Pricing Discipline in a Rising Rate Environment

By: Sharon J. Lorman
Jeffrey P. Marsico
Gregg J. Wagner

Guest: Joel Rosenberg, Managing Director – Client Success and Delivery at PrecisionLender

Podcast Show Notes:

Our This Month In Banking (TMIB) podcast features discussion with colleagues and other industry thought leaders on interesting banking news that happened this month. TMIB will be available on the last Wednesday of every month here, and on Apple and Droid podcast apps for your listening enjoyment. Join us on your commute or at your desk.

Topic: Pricing Discipline in a Rising Rate Environment
What are the greatest benefits of using pricing models and what are the drawbacks? If we believe the 80/20 rule to be true (80% of profits are generated by 20% of customers), does loan pricing discipline incent those making pricing decisions to reduce the profitability of the 20% because they are materially over the profit hurdle? In other words, does disciplined loan pricing reduce the 20% that we need to carry the 80%? And how do deposit strategies fit into pricing discipline?

Does your bank use a loan pricing model? Why not?
Our guest and co-host for this topic is Joel Rosenberg, Managing Director- Client Success and Delivery at PrecisionLender. Joel brings a wealth of knowledge and expertise of the banking industry to PrecisionLender. He gets the title of being an “expert” in loan pricing and profitability because he has over 16 years of experience in it. He received his BS in Economics from Rensselaer Polytechnic Institute and his MBA from Carnegie-Mellon University. He also has a Charter Financial Analysts designation (CFA). He went on to be the Treasurer of the Federal Home Loan Bank of Boston, community banks, and Prudential Financial’s banking subsidiary in Atlanta. In 2000, Joel joined the US Banking Alliance as a Senior Vice President for Consulting. It was there that he started to work with pricing software and the people who would soon form PrecisionLender. In 2014, Joel created PrecisionLender’s satellite office in Atlanta (aka his home office) and began working with bankers all over the country to understand how PrecisionLender works.

About PrecisionLender
PrecisionLender was founded in 2009 and is a leading pricing and profitability platform for banks worldwide. It was founded with one directive: To let computers do what computers do best, so that humans are freed up to do what they do best. In the world of commercial pricing & profitability, that means providing bankers with the right information at the right moment – when they’re having a conversation with a customer about how to structure a deal. Everything in PrecisionLender is designed by starting at that critical human interaction and working backward, putting the focus on the customer, instead of a rate sheet. PrecisionLender has grown rapidly and the Company’s client list now includes banks of all sizes, from those that serve local communities to those with offices around the world.
Earn It: Building Your Bank’s Brand One Relationship At a Time
Zipf’s Law and Your Lenders
Loan Pricing: Must It Be So Complicated?
Why the small-bank deposit gap could widen
How do lenders set interest rates on loans?
The Relationship Pricing Trap

Watch for episode 28 of This Month in Banking to be released on Wednesday, April 25, 2018 and a new episode on the last Wednesday of every month.

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