Steady Growth, Safe Portfolio Management, and Lasting Client Relationships
Buch, Englisch, 192 Seiten, Format (B × H): 162 mm x 236 mm, Gewicht: 509 g
ISBN: 978-1-57660-369-7
Verlag: Wiley
A guide for community banks to rebuild and strengthen their business
With Wall Street reeling and big banks under pressure, community banks have an opportunity to strengthen their position in the marketplace. By reconnecting with local businesses and consumers, increasing core deposits, and carefully managing their investments and balance sheets, community banks can attract underserved clients from larger competitors.
With Community Banking Strategies, author Vincent Boberski???a financial professional who has spent years working with senior management and the boards of directors at local banks???skillfully reveals how community banks can compete against bigger institutions in the wake of the most significant financial crisis since the 1930s.
Beginning with a novel analysis of community banks and their relationship to both national and global financial competitors, he insightfully places the meltdown of the financial markets and the resulting Great Recession into a historical context. With a bold look into the future, Boberski outlines the risks and trends that will shape both the industry and the economy as a whole. He sets clear strategic goals that will allow community bank managers, directors, and investors to profit from a broad localization of American finance.
Chapter by chapter, Boberski offers practical advice on many of the most important issues in this area, including portfolio management, balance sheet management, and dealing with interest rate and credit cycles. Along the way, Boberski also offers in-depth insights on establishing and encouraging the lasting client relationships that produce the most essential piece of the banking business: core deposits, the heart of any good local bank.
Engaging and informative, Community Banking Strategies will help you:
- Become familiar with the strategies, products, and tactics that will enable community banks to create opportunities out of market dislocations and effectively manage risk
- Capture consistently profitable growth at the expense of regional and national competitors
- Transform newfound market dynamics into customer relationships that touch both sides of the balance sheet
- And much more
Written in a straightforward and accessible style, this reliable resource is a must-read for community bank executives, directors, investors, and the brokers who work with them. If you want to gain a better understanding of the strategies that consistently lead to success in this field, this book is the best place to start.
Autoren/Hrsg.
Weitere Infos & Material
Preface xi
Acknowledgments xiii
1 A New Era for Community Banking 1
A Five-Forces Analysis of the Competitive Position of Community Banks 3
Rivalry Within the Industry and New (Really Returning) Entrants 7
The Bargaining Power of Suppliers and Customers 9
The Threat of New Products 12
Has the Community Banking Model Changed? 13
Winners and Losers 14
The Revolution of 2008 17
The Nationalization of Fannie, Freddie, and Poof! No More Private Securitization 17
The Loss of Wall Street Balance Sheets: Who Moved My Primary Dealer? 19
The Collapse of the Consumer: An Escalade for Every Driveway 20
The Collapse of the Housing Market: Jingle Mail, Jingle Mail, Jingle All the Way 20
A Look Forward 21
Consolidation and Less Competition for Community Banks from Larger Institutions 22
Signifi cantly Improved Liability Pricing 22
More Big Failures 23
A Recession Deeper Than the Early 1980s 23
Housing Prices Fail to Rise 24
The Securitization Engine Fails to Restart 24
The Treasury Effectively Becomes an Activist Shareholder 24
Crowding Out by the Treasury 25
A Prolonged Period of Stagfl ation Driven by Skyrocketing Energy Costs and Permanently Higher Tax Rates 26
Where, Incidentally, Is the Next Bubble Going to Be If Not in Goods Prices? 27
2 Historical Credit Crises and What’s Different Now 29
The Derivatives Mess of 1994 30
The Russian and LTCM Crisis of 1998 31
The Commercial Real Estate and S&L Crisis of 1988 to 1992 33
How Bad Can Things Get? 34
3 Valuations and Lessons from the Equity Markets 37
What Drives Bank Valuations? 38
What Investors Look for in Different Parts of the Credit Cycle 40
Practical Implications 41
4 Liabilities and Capital 45
Liabilities and Franchise Value 50
Advice from a Flat Curve Environment (2007) 52
What Works 53
5 Managing the Balance Sheet Through Different Interest-Rate Cycles 59
What Brokers Will Ask You to Do and When You Should Do Them 63
Wholesale Leverage 63
Deleveraging, Including Loan Sales 66
Bond-Portfolio Restructuring 68
Pre-Refunding 72
Summary 72
6 Investments and the Wholesale Balance Sheet 73
The Cost of Liquidity 75
The Bond Portfolio and A/L Management 76
The Portfolio as an Earnings Driver 77
Appropriate Products for Bank Investment Portfolios 78
Agency MBS and CMOs 80
Ginnie Mae MBS and CMOs 87
SBA Floating- and Fixed-Rate Pools 91
Callable and Bullet Agency Debentures 93
Bank-Qualifi ed Municipals 100
Portfolio Structures and Processes That Work 101
7 What Banks Should Ask of Their Brokers 105
Products and Services Your Broker Should Provide 107
Different Brokerage Models 110
Questions Your Broker Should Know the Answer to (or Should at Least Ask) 111
Summary 113
8 Tax Effi ciency: As Important as Operational Effi ciency 115
When Munis Make Sense 117
When to Put BOLI on the Balance Sheet 120
Case Study: Munis Versus BOLI 121
BOLI Specifi cs: The Case for Separate Account Versus General Account 124
Summary 129
9 Derivatives as a Way to Manage Balance Sheet, Earnings, and Business Risk 131
Macro, One-Way, and Two-Way (or Client) Hedging Examples 134
Macro Hedge 137
One-Way Hedging 143
Two-Way or Client Hedging 150
Summary 156
A Word on Structured Repo 156
Appendix: Caps, Floors, and Swap Valuations 157
Afterword 159
Appendix 161
Performance Measurement Through Peer Analysis and Benchmarking 161
Synthetic Duration Matching 163
Synthetic Historical Volatility Matching 165
SD of Portfolio Returns ÷ SD of Index Return 165
Sharpe Ratio, Treynor Measure, Scaled Returns, and Scenario Analysis 166
About the Author 171
Index 173
