Publications and Reports

Financial Strategies Group

 

Publications

Reports

REPORT

Receive-Fixed Swaps: Enhance Earnings While Reducing Interest Rate Risk
June 4, 2021 - With short term rates at historic lows, many commercially-oriented institutions have been struggling with earnings on their portfolio of floating rate loans. Some of these institutions had used receive-fixed swaps as an effective hedging tool in past rate cycles, and with the curve steepening year-to-date, asset sensitive institutions have been very active in returning to this strategy. Let’s explore…

Read Now


Reports

REPORT

2021 Piper Sandler Financial Strategies Survey
May 24, 2021 - Once again, we ask our clients to please take three minutes to complete the survey linked in this week's update, which ranges from the economy and interest rates to credit and capital. Your answers will allow us to tailor future Balance Sheet Insights to these observations and interests. Simply put, it will allow us to better meet your needs. We will follow up next week with some high level impressions…

Read Now


Reports

REPORT

Don’t Buy the Inflation Hype
May 14, 2021 - Unprecedented fiscal stimulus, base effects and supply chain disruptions will boost inflation. However, these factors should have a transitory impact on prices. This week we explore everyone’s favorite current topic: inflation and its outlook…

Read Now


Reports

REPORT

Earnings Releases: First Quarter 2021 Trends
May 7, 2021 - Often our advice hinges on optimizing internal metrics, from capital ratios, to the investment portfolio, to funding costs. Turning an outward eye allows management teams to see the forces acting for and against them. As we turn our attention to earnings trends, we take a look at the expected or unexpected results so far on an aggregated basis, and what it means for institutions across the country…

Read Now


Reports

REPORT

Analyzing Fast-Prepay Sales and Losses in the Investment Portfolio
April 30, 2021 - A strategy that has benefitted many institutions is utilizing inflated prices in agency pass-throughs to proactively shed prepayment risk, and utilizing gains in that sector to improve credit, earnings, or liquidity on the wholesale Balance Sheet. Is it too late for this trade? How does one structure the trade? How does an institution think about a loss trade? Let’s explore…

Read Now


Reports

REPORT

Have Interest Rates Topped Out? (and What About the Deficit?)
April 22, 2021 - The interest rate sell-off we have experienced since late last year is significant, but is it possible it may be running out of steam? We explore this possibility, as well as the effects that the deficit may have on the economy…

Read Now


Reports

REPORT

Rising Rates Drive MBS Value
April 15, 2021 - This week, we revisit the investment portfolio, once again hearing from our Bond Market Focus on a sector that can provide some value to financial institutions at a volatile time. Following a difficult first quarter for bonds, we outline a number of options in the mortgage market for investors to consider…

Read Now


Reports

REPORT

In-Focus Look at Non-Agency CMBS
April 9, 2021 - This week we take a dive into one of the values we see in fixed income markets: non-agency CMBS. Outside of a relative value conversation, we will provide a high-level overview of the structure and collateral backing these deals, as well as pertinent investor considerations…

Read Now


Reports

REPORT

Making the Bullish Case for Bonds
April 1, 2021 - The explosion in liquidity on financial institution balance sheets has made many institutions asset-sensitive. Yet management teams worry about deploying that cash, or extending duration, even when their interest rate risk positions says they should, because of potential rising rates. Expectations of stronger economic growth and rising inflation have pushed long term rates significantly higher, but there are emerging reasons why the bond selloff may not continue...

Read Now


Reports

REPORT

Reacting to Unrealized Losses
March 23, 2021 - Rate volatility often leads banks to re-open discussions around accounting designations for their securities. GAAP equity measures, chiefly common equity and tangible book value, include unrealized gains/losses on AFS debt securities. With rates higher in the last few weeks than in the last year, companies are noticing negative marks on their bonds for the first time in recent memory.

Read Now


Reports

REPORT

Steeper Curve Strategies: Curve Extensions Back in Vogue
March 19, 2021 - The fact that bank valuations are often at their highest when investment portfolio marks are at their lowest offers limited solace to managers watching their AFS gains erode by the day. This week we begin a multi-part series entitled “Steeper Curve Strategies” to take advantage of moves in the curve. We kick off by sharing some thoughts from Justin Hoogendorn, CFA’s “Bond Market Focus”, a weekly publication with investment ideas and current topics in the fixed income market.

Read Now


Reports

REPORT

The Real Reason Rates Are Surging
March 11, 2021 - Dimitri Delis, PhD, our team’s senior econometric strategist, shares his thoughts on the economic forces driving interest rates.

Read Now


Reports

REPORT

Preparing Your Balance Sheet for 2021 - Key Takeaways
February 26, 2021 - Thank you to everyone that tuned into our Webinar this week. Scott Hildenbrand took us through a variety of topics of interest to community banking institutions. This week, we want to share some key highlights of the topics discussed...

Read Now


Reports

REPORT

Waiting on Opportunities in the Municipal Bond Market Curve
February 11, 2021 - This week, we’ve asked our in-house experts on municipals, Peter Stettler and Al Cappelli, to provide an overview of the municipal market. Soon, we will revisit the sector, for some specific strategies that financial institutions can take advantage of. Let’s dive right in...

Read Now


Reports

REPORT

The Cash Stays in the Picture
January 29, 2021 - In an era of major issues in the banking space: a global pandemic, political turbulence, record low rates, and record government spending, the most common problem facing banks may feel unusual-too much cash on hand. The result of this cash build means lower earnings, but when yield opportunities are sparse, what can institutions do? Let's dig through some examples of current value in the market, tailored for a variety of institutions' needs...

Read Now


Reports

REPORT

Tactical Adjustments into a Steeper Yield Curve
January 22, 2021 - Two weeks ago we explored some of the financial metrics that we consider relevant to community banking institutions, and saw increased volatility in 2020. Given the recent changes to the shape of the yield curve, this week we dive into different tactics to address those changes…

Read Now


Reports

REPORT

Brokered Deposit Reform Finalized
January 14, 2021 - On December 15th a recent Federal Deposit Insurance Corporation (FDIC) proposed rule became final relating to brokered deposits. At the highest level, the rule shrinks the scope of what counts as a brokered deposit making more deposits qualify as non-brokered. Let’s dig in...

Read Now


Reports

REPORT

What a Difference a Year Makes
January 8, 2021 - We kick off 2021 by analyzing performance across various financial markets that most affect community banks, and the path those metrics took over the past 365 days...

Read Now


Reports

REPORT

Key Themes and Trends Heading Into 2021
December 10, 2020 - As everyone’s minds turn to wrapping up 2020, we’d like to share some of the recent topics that have dominated our conversations across a variety of different areas, and some context for how to consider them…

Read Now


Reports

REPORT

Balance Sheet Insights
December 3, 2020

Read Now


Reports

PODCAST

A Conversation with FHLBank Atlanta
November 20, 2020 - Scott Hildenbrand recently joined Scott Brennan, director of sales at FHLBank Atlanta for a discussion of the tactics that will leave institutions better prepared or further exposed in light of the potential upcoming rate changes. Click through to this week’s report for access to the podcast episode...

Listen Now


Reports

REPORT

Balance Sheet Impacts of Recent News
November 13, 2020 - The two topics dominating headlines in 2020 – the COVID-19 pandemic and the 2020 U.S. presidential election – both received important news this week. The news resulted in volatility in capital markets and warrants some analysis on the potential implications for bank balance sheets.

Read Now


Reports

REPORT

Balance Sheet Insights
November 6, 2020

Read Now


Reports

REPORT

Earnings Releases: Third Quarter Trends
October 30, 2020 - As we turn our attention to third quarter earnings trends, we continue to see unusual activity as a result of COVID-19 and its after-effects on the economy. In this edition, we look at the expected or unexpected results so far, and what it means for banks across the country.

Read Now


Reports

REPORT

Update on Credit Union Hedging
October 23, 2020 - As banks’ expertise has grown in the ways to deploy derivatives in their hedging toolkit, many credit unions, until recently, were left behind. In this edition we explore some interesting developments.

Read Now


Reports

REPORT

LIBOR Transition for Derivatives
October 16, 2020

Read Now


Reports

REPORT

Asset-Swapping Municipal Bonds
October 9, 2020

Read Now


Webinar

WEBINAR

Balance Sheet Strategies vs. Tactics: Preparing for Q4 and 2021
September 23, 2020 - Understanding the difference between strategies and tactics is key to efficiently and productively managing your balance sheet as you prepare for Q4 2020 and 2021. We focus on liquidity, rising rate risk to TCE, defensive and offensive tactics on and off the balance sheet, and how to approach strategy development. Email us for access to the replay.

Request replay


Reports

REPORT

Banks left with pockets full of cash and few places to go
October 2, 2020

Read Now


Reports

REPORT

Asset-Side Hedging Supports Growth
September 25, 2020

Read Now


Reports

REPORT

Bank Strategy Insights: September 2020
September 17, 2020

Read Now


Reports

REPORT

Protecting Tangible Book Value Against Rising Rates… Again
September 11, 2020

Read Now


Reports

REPORT

Guest Contributor Series: Four Ironies Resulting from COVID-19
September 3, 2020

Read Now


Reports

REPORT

Bank Strategy Insights: August 2020
August 27, 2020

Read Now


Reports

REPORT

Bank Strategy Insights: August 2020
August 20, 2020

Read Now


Reports

REPORT

Guest Contributor Series: Optimizing the Capital Structure
August 14, 2020

Read Now


Reports

REPORT

The Pandemic Economy: Second Quarter Strategies
August 6, 2020

Read Now


Reports

REPORT

The Pandemic Economy: Second Quarter Trends
July 31, 2020

Read Now


Reports

REPORT

Investment Focus: Freddie Mac Multifamily Small Balance Securities (“FRESB”)
July 24, 2020

Read Now


Reports

REPORT

Case Study: When Cash is Not King
July 17, 2020

Read Now


Reports

REPORT

A Campaign for the Gain
July 9, 2020

Read Now


Reports

REPORT

Preparing for Expectation to Become Reality
June 26, 2020

Read Now


Reports

REPORT

A Discussion of Community Bank Subordinated Debt
June 19, 2020

Read Now


Reports

REPORT

A Survey to Enhance the Conversation
June 11, 2020

Read Now