Publications : Archives

In 2019, banks nationally were 87% dependent on net interest income. With the lions’ share of earnings coming from Net Interest Margin (NIM), implementing a disciplined approach around NIM management to capitalize on opportunities and avoid mistakes will make the difference between underperforming and outperforming institutions. As Financial institutions across the nation cope with market…

At the onset of COVID-19, financial institutions were hyper-focused on liquidity and ensuring ample available funding to meet potential demands from depositors and borrowers.  However, over the course of the past three months, we have seen unprecedented growth in deposits.  This deposit resurgence has primarily come in the form of non-maturity deposits, reminiscent of the…

In July 2019, we published an eBrief detailing the expected sunset of LIBOR and our recommendations for managing the transition. The FFIEC recently issued a Joint Statement on Managing the LIBOR Transition, highlighting regulatory and risk management expectations for institutions with exposure to LIBOR. Overall, institutions can expect increased supervisory focus on evaluating preparedness for…

As Financial institutions across the nation cope with market and economic challenges created by COVID-19, anticipating next steps to manage balance sheet “risks” AND improve or protect profitability is becoming increasingly more difficult. In Part 1 of our miniseries, we discussed the importance of robust liquidity stress testing, a comprehensive contingency funding plan,  and anticipating potential…

As Financial institutions across the nation cope with market and economic challenges created by COVID-19, anticipating next steps to manage balance sheet “risks” AND improve or protect profitability is becoming increasingly more difficult. In Part 1 of our miniseries, we discussed the importance of robust stress testing, a comprehensive contingency funding plan,  and anticipating potential…

In Part 1 of 4 of our miniseries, we covered specific challenges relating to liquidity during the Coronavirus pandemic.  We discussed the importance of monitoring changes in the loan and deposit portfolios, a comprehensive contingency funding plan, and the importance of a robust stress test.  We now turn our attention to capital, which serves as…

As Financial institutions across the nation cope with market and economic challenges impacted by COVID-19, anticipating next steps to managing balance sheet “risks” AND to improving or protecting profitability will become increasingly difficult. Not to mention heighten regulatory exams will most likely hit key ALCO areas.  Capital, Asset Quality, Management, Earnings, Liquidity and Sensitivity could…

On September 17, 2019, the Regulatory Agencies adopted a final rule implementing the Community Bank Leverage Ratio (CBLR) as part of the Economic Growth, Regulatory Relief, and Consumer Protection Act.  This final rule provides the opportunity for certain community banking organizations to adopt new, voluntary, capital framework that is effective 1/1/2020, with the first reporting…

Market Update Bankers track many key interest rates, but surely mortgage rates get a lot of attention, as they can have a significant impact on a community bank’s earnings and profitability.  Residential mortgage loans typically represent a meaningful earning asset for many financial institutions. Additionally, an average bank investment portfolio often holds an allocation of…

Amidst the persistent rally in U.S. Treasury prices and the problematic inversion in the yield curve, loan pricing is beginning to take center stage, over deposits, as a key concern for financial institutions.  Residential mortgage refinancing volumes are accelerating and commercial loan pay-offs and refinancing may pose a distinct risk to loan portfolios and earning…