TKG Perspectives

Bankers: What is Your “Well-Capitalized?”

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 the FDIC and the Alabama […]


Bankers: Let’s Be Necessary

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 opt for the sideline in […]


The Next Three Significant Risk Factors

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 into our heads by regulators.  […]


Lessons from Management Reviews

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 formal enforcement actions or through […]


Implementing Management Reporting in Community Banks

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 that enables management to: Assess […]


The Impact of Low Interest Rates on Net Interest Margin and Performance

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 on credit and/or interest rate […]


Business Checking: Not Profitable?

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 too common in the current […]


The Current State of Banking, Relevance and Technology

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 quality remains a concern, and […]


What’s the “Process” of “Process Management”?

One of the adages that became popular over the last decade is “Manage the process; Measure the results”.  Executives have found that, like most such “easy to roll off the tongue” clichés, the reality of “managing the process” is much more difficult than it sounds.  In fact, managing the results, at least from the executive […]


Strategic Management of the IT Function

Most bankers would intuitively agree that information technology (IT) is a strategic function in the banking industry.  It is increasingly important to interact with customers over the web and via mobile applications.  The amount of technology needed to support even traditional banking functions like branching and lending is growing continuously.  The chart to the right […]