Capital and More of It!
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 […]
Mortgage Banking: How profitable should it be?
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 […]
Guest Post: Second Quarter Economic Update by Dorothy Jaworski
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 […]
How stable are your deposits?
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 […]
Data Driven Strategy
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 […]
Grow or Die. Really?
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 […]
Sweat the big stuff: Interest Rate Risk
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. […]
Banking School: The ivory tower could be yours.
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 […]
Risk Adjusted Return on Capital (RAROC) for Financial Institutions
How do you measure the profitability of lines of business, products, or customers? The simplest form is in dollars. But does that measure the profits against the investment required to […]
Is branch profitability out the window?
About 10 years ago my firm analyzed the hundreds of branches in our profitability database to determine exactly what is “critical mass”. We sorted by pre-tax profit contribution as a […]