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Banc Investment Daily

Tightening Your Underwriting - Selectively

June 23, 2017 -  Bankers and other financial professionals know people are just plain weird with their money. Look no further than a report from BMO Wealth Management around the subject of estate planning. It found a whopping 72% of adults said they did not know any details of their parents' wills or estate distribution plans. In addition to this, 40% of parents surveyed said they have never discussed their estate intentions with their children. As if that weren't enough to think about, consider 25% of married adults said only their spouse knows the location of their will or powers of attorney....

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Recent Issues

June 22, 2017  -  Smart Mobile Onboarding

The first smartphone showed up in 1994 and was known as Simon. It was upgraded in 2000 when Ericsson released the first flip phone style called the R380. Then, along came the Palm Treo (2002), Blackberry (2003), the category killer iPhone (2007) and the Samsung Galaxy (2010). Fast forward to today where the latest research shows 77% of people in the US now own a smartphone. Mobile banking too has become standard procedure in all corners of America, yet signing up for a new account on smartphones is still uncommon. According to a 2017 Javelin survey of the...

June 21, 2017  -  Assisting Customers While Assisting Your Bank

A Wells Fargo/Gallup poll of US adults finds 32% are providing assistance to an adult child, parent or both. Of this group, 75% were doing so to assist an adult child, 19% were helping a parent and 6% were assisting both. In addition, the survey found 46% of respondents overall, who have one or more grown children, said they were providing them with financial support. This could provide an opportunity for your community bank so we thought you might want to know. Another thing to know this morning relates to wire transfer fraud. On this front, the FBI warns...

June 20, 2017  -  Community Bank Traits Investors Are Seeking

An interesting research paper published by the International Journal of Multidisciplinary Research looked at the impact of different personalities of managers on employee performance. It found there are six main types of managers that people work for: respected professional (task driven, honest, reliable at 29%; caring mentor (cheerful, generous, flexible at 26%); win-at-any-cost (tough, controlling, ruthless at 19%); taskmaster (get the job done but without much concern for employees at 10%); likeable loser (nice person but not competent at 9%); and the glad-hander (friendlier than win-at-any-cost but similarly, considered dishonest, unreliable, clueless and uncaring). To make a big difference at...

June 19, 2017  -  The Psychology Of Branch Importance

An Australian study of US corporate executives finds about 20% has psychopathic traits. These traits include such things as: exploiting, manipulating or violating the rights of others; lacking concern, regret or remorse about other people's distress; behaving irresponsibly and showing disregard for normal social behavior; being unable to control their anger; lacking guilt; not learning from mistakes; and blaming others for problems in their lives. These managers typically create chaos around them, can be toxic to other employees, and will engage in unethical and even illegal practices. The good news is that given the data, that means around...

June 16, 2017  -  Learning About IoT - An Update & Literacy Check

A study by the Organization for Economic Cooperation & Development looked at the financial literacy of teenagers. It found that while a good 56% of them have a bank account, 67% did not have the skills to manage it or interpret a bank statement. Further, only 12% scored out with a high financial literacy. Kids are good at many things (technology for instance), but clearly there is more work to be done on the financial side so bankers can get a quality future crop of new employees down the road. Well, at least we have a starting benchmark...

June 15, 2017  -  Taking Vacation And Preparing For CECL

Research finds about 91% of full time equivalent employees get paid vacation. That is great because everyone needs to wind down and relax now and again. That said, a survey by Glassdoor finds the average worker only takes about 54% of the vacation days they are offered each year. Reasons for this vary, but include a fear of getting too far behind on work (34%), believing no one else at the company can do the work while they are gone (30%), being completely dedicated to the company (22%) and feeling they can never be disconnected (21%). Vacation time...

June 14, 2017  -  Risk Tolerance/Capacity of Third Party Providers

We found an interesting survey from financial technology and investment analytics firm FinMason. It looked at the risk tolerance of investor equity portfolios. What is particularly interesting here is that a whopping 43% of investors said they did not understand the term risk tolerance. Even worse perhaps, 68% of millennials did not know their risk tolerance. This means many of your customers probably do not understand the impact of a market crash on them either. To help, we point out that risk tolerance is all about understanding someone's psychological threshold, while risk capacity is all about how much the person...

June 13, 2017  -  Driving Changes in Risk Management

Back in the day, people sometimes referred to older cars with such terms as clunker, rattletrap, junker, bucket of bolts, or old jalopy. These days, we find it interesting that an IHS study finds the average length of time people own their car has reached a record 79.3 months or almost 7Ys. That makes some sense when you consider how tight people got with their money following the crisis and the fact that the average price of a new car is now $34,342 according to Kelley Blue Book. When you drive around in a car that is that old, you...

June 12, 2017  -  Taxation and Representation for Community Banks

If you have wondered why politics is so crazy these days, consider an ICBA report that finds there are about 30 lobbyists for every 1 legislator. To visualize this, take a look out the door of your office or stretch out from your desk that is 30 people deep. Then, think about how you would deal with those people when they file in 1 by 1, asking you to do something to help them. Perhaps, all of these voices jockeying for time and providing singularly focused input could be a key reason Congress seems to move so slowly. Let's hope...

June 09, 2017  -  Disruption & Evolution Continue

A CNBC survey of Disruptor 50 founders and CEOs finds just over 56% of respondents said 11% to 25% of America's workforce will be replaced by machines or software in the next 10Ys. Also of interest perhaps, some 68% of the visionaries who responded said artificial intelligence is critically or very important to their businesses. As the survey points out, community bankers too should be thinking constantly about the future and in particular - where risks and opportunity may lie ahead for you. Almost 50Ys ago, machines began their takeover of banking when ATMs came on the scene. Today, new changes...

More Back Issues

About the Banc Investment Daily

The Banc Investment Daily has been published in various forms for over fifteen years. This daily newsletter reaches an audience of over 25,000 people employed by financial institutions and regulatory bodies and has become a staple in the morning reading routine for bank executives nationwide.

The BID is a compilation of news, facts and opinions focused on issues vital to financial institutions. In addition to the newsletter, BID content is syndicated to financial institutions and trade associations throughout the country and has appeared in major financial publications such as the American Banker. Issues often contain:

  • Important bank-related news
  • Tracking of sales and merger multiples
  • Economic commentary and Federal Reserve actions
  • Recaps of the fixed income and bank loan markets
  • Discussion of regulatory and compliance issues
  • Ideas on performance and risk management

The History of the Banc Investment Daily

About 20Ys ago, we had the idea to create a daily publication designed specifically for community bankers. While it has been refined over the years, it has stood the test of time. In fact, each week we add a few hundred new bankers or regulators to the distribution list of the Banc Investment Daily (BID) and readership is over 55,000. Given that growth, every few years we stop to take a moment and explain the intent of each specific area within this publication in an effort to help community bankers. We do this to help make sure all of our readers can effectively utilize everything the BID is designed to deliver each and every morning.

First and foremost, the BID is 100% focused on community bank issues and designed to provide thought-provoking information. It is always presented in an easy-to-read single page format, with a bit of humor sprinkled in here and there. It has never been longer than 1 page in length, so every single space within that page is maximized every day.

The creative process is unique, as it begins around 4:00am PT and ends promptly at 5:00am PT for delivery to your inbox each morning. That provides time to create, edit and refine things and ensures it gets out to everyone just in time for that 1st or 2nd cup of morning coffee no matter your time zone.

Topics come from a variety of sources, including bankers themselves (one of our favorite sources—although once again we go on record saying we have not put listening devices in anyone‹s boardroom); regulators (from conferences, face-to-face meetings, video conferences, etc. — but always anonymous); industry experts (these can run the gamut from banking attorneys, accounting firms, technology and others—as long as they have a specialty in community banking) and from our own research.

The BID basically breaks down into two major sections. The first is the left side of the page (which we internally refer to as the "Top Left"), and it usually ends at the top of the next column. The rest of the publication is identified with headers describing what you are about to read.

The Top Left is basically our "idea of the day." The primary goal of it is to keep things fresh by putting a new spin on an old idea, getting you thinking, alerting you to upcoming regulatory issues, spreading the word or educating. Creating this section takes about 2 hours every single day and that includes tying it back to a random (and seemingly unrelated) picture as a critical part of the process. In this section, sometimes we start with a nascent idea (oh yea, we also try to sprinkle in at least one big word to keep everyone‹s vocabulary sharp) and then find a random picture that seems to work with it. At other times we challenge ourselves by creating an idea after selecting a picture.

Believe it or not, the rest of the publication takes just as long as writing the Top Left. To make sure bankers stay on top of things, we focus on issues that have impacted market yields or major economic data points that could affect your business, loan or deposit pricing for example.

The News section is all about highlighting important news and events that could impact community bankers. To do this part, we scour hundreds of sources, weed out only the best few and make sure you know about them so you can stay on top of things quickly and easily.

Finally, the rate box comes into play. This grid contains a list of Treasury yields along with their monthly and YTD change. This is provided so you can keep track of your mark to market and better manage your loan/deposit pricing for various maturities. Also in the grid we include LIBOR swap rates. This is included since it is the de-facto funding level for large banks worldwide. It gives you a way to quickly check your deposit pricing for various maturity structures or to price loans. Next you will find the expected federal funds (FF) rates. This comes from the futures markets each day and it gives you an idea of where FF are actively trading so you can project where they may be heading in the future.

Also in the grid at the bottom running across, we give daily updates on the current overnight FF rate, the FF target rate, the discount rate, prime, the unemployment rate and the price of oil.

In closing, we are proud to say we have not missed a single business day of the past 4,000+ creating and distributing the BID and we thank you for your readership.

The Banc Investment Daily is a targeted newsletter specifically created for independent financial institutions.
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