and the economics of banking have shifted. The outlook for loans credit, deposits, and fee lines are now all different than they were prior to the Trump Administration and banks that are not thinking through the next four years will find themselves being reactive. Most importantly, the mindset and catalysts within public psychology have changed which has caused new thinking within bank marketing.

Loan Hedging Considerations for Community Banks

Hedging Loan Interest Rate Risk

In a previous blog, we described what factors community bank managers might want to consider in analyzing a loan hedging program for their specific needs.  In that blog, we listed the pros and cons of using a hedge to control risk and increase profitability.  We then wrote a follow-on article that analyzed the various instruments and strategies common in the bank hedging market to include swaps and other interest rate derivative instruments.  We provided an in-depth

What Banks Need To Know About The Velocity of Risk

Velocity of Risk in Enterprise Risk Management

Banks that are looking to enhance their risk management practices should consider incorporating the concept of the velocity of risk into their enterprise-wide risk management practices. The topic is germane as with the rise of the Trump Administration and the growth of social media, a company or industry can wake up one morning and find out that they are in the cross hairs of a Tweet torrent.

Managing Interest Rate Risk In Loans

Interest Rate Risk Management at Banks

The Federal Reserve held off in raising rates at its November meeting, preferring to assess the results of the presidential election and allow time to make further progress on their twin goals of full employment and price stability.  Since that November meeting, the results of the presidential elections have convinced markets of future expected inflationary pressures resulting from fiscal stimulus in the form of tax cuts and increased government spending.  Furthermor

Why Your Bank Should Be Advertising on Mobile

Bank Mobile Advertising

If you are like most banks, you probably don’t have big dollars allocated in your budget for advertising and of those dollars, probably less is focused on digital and probably nothing invested in mobile. That would be a mistake as the performance of bank mobile advertising has dramatically improved over the last several years. “Mobile is eating the world” is a common refrain and many banks are pursuing a mobile first strategy where all other delivery pipes like call centers, branches, ATMs and online applications support mobile banking.

Why Banks Are Relooking At Their 2017 Deposit Strategy (Part I)

Bank Deposit Management

Here at CenterState Bank, we specialize in Florida.  Now, Florida has a lot of things going for it, but it has at least two major things going against it. One is an unspoken rule that if you own a bar or restaurant with an open-air patio, you have to have some guy impersonating Jimmy Buffett on a stool wearing a flowered shirt singing for tips. These guys are everywhere, and if you live here, it gets old. The other major drawback is that hunting for the highest rate on your deposits is a national pastime only eclipsed by baseball and trying to stay out of sinkholes.