Insights

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 […]


Job Description: Business Banker

July 28, 2012 | Uncategorized

I frequently hear lamentations about the gap between the performance expectations of community financial institution (FI) personnel and performance results. A frequent challenge is that performance expectations are not documented in the form of job descriptions. Instead, expectations are often trapped between the ears of the supervisor or senior management. This post is geared toward […]


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 […]


Capital and More of It!

July 20, 2012 | Uncategorized

The regulatory definition of “well capitalized” has not changed post financial crisis. Tier 1 leverage ratio: 5% Tier 1 risk-based ratio: 6% Total risk-based ratio: 10% So where is all of this belly aching about capital requirements coming from? It has come from three places, in my opinion. 1. IMCRs When the financial crisis struck, […]


Mortgage Banking: How profitable should it be?

July 14, 2012 | Uncategorized

I recently spoke to an old friend that is a bank equity research analyst and asked him how his coverage universe was doing with second quarter earnings. He said his “mortgage banks did great”. Meaning that those that specialized in originating and selling or putting residential mortgages on their books had a great quarter due […]


Guest Post: Second Quarter Economic Update by Dorothy Jaworski

July 9, 2012 | Uncategorized

Second Quarter Surprises We received two big surprises at the end of the second quarter — one from Washington and one from an ocean away. On June 28th, the Supreme Court upheld the Affordable Care Act as constitutional, calling penalties on individuals for failing to purchase health insurance a “tax.” This decision sets in motion […]