Since 2010, investment bankers have been predicting that the pace of merger activity in the banking industry would significantly increase and accelerate. While these predictions may have been wishful thinking, we currently see signs that many banks are, at a minimum, talking and considering their strategic alternatives. As a result,…
The Kafafian Group would like to wish all of our clients, business associates, and friends a Happy Holiday season and much future success in the coming New Year. We are grateful for your business and the relationships we have mutually developed over so many years. It’s hard to believe that…
TKG has had the distinct impression that the bank regulatory community is not pleased with certain limitations and exemptions from Section 171 of the Dodd-Frank Act, the section that covers leverage and risk-based capital requirements. Why do we think this? In a Consent Order dated August 20, 2014, issued by…
Why did Willie Sutton, famous bank robber from the 1920’s to 1950’s, rob banks? “Because that’s where the money is.” By the way, Sutton denied the quote, but we can’t deny it’s true. Financial Institutions (“FI”) remain the place to go for money, but not for long. Why do FIs…
The past five years have been filled with significant risk factors that have affected virtually every financial institution of all types, size, structure, and geography. We are well aware of the eight OCC risk categories: credit, interest rate, liquidity, price, strategic, reputation, IT/operational, and compliance. They have all been drilled…
Over the past three years, TKG has been engaged by a significant number of banks to provide an assessment of the capabilities of management to operate the bank in a safe and sound manner. Most, but not all, of these assessments have been required by regulatory requirements, expressed either in…
The pressure is on for Community Banks to raise their skill in the development, delivery, analysis, and utilization of information. Think about what Enterprise Risk Management, Capital Planning, Compliance Management, Credit Oversight and/or any of the other myriad of recent initiatives have in common? They require thoughtful, well-organized, relevant information…
The current and protracted low interest rate environment has played havoc on net interest margins and resulting bank performance and profitability. Banks have historically made money by borrowing short and lending long in a normal rate environment and with a normal sloping yield curve, and/or otherwise being compensated for taking…
Does it make sense for business bankers to seek core deposits from their customers? This question was posed to me by a senior lender at a Northeast bank that had a declining loan to deposit ratio which was putting pressure on the bank’s net interest margin. This story is all…
The past five years have been the most trying times in most current bankers’ careers. The economy continues to struggle through a long downturn. Interest rates remain at historical lows, depressing margins and crushing the profitability of the liability side of the balance sheet, as well as branch networks. Credit…