Balance Sheet Management with Investment Advisory

The Bank:

Taylor Advisors began working with First Savings Bank (Clarksville, IN) in the 1st quarter of 2004.

The Challenge:

First Savings Bank needed assistance in the areas of balance sheet management and investment advisory.

The Solution:

Since the start of the engagement, Taylor Advisors has been providing advice in the areas of capital, liquidity, funding, interest rate risk, investments, deposit and loan pricing. First Savings Bank and its subsidiaries have also been utilizing Taylor Advisors for investment advisory services. Goals were established regarding the credit quality of investments, duration of the portfolio, maximum allocation for various sectors of the fixed income market, and procedures for security execution.

The Outcome:

Since 2004, the bank has transformed itself from a sleepy thrift to a darling on Wall Street more than doubling in size. Through the engagement, Taylor Advisors has helped the bank with capital planning and stress testing, wholesale funding strategies, liquidity optimization, and sustained outperformance. First Savings Bank’s investment portfolio was virtually non-existent in 2004, and since then, Taylor Advisors has constructed the portfolio over time to its current attributes and superior performance.

A Word from the Client:

“We were a small bank with a small amount of investments and a large amount of cash on our balance sheet. Taylor Advisors helped us deploy our excess cash in investments, increase our net interest margin, and balance interest rate risk of our portfolio over a longer duration. As a result, we had a more balanced asset liability structure and we’ve increased earnings substantially.

When we decided to go public, we raised cash capital and Taylor Advisors helped us establish a subsidiary focused on investment strategy in order to deploy those proceeds and capital in an appropriate way. In addition to that, subsequent to our IPO, we acquired another bank and they helped us do due diligence on that acquired investment portfolio, price the portfolio, and reposition that portfolio after the close to meet our investment strategies.” Tony 

 

For details on the performance of Taylor Advisors’ investment advisory clients, please contact us at at sasha@tayloradvisor.com or 502-412-2205.