Peeling the layers of today’s pricing

I began this blog series asking the question “How can banks offer such low rates?” Exploring the relationship of pricing in an environment where we have a normalized. I outlined a simplistic view of loan pricing as:  + Interest Income + Non-Interest Income Cost of Funds Non-Interest Expense Risk...read more

Is your Risk Ratings making the grade?

I am at the Risk Management Association’s annual conference in DC and I feel like I am back to where my banking career began.  One of the key topics here is how important the Risk Rating Grade is and what impact that right or wrong Risk Rating Grade can have on the bank. It is amazing to me how a...read more

Auto Lending Naysayers Are Neglecting Key Facts - Part 2

This is the second of a two part blog about the state of auto lending in the U.S.  In the U.S, auto lending has been surging.   This is the second of a two part blog regarding this subject.  The previous blog looked at origination trends as well as noting the attention that auto lending has received...read more

Model Risk Governance – It’s not just for the big banks!

When the OCC put forth the supervisory guidance on model risk governance the big focus in the industry was around the larger financial institutions that had created their own risk models.  The overall intent to make sure that the larger financial institutions were properly managing the risk they...read more

Auto Lending Naysayers Are Neglecting Key Facts

This is the first of a two part blog about the state of auto lending in the U.S. In 2014, auto lending has received increased media attention.  Unlike other forms of consumer lending, auto lending has been booming.  This lending has powered spending and has been an important driver of the economic...read more

Keep service levels up by improving revenue streams

As consumers, we expect service, don’t we? When service or convenience lessens or is taken away from us altogether, we struggle to comprehend it. As a recent example, I went to the pharmacy the other day and learned that I couldn’t pick up my prescription since the pharmacists were out to lunch....read more

What your lenders want in a lending process – but may not say to you.

A recent industry survey was published that called out the number one reason that lenders were dissatisfied or willing to go to another financial institution (and take their book of business with them) was not compensation.  While, compensation is often thought of as the number one driver for this...read more

Organic portfolio growth starts with evaluating loan loss performance

There are two core fundamentals of evaluating loan loss performance to consider when generating organic portfolio growth through the setting of customer lending limits.  Neither of which can be discussed without first considering what defines a “customer.” Definition of a customer The approach used...read more

How to determine the overall net yield on assets

So we know we need to determine the overall net yield on assets required to cover the cost of funds and the operating expenses but how?  In the movie Moneyball, the Oakland A’s develop a strategy to win 99 games by scoring 814 runs and only allowing 645 runs by the opposition.  In order to generate...read more

How Financial Institutions can assess the overall conditions for generating the net yield on the assets

I am going to take some liberties here.  Nowhere in the movie Moneyball does Peter Brand tell us how he got to the magic number of winning 99 games to get to the playoffs.  My assumption is that given the way that he evaluates the Oakland A’s, he also evaluations the other teams in their conference. ...read more