The Federal Home Loan Bank System: Lender of Next-to-Last Resort
“The FDIC recently has observed instances of liquidity stress at a small number of insured banks.” So opened the Summer 2017 FDIC Supervisory Insights issue. And so went your exams. At a recent banking conference an industry consultant said, matter of factly, that in times of stress your Federal Home Loan Bank (FHLB) borrowing capacity […]
Hot Rates: Swipe Left
Retail customers are not growing at community financial institutions. According to my firm’s profitability outsourcing service, branches have fewer retail checking accounts than two years ago. Deposit gains were made through growth in average balances per account. If you’re a commercial bank, you may be fine if this trend is happening at your institution. So […]
Guest Post: Financial Markets and Economic Update by Dorothy Jaworski
The Long Winter I’m writing this in April, during the winter that is taking forever to end. We braved the cold of December and January, were teased with some warm days in February, and then found ourselves in March, with its four nor’easters, cursing the snow each week and shivering in the cold. We have […]
Consumer Lending: Should Banks Do It?
We’re running out of assets. When I first read Standards Needed for Safe, Small Installment Loans from Banks, Credit Unions by the Pew Charitable Trusts that encouraged financial institutions to get back into small ticket consumer lending, I thought “what are they nuts!” Consumer loans for those banks that utilize my firm’s outsourced profitability […]
A Time of Reckoning for Your Bank’s Core Deposits?
Bye-bye municipal deposits. So worries New Jersey Banker’s Association CEO John McWeeney since state-owned bank advocate Phil Murphy was elected governor. The state’s municipal deposits approximate $20 billion, $13 billion of which are in community banks. A significant source of liquidity. I got news for you John. We might lose municipal deposits regardless. And we […]
Bankers and Strategic Bets. A Slow Embrace.
There are a lot of crazy ideas out there in banking causing us to think… “remember when such and such ridiculous idea was the new craze?” And we would laugh, continue to drink our cocktail, and lament that another financial institution threw in the towel to merge with a bigger brother. That’s what I thought […]
A Bank Consultant Is a Road Warrior: So Here Are My 3 Driving Pet Peeves!
To the followers that spend a lot of time in your car, I’m with you! Most times it can be a relaxing time to listen to podcasts, sports, or relaxing music. Sometimes, though, it’s blow-your-top nerve wracking! In the below video blog, I highlight my Top Three Road Warrior Pet Peeves! Not a banking post. […]
For Banks, Acquire or Be Acquired Is a Hobson’s Choice
Bank Director recently held their Acquire or Be Acquired (AOBA) conference in the Arizona desert. It is a well run, well attended conference. When not there, which I wasn’t this year, I follow the hashtag on Twitter. But the title of the conference bugs me. It’s a Hobson’s Choice. According to Wikipedia, which is how […]
The State of Banking
Where are we and where have we been? Trends are telling. In 2013, there were 6,812 FDIC-insured financial institutions. At September 30, 2017 there were 5,737, a 16% decline. There were 166 mergers, and four new charters in the first three quarters of 2017. As an industry, the trend is down. Ski slope down. What […]
Guest Post: Managing to the Margin by Mike Higgins Jr.
It’s that time of year when every CFO is trying to “predict” what is going to happen with rates as they construct their budgets for the new year. Rather than trying to predict rate changes in the budgeting process, consider a slightly different approach that manages to the margin. In a nutshell, budget rates flat. […]