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….
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…
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…
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.”…
A tweep of mine, Ken Mueller (@kmueller62), posted an interesting bio-post titled “Random Stuff You Should Know About Me” on his Inkling Media blog. I saw his reference to it on Twitter, I read it, I enjoyed it, so I decided to copy it… with Ken’s blessing of course. A…
I am attending the Financial Managers’ Society (FMS) Forum in Las Vegas this week. The Forum is chock full of education opportunities for banking finance professionals. One session caught my attention. The tandem speakers taught the audience about going “long”, or at least longer, in their investment portfolio and minimizing…
You recently read an excellent book on strategy. Your financial institution faces challenges… economy is crawling at road-kill pace, customers struggling to remain current on loans, regulators breathing hot and heavy down your neck. You need to assemble the team, assess your situation, chart your course. So you schedule a…
Grow or die. Acquire or be acquired. Build it or kill it. And so go the banking platitudes. Now, perhaps those that invoke these phrases have strategies that compel them to grow. Shareholder value, so the logic goes, is created if I grow my balance sheet 10% per year and…
I have been thinking about interest rate increases for some time now. The Fed lowered the Fed Funds rate to a target of 0 – 25 bps in December 2008. Since that time we all knew that the next move would be up, and pundits have been predicting the “when”…
I am sitting at Gate 124 in Orlando waiting for my ride home from a long journey. Prior to Orlando, it was Dallas. In Dallas, I taught bank profitability and strategic planning at the ABA School of Bank Marketing Management. The school is a two year program designed to transform…