Asset/Liability Management

HEAR WHAT THE S&B TEAM HAS TO SAY

Listen in as our analysts discuss an array of topics that may be affecting your institution, including recent market movements and industry-wide commentary. These briefings can serve as educational tools for both boards and management.

Watch the Latest Briefing

March 19, 2019 —This week Jamie Sumner, chief analyst, reviews the consumer price index and the producer price index for February 2019. Both indices continued to show moderated inflation figures and, for the most part, came in below expectations. Additionally, the personal consumption expenditure has trended below the Fed’s target. As for inflation expectations, the 5-year, 5-year forward inflation expectation rate moved up from its low in January 2019 but remained below the highs in 2018. Lastly, the fed fund implied probability has stepped up to a 40.2% probability for a rate cut in January 2020.


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RECENT BRIEFINGS

MARCH 12, 2019

March 12, 2019 —This week Jamie Sumner, chief analyst, reviews the February 2019 Jobs reports, along with the retail sales for January and the FRB of Atlanta’s most recent release of their GDPNow index. While the jobs report showed much lower job creation in February than expected, the unemployment rates fell to 3.8%, and the average hourly earnings continue its +3% growth rate. As for retail sales, it grew 0.2% compared to the -1.6% we saw in December of 2018. Lastly, the Atlanta Fed’s GDPNow index projects a 1Q 2019 GDP growth rate of just 0.2%.


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FEBRUARY 28, 2019

February 28, 2019 —This week Jamie Sumner, chief analyst, the 4Q 2018 GDP Release and six headwinds for 2019. Overall, GDP growth continued its downward trend with a growth rate of 2.6% for the 4Q of 2019. For the full year of 2018 GDP growth was estimated at 2.9%. In terms of headwinds for 2019, the items we are keeping an eye on include the global slowdown, trade wars, Brexit, U.S. debt ceiling, quantitative tightening and the pause in Fed rate hikes.


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FEBRUARY 12, 2019

February 12, 2019 —This week Jamie Sumner, chief analyst, reviews the performance of the Community Bank Benchmark group for the 4Q 2018. Overall, the benchmark’s return on average assets declined by 8 bps. This decline was primarily due to the increase in noninterest expense. Increases in the level of noninterest expense to average asset ratio often occur in the 4Q due to year-end bonuses and other year-end expenses. Net interest margin increased by 1 bp over the past quarter as the yield on earning assets expanded at a slightly faster pace than the cost of funds. Generally, 2018 was a strong year for community banks.


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