Articles @ Focus Forum
Browse all of the articles published in the newsletter.
- Capital Planning: Information and Education
- Regulatory scrutiny has shifted directly to capital this year, and every community bank must produce a capital plan that is thorough and realistic. Regulators are specifically looking at minimum capital targets. They do not want to see regulatory minimums. They want to see minimums set that are in line with the bank's unique risk profile.
- Story of a Failed Bank Postscript
- Over the last two months, we have been delving into Georgian Bank, which failed in September of 2009. The postscript of this story is about board responsibility and oversight. This time period has led to heightened risk awareness and increased focus on the role of the board.
- High Performance Crib Notes
- At a time like this, there are many concerns about moving forward. Just a reminder: What will make community banks profitable post-financial crisis is the exact thing that will sustain performance post-crisis.
- Market Letter: Double Dip?
- The thought of a double-dip recession continues to fascinate the media. The housing numbers and some slowing of manufacturing numbers have stoked the fire. Do these numbers in isolation send a message of impending recession?
- Powers of the Three
- Monitoring interest rate fluctuations, spreads and the yield curve requires careful review of current economic conditions, policies, and market movement. It is not a simple task by any means, but it involves nearly every touch point at the bank and must be carefully reviewed.
- How Would We Analyze Your Bank?
- Every year, the analysts at m.rae resources analyze close to a thousand community banks. This is done for speeches we make, classes we teach, and one-on-one meetings with bank leadership teams. We believe that every community bank’s balance sheet and income statement sends specific messages on the uniqueness of the risk/return tradeoff at each community bank. The story is told through the following observations.
- Story of a Failed Bank Part 2
- Last month, we wrote about the sad story of Georgian Bank, which failed in September of 2009. The point of the story was to highlight that not only did the board and management team fail to recognize the significant risks the bank was taking until it was too late, but so did the regulators.
- Market Letter: What is the Real Employment?
- June’s unemployment release was a disappointment to the markets. The European mess and the fears of a double-dip recession led to high hopes for improvement in employment. The low private sector employment with the Census jobs making up a big segment of non-farm payrolls was not expected. On the bright side, the unemployment rate dropped. The Dow reacted by sliding below 10,000, and bonds rallied.
- Capital Planning: Compliant or Strategic?
- The financial crisis of 2008/2009 has focused community banking on capital. As regulators continue to pound on community banks to have a capital plan, institutions are still grappling with the new expectations and requirements. This is the perfect opportunity to go beyond compliance and create strategic thought and discussion.
- Market Letter: Dr. Ed Questions the April GDP Release and Lays Blame for the Financial Crisis
- The April release of first quarter GDP showed a healthy increase of 3.2%. Our chief economist, Dr. Ed Seifried, questioned the number in his quarterly Economic Survival Kit webcast. Over time, Dr. Ed says there is a strong correlation between GDP and the ISM manufacturing number, which grew to a very expansionary 60.4 reading. Based on the ISM release, Dr. Ed estimates that GDP should be reading over 5%.