Because of the option to add or remove deposit balances over time, deposit management is one of the more complicated endeavors in banking. Lending, by comparison, is largely a one dimensional supply vs. demand problem. Deposits are complicated. Consider some very common multivariate problems - add a three month CD option to your deposit line up, and the duration of your money market accounts can noticeably get reduced. Change a fee or minimum balance requirement, and duration materially shifts.
According to the latest FDIC data, loan credit quality improved in the third quarter with many categories such as construction and multi-family hitting record lows. In general, non-current loans-to-total loans hit 1.20%, the lowest since the second quarter of 2006. Offsetting credit quality, loan growth is slowing which is starting to cause problems for many banks as growth solves many problems. In this article, we look at the current state of commercial credit and look at the how banks might position themselves to take advantage of the changes.
At a recent conference, we got in a public argument over how banks waste time and money building their brand. Don’t get us wrong, we believe every bank should make an investment in their brand but our point is that building a brand is difficult and expensive. Before you invest money in a new logo, an advertising campaign or work up a new “brand message,” there are four simple things that all banks need to do to create 70%+ of the value of their brand.
Step One – Focus on Your 1,000 True Fans
Now that Thanksgiving is behind us we can turn our attention to the holidays. That means our annual gift guide for bankers. We do this as we not only have a good time putting this together, but it is one of the pieces of content that we produce that drives heavy traffic. At this time, everyone is looking for gift ideas and these are our best ideas all tested (except for the floating cockroach). We also highlight this gift guide not only for your use but for your bank to use with your customers.
In one of our blogs last week we discussed why a flattening yield curve has real consequences for the performance of a community bank’s loan portfolio. The market expects a continued flattening of the yield curve through 2018 and community banks must develop loan products that perform well in such an interest rate environment. In today’s blog, we review the pressures that community banks will face in this competitive commercial loan environment and how banks can position their commercial loan offering to outperform their competition.
Far and away the most profitable asset for a bank is its people. It stands to reason that optimizing your most important asset is critical to increasing efficiency and becoming a top performing bank.
November 20th, 2017 We each have that one company we’ve hired that is absolutely fantastic. It may be your landscaper, favorite restaurant, retail store, airline, parts supplier or marketing firm.
Most banks pay little attention to their online reviews. This is a problem as reputational risk is often monetized, either positively or negatively on the back of online reviews. Either banks don’t cultivate reviews or worse, they never think of them. Not only do reviews influence potential new customers more than any other single source but they can have a material impact on search engine rankings. In a recent Brightlocal survey, 94% of respondents said they look up online reviews before choosing a business.
This is Part III in our series of articles exploring the concept and implementation of a “trusted advisor” approach to banking. In Part I (HERE), we compared the profitability of a transactional banking model versus a relationship driven model and questioned why so many banks want to be relationship focused given the higher cost and execution risk.
There has been much discussion lately about the flattening of the yield curve. Some economists and analysts believe that the yield curve could invert in 2018. Much of this discussion has been focused on trading strategies and the relationship between the shape of the yield curve and the strength of the economy. However, the flattening of the yield curve has real consequences for community banks and their loan portfolios. If the yield curve does continue to flatten in 2018, the dominant loan structure for community banks will be challenged.
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