Thoughts on the Effects of Silicon Valley Bank and Related Events
Overview: The speed and magnitude of Fed rate hikes has been unprecedented, and we have emphasized that if continued it would likely force something to…
Read More What the MIP Cut Means to MBS Investors
The Federal Housing Administration (FHA) recently announced a decrease to the annual premium charged to borrowers with FHA-backed loans. The reduction goes into effect for…
Read More Municipal Finances Persevere During Recessions
As we move through 2023, the possibility of a recession is at the forefront of most investors’ minds. Fortunately, most municipalities are in a good…
Read More ALM in 2023: Revisiting Economic Value of Equity (EVE)
Bank balance sheets were adversely affected in multiple ways by the speed and magnitude of the rising rate environment in 2022. Most noticeable was the…
Read More What Can History Tell Us About Balance Sheet and Margin Management in 2023 for Credit Unions?
The global pandemic set into motion a series of historically unprecedented economic policies. Massive amounts of liquidity and stimulus from policymakers enabled a fast recovery,…
Read More What Can History Tell Us About Balance Sheet and Margin Management in 2023?
The global pandemic set into motion a series of historically unprecedented economic policies. Massive amounts of liquidity and stimulus from policymakers enabled a fast recovery,…
Read More Under Pressure: Deposit Betas in 2023
In science class we were taught that pressure is the application of force against an object. As bankers, we think about pressure as it relates…
Read More Municipal Credit Update: Inflation Effects on Municipal Finances
In early 2020, municipal credit concerns were abundant and tax revenue plunged due to pandemic shutdowns. Since then, average state and local tax revenue has…
Read More Don’t Fully Bet on One Rate Outcome
As a young aspiring bank examiner in 2009, I first learned about interest rate risk management during a period of zero interest rate policy, which…
Read More Will the Federal Reserve Sell MBS?
This question is likely to garner different responses, depending on who you ask, and a plethora of caveats. It is a tough call for the…
Read More Riding Out the Storm: Focus on Interest Rate Risk Management
“The relative calm in financial markets recently has caused a significant degree of complacency. The truth of the matter is that we are probably in…
Read More The Importance of Asset Pricing and ALM Strategy for Credit Unions
As if navigating the 2008 Housing Crisis and 2020 Global Pandemic weren’t enough, credit unions now face the most feared economic monster of all –…
Read More The Importance of Asset Pricing and ALM Strategy for Banks
As if navigating the 2008 Housing Crisis and 2020 Global Pandemic weren’t enough, banks now face the most feared economic monster of all – inflation.…
Read More Interest Rate Risk in 2022: Assumption Junction
In March this year, the Federal Reserve lifted interest rates for the first time since 2018. Today, both the bond market and FOMC have set…
Read More Deposit Betas: Looking into the Future
Over the last two years, the banking industry has experienced massive deposit growth, which flooded banks with excess liquidity. Most of the deposits flowed in…
Read More 2022 Key MBS Themes and the Case for Specified Pools
The mortgage market is already off to a volatile start in 2022 with Treasury yields soaring, spreads widening, and mortgage rates breaching 4%. The Federal…
Read More Public Pension Update
Municipal bond investors finally have some good news regarding public pension plans after worrying about growing unfunded pension liabilities for many years. The Pew Charitable…
Read More The Fed’s Balancing Act for 2022
On the first trading day of 2022 the US 10yr Treasury Note yield jumped above 1.60%, then traded up another 10bps in the two subsequent…
Read More Is Your Investment Portfolio Properly Anchored
Many financial institutions saw record investment growth in 2020/21 as large stimulus payments bloated balance sheets and far outpaced loan demand. This surge in deposit…
Read More Under Pressure – Net Interest Margins
A long time ago there was an adage in the banking industry known as the “3-6-3 rule,” meaning the banker would gather deposits at three…
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Oklahoma City, OK 73118
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