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Friday, May 11, 2018 |
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MANAGING DIRECTOR: |
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US Treasury Market |
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| Date | 1 mo | 3 mo | 6 mo | 1 yr | 2 yr | 3 yr | 5 yr | 7 yr | 10 yr | 20 yr | 30 yr |
| 5/04/18 | 1.67 | 1.84 | 2.03 | 2.24 | 2.51 | 2.63 | 2.78 | 2.90 | 2.95 | 3.02 | 3.12 |
| 5/07/18 | 1.69 | 1.86 | 2.05 | 2.25 | 2.49 | 2.64 | 2.78 | 2.90 | 2.95 | 3.02 | 3.12 |
| 5/08/18 | 1.69 | 1.87 | 2.05 | 2.26 | 2.51 | 2.66 | 2.81 | 2.93 | 2.97 | 3.04 | 3.13 |
| 5/09/18 | 1.68 | 1.88 | 2.05 | 2.27 | 2.54 | 2.68 | 2.84 | 2.96 | 3.00 | 3.07 | 3.16 |
| 5/10/18 | 1.69 | 1.90 | 2.05 | 2.27 | 2.54 | 2.69 | 2.83 | 2.94 | 2.97 | 3.04 | 3.12 |
Source: U.S. Department of the Treasury, as of 05/10/18
How Are You Pricing Your Loans?
If you haven’t noticed, your bank is likely making a lot of loans. The big question is, “how are they being priced?” We have received many inquiries asking how certain loans should be priced. Competitive pressures remain high and treasury rates have started ticking even higher, at least on the short end of the curve. Knowing how to price a loan can be as much of an art as it is a science. Knowing what your customer or prospective customer is willing to agree to, or knowing what their other options are, typically seem to drive the pricing decisions we see most often. However, where do you start when it comes to knowing how the market would price a particular loan structure to account for the current curve and risk of the deal?
Our BancPath platform has a couple tools that many customers have been utilizing to stay informed regarding loan pricing. The first is our Loan Builder product that can be found on our website at www.bancpath.com. The first time you use it, you are required to provide your name and bank name, but this is a FREE pricing tool. We have made it very simple to use, because a tool that is too complex won’t get utilized. Loan Builder will provide you information about the profitability of a loan and give you a starting point based on how the broader market might price a certain structure. We are happy to answer questions or walk through how to fully utilize the tool.
Our other resource that the BancPath platform provides is built in to the interest rate risk report. Our current subscribers are provided detailed information about their broader portfolio and how the yield structure of the existing portfolio compares to other banks we manage. This platform also goes into detail about all the loans made in the previous lookback period and compares the pricing by loan structure and loan type to other banks making similar loan structures and types. Below is a sample of the built-in loan reporting we provide to customers utilizing our interest rate risk reporting.
Our reports and applications provide you with additional tools to assist your bank with its loan pricing decisions. Good information typically supports great decisions. We have tools to enhance a banks understanding of the biggest asset class on its balance sheet, loans. We are ready to help your lending staff look at loan pricing in potentially a new and different way. Let us know when you are ready to learn more.
This information is intended for institutional investors only. The material provided in this document/presentation is for informational purposes only and is intended solely for private use. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.
•Not FDIC Insured •No Bank Guarantee •May Lose Value