TKG Perspectives

Welcome to TKG Perspectives, a quarterly publication from The Kafafian Group.
Each edition offers timely insights, expert commentary, and strategic thinking on the issues that matter most to banks and financial institutions. From evolving regulations to performance trends and innovation opportunities, TKG Perspectives is designed to inform, challenge, and support leaders navigating today’s financial landscape.

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  • Unlocking Data Analytics: The Critical Role of a Profitability Measurement System for 2024 and Beyond

    Community banks continue to navigate challenges and opportunities in identifying efficiencies in a post-COVID environment, managing the increasing impact of AI on bank products and services, adapting to a continually evolving regulatory landscape, and addressing margin compression influenced by fiscal and monetary policy. Implementing a bank profitability system that measures…

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  • Failure is OK

    On Friday, April 26, 2024, the Pennsylvania Department of Banking and Securities (the “PA Department”) took possession of Republic First Bancorp, Inc. unit Republic First Bank (“Republic”) due to Republic’s “unsafe and unsound condition.” The PA Department appointed the Federal Deposit Insurance Corp. (“FDIC”) as receiver, who then struck an…

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  • Insights from the American Bankers’ Association Conference for Community Bankers

    San Antonio sun, buzzing conversations, and a room full of bankers hungry for boardroom transformation. That’s where I found myself, tackling a topic close to my heart, Turning the Board from Tactical to Strategic, at the ABA’s Conference for Community Bankers (ABA CCB). The session’s turnout surprised even me. The…

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  • Navigating the Shifting Tides: Unraveling the Dynamics of Higher for Longer Rates and Profitability Trends in Community Banks

    In the dynamic world of community banking, bank leaders find themselves at the helm of an industry experiencing pronounced shifts in profitability trends. As we await comprehensive Q4 peer data, Q3 data and anecdotal evidence points to intriguing developments that demand the attention of financial institution leadership. Trend 1: The…

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  • Banking On: The Inflection Points

    Using the Rearview Mirror to Drive Forward The shot heard ‘round the world is a reference to the homerun hit by Bobby Thomson of the Brooklyn Dodgers to win the 1951 National League pennant. That’s the triumphant version of a widely used phrase. In banking, the shot heard ‘round the…

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  • Update: How has the Fed’s battle against inflation impacted bank product profitability?

    At the end of the 3rd quarter of 2022, we provided analysis of how banks were impacted by the Fed increasing the Fed Funds rate from 25 basis points to 3.25% from Q1 2022 through Q3 2022. The Fed continued to increase rates through Q2 2023 and it looks like…

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  • Build a Moat Around Your Balance Sheet

    U.S. economic growth slowed in the first quarter to 1.1% after having notched 2.6% growth in the fourth quarter of 2022. Many economists expect the economy to slow even more as the year progresses, predicting a recession in the second half. There are a number of factors that could lead…

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  • How has the Fed’s battle against inflation impacted bank profitability?

    The Federal Reserve began its battle against inflation with a 25 basis point warning shot in the first quarter of 2022. By year-end the Fed increased rates six more times, ending the year at 4.5%. As of the end of Q3 2022, these increases have helped to improve community bank…

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  • Strategic Alignment: Accountabilities

    Accountability gets a bad rap. You can see people wince and hear the hushed tones when speaking about it. It’s not comfortable being “accountable” for a metric, a deadline, or a result. To us, it is evidence of the financial institution’s culture or the quality of leadership. So often accountability…

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  • And Just Like That…

    Since March of 2020, the near zero interest rate environment was a constant for bankers. For nearly twelve quarters running, the Federal Open Market Committee (“FOMC”) kept the target federal funds rate unchanged. And just like that, there has been a 25 basis point rate hike in Q1 2022, a…

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