The Banker Next Door

Episode 249: What is going on with data-centers?

This episode examines the current debate raging over data centers. This topic is at the crossroads of commercial real estate, big tech, AI, environmental issues, and energy requirements. Data-centers have become big business as big tech needs a massive amount of data to drive the development of AI. These data-centers have gotten massive and require a lot of electricity and water. While there is push back against building data-centers in certain areas, big tech is getting creative in signing deals with energy companies to reopen nuclear power plants and build new ones. Links to multiple articles are included below.
Link: Data-center development boom prompts big questions from residents, lawmakers - The Business Journals
Link: Google Backs New Nuclear Plants to Power AI - WSJ
Link: Three Mile Island’s Nuclear Plant to Reopen, Help Power Microsoft’s AI Centers - WSJ
Link: Amazon Joins Big Tech’s Foray Into Nuclear Power - WSJ

BND: Strategy Room 10-18-2024

The Banker Next Door (BND) weekly live stream show. Strategy Room provides financial news, commentary, top stories in the business world, economic indicators, and all things banking for the week.

Episode 248: Is a CRE concentration a bad thing?

This episode examines an article from Bank Director titled “Capitalizing on disruption: California’s entrepreneurial Five Star Bancorp.” We ask the question is a concentration in commercial real estate (CRE) a bad thing? Five Star Bancorp has a niche in financing manufactured housing. This niche makes up 86% of their loan portfolio and resulted in a value of 682% of its risk-based capital, which is way above the regulatory guidance of 300%. However, the bank’s performance is phenomenal! They have been able to show investors, regulators, and customers that this niche is a strategic advantage, not a major concern. A link to the article is included below.    
Link: Capitalizing on Disruption: California’s Entrepreneurial Five Star Bancorp | Bank Director

Episode 247: M&A update for 3Q 2024 and bank merger review

This episode examines several articles from S&P Global (subscription required). First, we go through an update on 3Q 2024 M&A activity. How are bank deals trending? What is the aggregate deal value looking like? How does the current market compare to the last four years? Second, we look at a recently announced merger between ACNB and Traditions Bancorp in Pennsylvania. We look at the merger process as the deal goes from letter of intent to competitive bid, to initial offer, through further negotiations, and then reaches culmination. In addition, we consider the third parties involved in the transaction, which include lawyers and investment bankers.  

Episode 246: Should you be concerned about your bank board's performance?

This episode examines an article from Bank Director titled “Addressing poor performance in the boardroom.” What should your bank do if you have a board member that is not performing? What tools are available? Should your bank consider performance evaluations, age limits, and term limits? What is the impact of having the same person hold the role of CEO and Chairman on the board? To have a high performing bank, you need a high performing board. A link to the article is included below.
Link: Addressing Poor Performance in the Boardroom | Bank Director

Episode 245: What does a successful core conversion look like?

This episode examines an article from ICBA titled “Helpful tips for streamlining the core conversion process.” What should you know about the ins and outs of going through a core conversion? The article goes through five critical stages. 1) make the decision to convert, 2) calculate conversion costs, 3) have the right internal conversations, 4) evaluate providers, and 5) listen to peers. A core conversion is one of the toughest and most difficult things any banker can go through in their career. A link to the article is included below.
Link: Helpful Tips for Streamlining the Core Conversion Process (independentbanker.org)

Episode 244: Fed pivot could spur more bond restructuring!

This episode examines a recent S&P Global article (subscription required) titled “Fed’s pivot to lower rates could spur more bond restructuring.” The topic of unrealized losses in bank bond portfolios has been a big issue since the banking crisis in early 2023. Now that the Fed has embarked on a rate reduction cycle, what impact will this have on banks’ existing investment portfolio?  

BND: Strategy Room 10-12-2024

The Banker Next Door (BND) weekly live stream show. Strategy Room provides financial news, commentary, top stories in the business world, economic indicators, and all things banking for the week.

Episode 243: Review of FDIC 2024 Small Business Lending Survey

This episode examines the FDIC 2024 Small Business Lending Survey. We go through the report and cover the key findings. Do small businesses still prefer banks? What impact is technology having? Do customers still value relationships? These are just a couple of the topics covered in the key findings. A link to the report is included below.
Link: FDIC Small Business Lending Survey 2024

Episode 242: Let's talk about Treasury Services!

This episode looks at an article from Bank Director titled “the growing demand for Treasury Services in the financial sector: Economic drivers and implications for deposit growth.” Treasury Services provide a number of key products and functions for banks’ business customers. Having these products and services can be the difference between winning and losses business customers. Treasury Services can be a key part of your deposit gathering strategy. A link to the article is included below.
Link: The Growing Demand for Treasury Services in the Financial Sector: Economic Drivers and Implications for Deposit Growth | Bank Director