Case Studies

Large Loans: Book or Participate?

A client was recently presented with a large lending opportunity. The borrower requested pricing and terms on a $6mm loan. Additionally, the borrower guaranteed that they would keep $500k of deposits with the bank. Like many community banks, growing loans was a key priority for our client and they were eager to win this deal.

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Profitability Implications of an Introductory Interest Only Term

A LoanPricingPRO client recently asked for assistance in analyzing a commercial real estate loan with an introductory interest only period. Specifically, their borrower was looking for a fixed rate, $2.7mm loan with interest only payments for the first 2 years and then principal and interest payments for another 5 years based on a 25 year amortization schedule. Our client wanted to know if the pricing needed to be different compared to the same loan without the interest only period. Let’s take a closer look.

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Capital Requirements for Unfunded Construction Loans Under Basel III

A medium-sized client of Austin Associates recently asked an interesting question regarding pricing for a large construction loan they were bidding on for a middle market customer in the northeast.

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Risk Adjusted Returns

A study in calculating the lowest possible rate capable of achieving an organization’s targeted rate of Risk Adjusted return, and simultaneously meet both the expectations of the loan customers and shareholders.

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Funds Transfer Pricing

A special look at state of the art cost of funding assumptions, coterminous maturity matched funds transfer pricing and multiple rate tables including internal cost of funding.

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