Asset/Liability Management


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.

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September 18, 2018 —This week Jamie Sumner, chief analyst, reviews a number of economic releases including the Small Business Optimism Index (SBO), Producer Price Index, Consumer Price Index, Inflation Expectations, Inventories, Retail Sales and the recent GDPNow projections. Overall, the economic releases were positive, and the SBO pointed to continued optimism among the respondents. Inflation seems to be contained while retail sales continued to grow greater than 6% on a year over year basis. As such, the GDPNow projection remains above 4% for the 3Q GDP growth.

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September 11, 2018

September 11, 2018 —This week Jamie Sumner, chief analyst, reviews Employment Situation report for August. With 201,000 jobs created, nicely distributed types of jobs, a modest increase in wages, and narrowing of the spread between the U3 and U6 rates of unemployment, this release can be viewed as positive. In a separate release, the BLS reported an increase in labor productivity for the 2Q while the unit labor cost declined. With the array of positive economic news, the GDPnow is currently projecting GDP growth at 4.4% for the 3rd quarter.

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August 21, 2018

August 21, 2018 —This week Jamie Sumner, chief analyst, reviews the 2018 Q2 performance of the S&B community bank benchmark. Overall, the benchmark has shown an improvement in ROAA while there has been just a slight increase in the average S&B Risk score. Net interest margin increased quarter over quarter fueled by a higher yield on earning assets. However, the increase in the cost of funds has tempered the growth in net interest margin. Furthermore, the trajectory of the change in the cost of funds has sped up, and we anticipate it to speed up more over the next several quarters as banks feel the pressure to increase deposit rates.

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July 31, 2018

July 31, 2018 —This week Jamie Sumner, chief analyst, covers the Advance Estimate of the 2Q 2018 GDP which came in at a robust 4.1%. The actual results were 30 basis points higher than the GDPNow estimate of 3.8% on July 26th. As for inflation, Core PCE was just under expectations of 2% coming in at a 1.9% growth over the past 12 months. Wage inflation continued it crawl upward with a growth rate of 2.66% but remains subdued compared to the 3.5% average before the great recession, as measured by the Employment Cost Index. Lastly, the market continues to point to two more rate hikes this year.

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July 24, 2018

July 17, 2018 —This week Jamie Sumner, chief analyst, reviews a few inflation indicators which point to continued growth in inflation, which had been expected. These results support the Fed’s plan to raise rates two more times this year. As such, the market probabilities are weighted toward two more increases. Furthermore, our expectation for higher deposit rates seems to be coming to fruition as we continue to see CD specials of 2-3+% and we are beginning to see cash-type deposit specials too. We have even seen a savings account at 5%!

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July 17, 2018

July 24, 2018 —This week Jamie Sumner, chief analyst, reviews the top CD specials across the U.S. Currently, the clustering of the top rates falls in the 60-month term with the highest rate at 3.5%. Jamie also reviews special “Add-ons” to CDs. Lastly, Jamie compares the special rates to wholesale funds and reviews the forward curve for the next three years.

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July 10, 2018

July 10, 2018 —This week Jamie Sumner, chief analyst, reviews the 3rd estimate of the 1Q GDP which was reduced down to 2.0% from 2.02%. Additionally, Jamie reviews the June employment situation report which showed modest job growth and wage growth along with an influx of individuals into the labor force. This influx of workers caused the unemployment rate to increase to 4%, up 0.2%. Lastly, Jamie comments on the recent GDPNow forecast.

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