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Posts tagged with "Loans"

12/19/2019

Interest rates and rate floors: survive and thrive in 2020

Last year, when rates were rising, Deluxe warned that banks should learn from the 2008 financial crisis that rate cuts are not always predictable, and can be devastating to earnings. And at the beginning of this year, when interest rates were fluctuating unpredictably, Deluxe wrote about structural factors placing pressure on banks’ margins. In both…

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11/15/2019

Another drop in interest rates – is the end nigh?

Around Halloween, perhaps to scare all of the bankers out there, the Federal Reserve dropped rates again, this time by 25 basis points to a range of 1.5% to 1.75%. The widely expected move was the third such drop in as many months. With little wiggle-room remaining this looks like the last drop for a…

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08/19/2019

Rates are falling. Margins Are Shrinking. Why, and What Next?

Last month we wrote about an upcoming cut in interest rates. At the time, we wrote about what financial institutions—especially smaller institutions—should expect. A couple of days later the Federal Reserve announced the first target Fed Funds rate cut in a decade. So now we have some clarity—what can we learn? Managing rates is a…

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07/30/2019

Interest rates, market instability, and what it all means

“Turbulent” is probably the safest way to describe the interest rate landscape for financial institutions in 2019. Opinions about upcoming rate movements have taken a rollercoaster ride over the past several months. This is based on comments from Federal Reserve Chairman Jerome Powell, and the Federal Open Market Committee meeting again this week. We will…

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01/30/2019

Should you be doing something with reference rates?

Just a few short years ago, banking experts encouraged community banks to tie variable rate loans to LIBOR. They said the switch would help smaller banks compete with big banks, while reducing their basis risk, operational overhead, and more. Now with LIBOR facing its probable demise in 2021, many of these same experts are encouraging…

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08/29/2018

Move over LIBOR. SOFR is gaining momentum.

Although the Federal Reserve Bank of New York has been publishing the Secured Overnight Financing Rate (SOFR) since April 3, 2018, SOFR’s popularity seems to be gaining momentum as of late. On August 15, 2018 a headline in Bloomberg read, “New U.S. Overnight Rate Moves Out of LIBOR’s Shadow.” The article outlined major debt issues…

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03/13/2018

Lending Signals: Powerful Tools to Find and Target Consumers for Loans

Last week, I fired up an app on my phone and while using it, a message popped up. Nordstrom was having a sale on Ted Baker suits, I was intrigued … and they knew I would be because they know what I like. This is the new norm for businesses today, data is changing the…

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