A survival guide to minimizing interest rate risk

first_imgCEOs and CFOs are shifting focus from credit risk to interest rate risk – with good reason. Though viewpoints differ as to when this period of historically low rates will end, its inevitable end will put funding cost pressure on financial institutions. Averaging the forecasts of Federal Open Market Committee members suggests federal funds rates could increase to 1.13% in 2015, 2.5% in 2016, and 3.75% in the long run.1Many traditional tools used to measure and manage risk are inappropriate for today’s conditions. Recent cycles of mortgage refinancing will disrupt the ability to calculate mortgage durations based on history, causing many to underestimate how long they’ll be operating with very low yield portfolios. Similarly, rate-shock approaches focused one to two years out may not adequately account for the long-term risk of margin compression in a gradual recovery.We are facing a unique situation that requires an out-of-the-box solution.Cost Advantages Of Reward Checking AccountsHigh-yield, reward-based checking accounts are a surprising but stable defense against margin compression for a number of reasons.An important factor is that there is a median 52% “cost of funds discount” built into high-yield checking accounts.2 Using data compiled from more than 2 million reward checking account holders from nearly 700 community financial institutions, BancVue finds the median promotional rate was 1.98% nationwide in 2013. Yet the median cost of funds was 0.94%, leading to this 52% COF discount, or 104 basis points. The dramatic difference between true COF and the promotional rate occurs for two reasons. First, not every account holder meets the qualifications for the promotional rate, thus earning a nominal “base rate.” Additionally, account holders that do qualify are paid the highest promotional rate only on balances up to a pre-determined cap.It is important to note that no other deposit project enjoys this COF discount. And more importantly, this discount increases as rates rise. The higher the rate, the larger the discount amount. Provided account holders qualify at the same rate, and the balance cap remains the same, a 52% COF discount on 4.00% APY would mean a 1.92% COF, or 208 basis points, compared to the 104 basis point average in 2013. Meanwhile, a 3.70% APY 3-year CD (the average prior to 2008 collapse) has an exact COF of 3.70%.Additional factors include an opportunity for a more gradual increase compared to the market and other products. I have provided a detailed analysis and institution examples in this white paper on the rising rate environment.Take Charge Of Your Deposit MixThe flexibility of high-yield reward accounts to react to changing conditions makes them that much more attractive. Slight changes in product design (promotional rate, balance cap, etc.) can significantly decrease actual COF. Additionally, regardless if rates are rising, falling, or flat, these accounts generate substantially more non-interest income than CDs or even traditional checking accounts.Some credit unions may be in a position of wanting new relationships, but not necessarily more deposits. These credit unions have the opportunity to restructure their deposit portfolio away from CDs to revenue-generating transactional accounts with a minimal increase in their overall deposit dollars.Thus, these accounts are not only an effective hedge against margin compression due to rising rates, they are also a reliable revenue source in any environment. 10SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Jeremy Foster Jeremy’s visionary retail leadership helped a $500 million bank reach its highest levels of profitability in 100 years. He also managed bank-training curriculum for Accenture nationwide, reducing training costs … Web: www.bancvue.com Detailslast_img read more

Gender marketing strategies in the referral space

first_img 5SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr At RewardStream, we are always interested in how members of the referral programs that we operate for our clients behave. Ultimately, we’re interested in helping our clients acquire high lifetime value customers by getting their best customers to make referrals to their friends and family. Referrals are, after all, the best and most cost-effective way for you to attract new customers.It is important to pinpoint which of your customers are most likely to make referrals. It is also important to encourage your best customers, the most loyal customers, who spend the most, return frequently, purchase multiple products, etc., to engage in the referral process. “Like attracts like” in referral programs, and if your best customers are making referrals, the new customers they drive to your business are likely to be “high value” as well.But that’s not all there is to it. Sometimes your highest value customers are not the kind who will make referrals. So, if not these highest value customers, who is more likely to help boost your referral marketing efforts? continue reading »last_img read more

Credit unions trapped in the thick of thin things

first_img 206SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Scott Butterfield Spend as much time with credit union boards and management teams as I do and you’ll learn that far too many credit union leaders spend too much time focused on the “thin” operational things and not enough time and thought on the “thick” strategic things.The thick important things are the mission, vision, and values that define us. The thick is the bold strategies that inspire us to move forward and motivate meaningful engagement. It’s a fuller understanding of how the world is changing around us, and a constant desire to evolve, adapt, change, grow, and affect others in a meaningful way.The thin, less-important things are operational and tactical. The business we’re in requires a high degree of compliance and exactness, whether it’s timely reporting to examiners, accurate transactions for members, or monitoring internal controls. These things are all very important. However, if we’re not careful, these operational details can easily become all that we regularly focus on, and we become trapped in the thick of thin things.SymptomsIt’s usually easy to spot credit unions trapped in the thin of things. Growth and revenue are weaker at these credit unions. Culturally, they reward good operational results, but don’t reward new ideas or risk-taking at the same level. Ask these leaders where they are headed and they give you a capital, asset, or revenue ratio. It’s sad when the “people helping people” movement is defined first by numbers and ratios. They are thin on strategic plans and thick with every possible operational procedure you can imagine. They are compliant – meaning the only rules they follow are the ones spelled out in a rule or regulation or based on whatever the broader credit union herd is grazing on at the moment (yes, I just compared some credit unions to a herd of sheep). It’s not uncommon to find credit unions that celebrate immaculate exams, audits, and ridiculously low delinquency numbers – all the while, they have failed to keep up with technology, and growth and revenue is weak because they have failed to invest for tomorrow. Review the board minutes or management team minutes of these organizations and you’ll see mention after mention of thin operational issues and very little strategic content. Credit unions must excel both operationally and strategically to survive.RemediesCredit union leadership (board and management) determine the level of strategic thought and action that will occur. Leaders must have the discipline to invest time.  For some, it’s easy to drift from strategic to operational – especially if operational is their default comfort zone. Your team will follow your lead and respond to what you recognize and reward.Once you have your priorities straight, make sure you have the right people in place to handle all (or most) of the operational issues. Having the right people in place and delegating the right things will allow you to spend less time on operational issues and more time on strategic issues.  I realize this is challenging for smaller credit unions. However, I believe that even though smaller credit union leaders are forced to spend more time on operational things, it’s possible to carve out extra time for strategic thought and action. I work with a lot of best-practice smaller credit unions with very busy leaders who still make strategic action a priority – even though they are still reviewing loans and dealing with examiners.  Ask these credit union leaders where they’re headed and you’re sure to get a meaningful answer, and their credit union’s performance and culture reflect their strategic thinking.Management and boards can do a better job structuring board meeting agendas. Everything operational that can be moved to a consent agenda should be. Next, move strategic business to the top of the agenda to be sure you don’t run out of time.  I’d rather run out of time on the operational items at the end of the meeting. Each short-term and long-term strategy should have goals and milestones that management regularly reports on. Results on these strategies should be the focus of the board conversation – not budget line items that could easily be addressed offline, or waste-of-time conversations explaining why the number of delinquent loans increased from 25 to 27 during the month.Invest the time in developing the right strategies for your credit union. Spend less time focused on what the credit union down the street is doing and more time looking at the issues that are influencing your members, and the future members you want to attract. You want to anticipate and plan for what their needs will be five years from now, and make sure you are prepared to meet them.  Spend as much time considering external opportunities as you do external threats, less time complaining over regulatory uncertainty and more time addressing opportunities to differentiate and evolve.Why it mattersStrategic Planning for Dummies points out that “a strategic plan is a critical management tool that guides an organization to do a better job because a plan focuses the energy, resources, and time of everyone in the organization in the same direction.” Understanding that is easy; constantly doing it is the hard part.  You and your team’s ability to think and act strategically will determine the long-term viability and success of your organization. If you’re not sure where your organization is headed or you feel stuck in the thick of thin things, act now. Even if you have to start small, begin now to make strategic thinking and action a priority. Scott is the Principal of Your Credit Union Partner, PLLC.Your Credit Union Partner (YCUP) is a trusted advisor to the leaders of more than 100 credit unions located throughout … Web: www.yourcupartner.org Detailslast_img read more

Regus shares rise thanks to Dixon

first_imgTo access this article REGISTER NOWWould you like print copies, app and digital replica access too? SUBSCRIBE for as little as £5 per week. Would you like to read more?Register for free to finish this article.Sign up now for the following benefits:Four FREE articles of your choice per monthBreaking news, comment and analysis from industry experts as it happensChoose from our portfolio of email newsletterslast_img

Pig paradise with space for the humans hits the market

first_imgThe wee piggy, dubbed Ash after the incident, was taken to the RSPCA’s animal hospital where a veterinarian diagnosed him as being dehydrated and suffering from stress. Ash was adopted by some kind Morningside locals who gave him his own cabin, plenty of space to roam and a well rounded diet that included mangoes. Ash enjoying a meal by the pool at his Algoori St home in 2014. Photo: Jamie Hanson.But the time has come for Ash to say goodbye to his sty-lish home on the 4047sq m property at 38 Algoori St, Morningside. And though Ash features in the promotional photos for the property, Brisbane’s own pig in the city is most definitely not for sale, said Place Woolloongabba selling agent James Curtain. “The owners are certainly taking Ash with them,” he said. So while money can’t buy you the famous pig, it can get you this rare slice of inner-city acreage 6km from the CBD with enough room to house a pampered piggy. Ash at home with some of his adopted fur and feather siblings. Picture: supplied.“When you look at how close the property is to the city and growing infrastructure, it’s a genuinely a rare home,” Mr Curtain said. More from newsParks and wildlife the new lust-haves post coronavirus11 hours agoNoosa’s best beachfront penthouse is about to hit the market11 hours ago“You do feel like you’re in a country residence. To have all that expanse with room for a pig, chickens and dogs, it does feel very rural.” The property comes with a beautifully renovated 140-year-old farmhouse with VJ walls, timber floorboards and original log fireplaces. An oversized granny flat is currently generating a tidy income through Airbnb and there is a pool, creek, horse stable, chook shed, greenhouse and fruit trees on the property. Inside the home at 38 Algoori St, Morningside. Picture: supplied.Mr Curtain said the owners, who wished to leave the spotlight to Ash, had loved living at the home. “They are genuinely sad about having to move on but the time has come to downsize,” he said. “They have loved raising their children at that home and equally have loved having their grandchildren there as well.”The property is on a tree-lined street close to schools and riverside precincts. Beach house hits market with jawdropping price The home at 38 Algoori St, Morningside. Picture: supplied.BRISBANE’S famous Ashes pig is saying goodbye to his porcine paradise in Morningside as his owners list their pocket of urban acreage and character home for sale. The pig became somewhat of celebrity in 2013 when he was smuggled into the Gabba during the November Ashes test. The then 10kg piglet was disguised as a baby and had his snout taped shut when discovered by security. Number of homes sold for profit set to risecenter_img Tax cuts, not rate cuts, necessary MORE: Housing set for fresh record highslast_img read more

Science, Enforcement Lag as Car Accidents, Claims Rise in Legal Cannabis States

first_imgInsurance Journal 18 November 2019Family First Comment: “Colorado, Oregon, and Washington saw a combined 5.2% increase in the rate of police-reported crashes after legalizing recreational marijuana, compared with neighboring states where such sales are illegal, according to data compiled and analyzed by the Insurance Institute for Highway Safety.”Car crashes in the first three states to legalize recreational marijuana have soared as law enforcement and regulators struggle to define driving high, let alone determine how to fight it.Colorado, Oregon, and Washington saw a combined 5.2% increase in the rate of police-reported crashes after legalizing recreational marijuana, compared with neighboring states where such sales are illegal, according to data compiled and analyzed by the Insurance Institute for Highway Safety. Researchers tallied crash rates between 2012 and 2016.Auto-insurance collision claims in the three states have also increased a combined 6% since legalization, compared with neighboring western states without legal weed, the Highway Loss Data Institute found. Analysts controlled for variables such as driver population, car model, weather, and driving environment.The increases have caught Congress and federal regulators off guard as states with legalized marijuana seek answers. Unlike with alcohol, scientifically there’s neither a proven definition of marijuana-impaired driving nor a method of detecting it, making it difficult to police and prosecute. Insurance companies say driving under the influence statistics don’t separate out marijuana and can’t be used to set rates, taking away another potential deterrent to driving high. And Congress has impeded regulator efforts to collect more information on the subject.“Drunk driving is still the No. 1 killer on our roads,” said Helen Witty, president of Mothers Against Drunk Driving. “But drugged driving, as it’s legalized across this country, is a huge, emerging issue.”Scientists know that drivers who are high tend to drive at lower speeds, have more difficulty staying in their lanes, and are slower to brake in an emergency than drunk drivers, the National Highway Traffic Safety Administration reported.READ MORE: https://www.insurancejournal.com/news/national/2019/11/18/548752.htmlast_img read more

Uganda Supreme Court bans repayment of bride price

first_imgSouth Africa appoints first female Supreme Court president Liberia’s Supreme Court halts presidential runoff vote The refund of bride price after a breakdown of a customary marriage in Uganda is now illegal. The Supreme Court has pronounced. The refund of bride price after a breakdown of a customary marriage in Uganda is now illegal. The Supreme Court has pronounced.Uganda’s Supreme Court ruled Thursday that refunding of goods paid to a bride’s family after divorce was illegal, sparking celebration by rights groups who said women would no longer be “chained in violent relationships.”In Uganda, as in many nations, the custom of the groom or his family paying a sum of money or property – known as a “bride price” – to the parents of the bride upon a marriage has a long tradition.Bride prices are payments made from the groom’s family to the bride’s – the opposite of dowries paid in some countries, where the bride hands goods over to the man.The Supreme Court ruled that refunding it upon dissolution of a customary marriage was unconstitutional, after local women’s rights group Mifumi launched an appeal following an earlier court decision, arguing the practice contributed to domestic violence.“Refunding compromises the dignity of the woman,” Chief Justice Bart Katureebe said, according to the Daily Monitor newspaper, adding that paying a dowry back implied a woman was in a marriage as though on “loan.”Mifumi said the judge’s decision was a “landmark in the history of Uganda” that meant women were “now free to walk out of an abusive relationship without fear” of how their family would pay back the bride price.Mifumi said the payment of a bride price “reduces the status of women to cattle, to property that can be earned and paid for and exchanged for goods.”The charity, along with 12 other individuals, first launched a 2007 petition at the Constitutional Court, arguing that the refunding of bride price portrayed women “as an article in a market for sale” amounting to “degrading treatment.”Relatedcenter_img Uganda bans smoking in public placeslast_img read more

Lady Bulldogs Fall Short Against Lady Panthers

first_imgThe BMS 7th Grade Volleyball lost a tough match against Jennings County: 25-15 and 25-16. Laney Walsman scored 5 points, one being an ace. Kennedy Westrick scored 5 point, two being aces. Kaitlyn Sarringhaus also scored 5 points with her serves. Kaitlyn Sarringhaus and Jenna Honnert had great passes from the back row. Kennedy Westrick and Laney Walsman had great digs and hustle. Tiffany Hawker, Cayman Werner, and Jadyn Harrington all added great sets for our hitters. Jadyn Harrington had 3 kills. Megan Meyer had 2 kills. Cayman Werner, Ashlee Cornn, and Kaitlyn Sarringhaus each had one kill. Samantha Kessens added one great hit. Their record is 5-6!Courtesy of Bulldogs Coach Megan Werner.The BMS 8th Grade Volleyball team lost to Jennings County 25-19, 25-18.  Jade Kopp earn 5 service points for the team.  Sydnee Schaefer had 4 services points.  From the spiking line Jade Kopp had 3 kills.  Laney Flynn earned 2 kills and Katie Shane and Carley Pride each had a kill. Their record is 6-5.  The team faces Milan on Monday in the SEI tourney.Courtesy of Bulldogs Coach Angie Ehrman.last_img read more

Wet track conditions KO Marshalltown

first_imgBy Jeremy Fox MARSHALLTOWN, Iowa (May 2) – Races for tonight at Marshalltown Speedway have been canceled because of wet conditions. Next Friday night, May 9 is the annual Cliff Chambers Memorial program presented by Local UAW 893.last_img

We knew what win meant – Koscielny

first_imgLaurent Koscielny insists the Arsenal players knew exactly what was at stake if they had failed to beat Newcastle and missed out on another shot at the Champions League. Boss Arsene Wenger feels his side have gone some way to answering critics following their end to what had been a frustrating campaign – including the lows of cup defeats by Bradford and Blackburn, before a Champions League masterclass from Bayern Munich at the Emirates Stadium only to then outplay the Germans when winning the second leg of the last-16 tie. “The exceptional attitude and determination of this group of players has been rewarded,” Wenger said. “They continued to believe when we were seven points behind Tottenham in mid-March. [They knew] that we had no room for error any more and you could never see any sign of giving in.” Arsenal will be proactive in the summer transfer market, with the free transfer of France Under-21 forward Yaya Sanogo from Auxerre expected to be the first of several new arrivals. Wenger is understood to have targeted offensive additions, with the likes of Fiorentina’s Stevan Jovetic, Real Madrid frontman Gonzalo Higuain and even England forward Wayne Rooney all said to be on the Arsenal manager’s radar, as is Borussia Dortmund defender Lukasz Piszczek and even Brazil goalkeeper Julio Cesar, who is set to leave relegated QPR. Wenger, though, warned finding the right man at the right price is set to be another test, and he said: “We have been remarkably consistent. We won every away game so it’s a good springboard for next season, to transfer that belief into the start of next season, that means we need stability and to strengthen our group if possible. “However, there are many clubs out there with a lot of money so the competition is very hard – there is not as much talent as money today in football.” The Gunners ended the Barclays Premier League campaign by winning eight of the final 10 matches to move back ahead of north London rivals Tottenham and seal a top-four finish following the 1-0 victory at Newcastle. Koscielny, whose second-half goal at St James’ Park proved crucial, feels everyone deserves great credit for the superb collective effort. “It is very important for the club to be in the Champions League,” he said, quoted on www.arsenal.com. “The team played well and gave themselves for the team. We are all good players and we want to play Champions League football. It is a big competition. We did the job and we are happy.” center_img Press Associationlast_img read more