Essential Concepts in Pricing Loans

What’s the best way to ensure you stay in control of your bank’s profitability? The answer: Proper loan and relationship pricing discipline. We analyzed our LoanPricingPRO® customer base to determine if using a pricing model has helped to maintain an edge on the industry.

To do this, we looked at 3 metrics over a one-year period from 2017 to 2018. These included Loan Yields, Cost of Funding, and the resulting Yield/Cost Spread. LoanPricingPRO® clients were compared to all commercial and savings banks with Total Assets between $300 Million and $5 Billion.

 

LoanPricingPRO® institutions beat their peers by 10 basis points!
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