A bank earns its money from interest on loans to customers, like a commercial real estate loan and interest on investments. Your board is happy when you can earn high interest rates. They are sad when you earn low interest rates. Today, interest rates are low. Will tomorrow be higher or lower or stay the same? There is another choice available to you and your bank. It is kind of like a loan to a customer. And kind of like an investment in a muni. It’s kind of like both. It has the credit rating of a HUGE company, a loan you would love to make in your market. And its interest returns are not subject to current tax. About 500 banks invested over $ 4 billion in this last year alone. And over 3,700 banks hold over $155 billion in this asset on their balance sheet today. What is it? Well I’m not going to tell you in this video. Not now.
You see, there are a few hurdles you have to overcome to get this asset on your balance sheet. It’s not quite as easy as buying a muni bond, but not as complicated as making a commercial real estate loan. And it’s not available to all banks. It depends on your loan demand forecast, current capital, and a few other things. I can help you determine if it makes sense for your bank.
But here is the biggest hurdle. You have to contact Kelly Coughlin…not by email, not by text, or twitter or LinkedIn or Facebook…but the old fashioned way….the phone…Call today at 612-232-6640.
Kelly Coughlin is a CPA and CEO of BankBosun and has been helping banks manage risk and discover reward for nearly 30 years. Ok, if you don’t like the phone, you can send him an email.
Kelly Coughlin, CPA, is the CEO of BankBosun. He is the program host of the syndicated audio podcast BankBosun.com, helping bank C-Suite Officers navigate risk and discover reward in the banking ecosystem. Kelly specializes in helping community bank manage three Rs: Risk, Revenue and Regulatory challenges.
Contact Kelly Coughlin at: kellycoughlin[at]bankbosun[dot]com or 646-494-[five-four-one-two]
Sign up for free podcasts at BankBosun.com.