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…
read article →So, What Should Lenders be Doing NOW? Current Lending Environment The US banking environment seems to have entered a new, more unpredictable phase recently. Economic growth continues to chug along nicely, poised to achieve a 3% plus GDP growth rate on an annual basis for the first time in many years. However, most major US…
read article →Essential Concepts in Pricing Loans Relationship profitability is an important metric within most pricing models. While it is important to understand the profitability impact of individual new loans, it is crucial to understand how the pricing decision on a new credit will impact the profitability of the entire customer relationship. These relationships often include deposit…
read article →The team at LoanPricingPRO® is excited to launch the new Microsoft WPF Desktop Edition. WPF is a mature technology for line of business desktop applications. This new version of LoanPricingPRO® can be installed on any Windows device, including popular tablets like the Microsoft Surface. Existing LoanPricingPRO® users will find the user interface to be very…
read article →Commercial Lending Trends & Strategies – 2nd Quarter, 2018 2018 Small Business Survey Shows Digital Lenders Gaining Ground (article from S&P Global Market Intelligence) Small business borrowers are increasingly looking to digital lenders to meet their financing needs, according to results of an S&P Global Market Intelligence survey. The 2018 survey results suggest that small businesses’…
read article →The Federal Reserve continues to gradually tighten monetary policy and increase the Fed Funds Rate. At the same time, the long end of the curve, while flattening over the last 12-months, has also risen. This has helped increase loan yields, but not nearly to the same magnitude as market yield curves. A while back, we…
read article →With the recent passage of the Tax Cuts and Jobs Act of 2017, now is the appropriate time to review the tax rate assumption in your loan pricing model. It is easy to update this key assumption, but you should also carefully consider the impact of a tax rate change on the other configuration areas…
read article →Commercial lending executives often identify two perceived barriers to implementing state‐of‐the‐art commercial loan pricing systems. Cost ranks as the primary objection followed closely by a lack of familiarity with the software’s benefits. Like many other challenges and barriers that may be encountered, there are effective solutions to overcome your concerns with attaining an appropriate Return…
read article →Andy Morgan, a managing director and principal in Austin Associates’ financial management practice area, authored an article on pricing small business loans that appears in the January/February 2016 edition of Western Banker, published by the Western Independent Bankers. The article explains how loan profitability is calculated within a pricing model and offers guidance for calibrating…
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