Thursday, October 26, 2017
101 Mall Blvd, Monroeville, PA.
REVIEW AND REGISTER
9:00am: Current Environment
• Post-Election Impacts on the Banking Industry
• Business Cycle Trends & Impact on Pennsylvania Banks
• Interest Rate Forecast – Fed is likely to be more aggressive in 2018
• Liquidity Management – Liquidity is shrinking on bank balance sheets as rates increase
10:30am: Refreshment Break
10:45am: Managing Bank Risk
• Interest Rate Risk – A greater regulatory concern in 2017
• Modeling IRR – Validating assumptions is key concern of examiners.
1:00pm: Managing Assets in the current Environment
• Funding growth for 2018 – Liquidity Management
• Investment Options on a Flattening Yield Curve
• Residential lending: Refinancing & Purchase
• Managing concentration in commercial lending
Managing Liabilities in the Current Environment
• FHLB Strategies: Time to Lengthen Liability Duration
• FHLB Strategies for Matched Funding
• Deposit Strategies: Moving customers from large savings pools to CDs
• Challenges Facing ALCO In 2018
This seminar will focus on the critical issues bank ALCOs will face in 2018. Asset/liability management is a challenge in 2017 primarily due to changes in the yield curve based on both economic variables and political factors. The current post-election changes for the most part were initially positive, but the question facing bankers and forecasters is: How permanent is the optimism towards economic growth, and is the new interest rate environment just a short-term reaction or will the yield curve’s steepen or flatten through 2018? Short-term interest rates increased at the March and June 2017 Fed Open Market Committee meetings, and if the growth of the economy remains moderate, and inflation meets the Fed expectations we will likely see at least one more Fed Funds increase in 2017.
Economic data has been relatively weak in the 1st half of 2017, but forecasters are more optimistic for the 3rd and 4th quarters. Consumer spending is rising along with consumer confidence. The housing market is strengthening along with the labor market. The unemployment rate is 4.3% and wages are beginning to rise. All of this positive news bodes well for bank lending, but should be a caution sign for liquidity management.
The seminar will present regulator concerns with commercial lending, liquidity management, and interest risk management. We will explore regulatory guidelines on interest rate risk policy and procedures with a focus on modeling. The seminar will conclude with asset and liability decision making in 2018. If loan demand increases to be solid, investments will be less of a priority, but investment portfolio strategies are always an essential element of ALM. We will also look at recent trends in loan portfolio management, both residential mortgage lending and commercial portfolio management. Liability management has been relatively straightforward over the last eight years, but will likely become a challenge in 2018. Liability management will focus on deposits strategies to cope with a rising rate environment. We will also explore wholesale strategies involving the FHLB advances and brokered CDs.
WHO SHOULD ATTEND
CEOs, CFOs, COOs, Investment Managers, ALCO Committee Members, Directors, Lenders, Risk Mangers and all involved in ALM.
CONTINUING EDUCATION CREDIT
Attendees of this course are eligible for up to 5 hours of CPE. PACB is an approved provider of continuing education by the PA State Board of Accountancy.
ABOUT THE PRESENTER
Dr. James Clarke is the Principal of Clarke Consulting, a Villanova, Pennsylvania firm specializing in ALCO issues and strategic planning for community banks. Jim has lectured on asset/liability management at the Stonier National School of Banking sponsored by ABA, the Southwest Graduate School of Banking, the New England School of Financial Studies and Connecticut School of Banking. He conducts ALM seminars for many state associations, and for Risk Management Association (RMA) and Financial Managers Society (FMS). Jim also conducts board education programs on ALM for a number of state associations. In 2014 through 2017, Jim spoke at the FMS Forum, the Connecticut, Maine and Pennsylvania Community Bankers conventions and number of director conferences. Dr. Clarke is on the Board of a community bank, and is a Director of an investment company. Jim is also on the Editorial Board of the RMA Journal.
A block of rooms has been reserved at the DoubleTree, 101 Mall Blvd, Monroeville, PA. Please contact the hotel directly at 412-373-7300 for reservations. Please mention the PA Association of Community Bankers to secure the group rate.