Rising interest rates

​Julie,
If you have a loan pricing system like PrecisionLender you can offer borrowers fixed rate options that create the same estimated value (return on equity) as the variable rate alternatives.  We prefer to consistently offer on all proposals both fixed and variable options with pricing differential based upon the current yield curve.  This way the bank keeps the value of offers consistent while the borrower gets the psychological advantage of selecting what they believe is most advantageous to them.  Price so that you are indifferent between their choice and let the borrowers pick the structure to maximize value.

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Neil Stanley
President of Community Banking
TS Banking Group
Treynor, Iowa
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Original Message:
Sent: 04-17-2018 21:25
From: Julie Koenig
Subject: Rising interest rates

What are your bank strategies for customers who are on a variable rate loan and with rates rising come back and want a fixed rate loan because competition will offer it?

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Julie Koenig
EVP/CFO
First New Mexico Bank, Las Cruces
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