2017 Community Bank Budget Review

At ProBank Austin, we are always curious at this time of year to find out what’s on the minds of our community bank clients, and in particular, to better understand their plans and goals for the coming year.

As consultants serving clients from around the country, we have a unique window into the thinking of community bankers, as each year we assist our ALCO clients with the preparation of their annual budgets. By confidentially analyzing and comparing these annual financial plans, we are able to provide all community bankers with insight into how their expectations for 2017 compare with that of their peers.

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What Exactly Is Loan Pricing Discipline and Why Does it Matter NOW?

In its simplest form, loan pricing discipline exists when a financial institution implements a system that ensures that loan rates and fees move in concert with movements in related market rates. This system must assure that a variety of objectives are being attained, including that margins are maintained or expanding, desired behaviors are incentivized, and critical performance information is generated. This system must possess at least each of the following functional capabilities

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Jeff Morris gives his profitability perspective in latest FMS Update

Jeff Morris was featured as a panelist in the recent FMS Update article titled, “Perspectives on Profitability – Getting the most out of profitability analysis in community institutions”. Jeff was asked wide-ranging questions on how community banks tackle profitability analysis. To read the full article, please click below. FMS Update

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A Storm of Sorts is Brewing for Community Bankers

A storm of sorts is brewing for community bankers, perhaps not the epic “perfect storm” but one that nevertheless will present some significant challenges in maintaining profitability and margins over the coming months and well into the 2016 – 2017 planning horizon. While we don’t know when the Federal Reserve will actually begin to raise rates, whether they start this October, in December, or in early 2016, it appears that they intend to raise the benchmark overnight rate gradually over the next 24 months, by as much as 300 basis points.

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Pricing Small Loans – Essential Concepts in Loan Pricing

The most significant complaint we hear from bankers regarding in-house and third party pricing models is that they don’t work well on small loans. Bankers get frustrated because no matter what rate assumption they put into their model, the loan never meets the bank’s ROE target levels. In this article, we’ll explain how loan profitability is calculated within a pricing model and how a properly calibrated system allows lenders to be competitive regardless of loan size.

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