November 2011
3 posts
3Q Bank Trends
This is great information on the state of banking. BankTrends, in particular, breaks out the performance of community banks and large banks.
http://banktrends.wordpress.com/2011/11/09/q3-bank-performance-community-regional-and-mega-banks/
The Customer Shift
With a country focused on greed, over-spending, and debt, there appears to be a growing sense of frustrtion towards the government and banks, as evidenced by the Occupy Wall Street movement. I believe this movement lacks organization, and for the most part, a singular focus. Despite this, I can’t help but think that it represents the growing frustration our country has with the way...
The Question of Regulation
If you have read my past posts then you undoubtedly understand my position regarding regulation and compliance and the effect it is having on the banking industry, and subsequently, small businesses. I want to point out that we believe that a degree of regulation is absolutely necessary in order to protect consumers. Without proper oversight creditors have the ability to leverage deposits in a...
October 2011
8 posts
Thank you ABA →
Customer Relationship Management
In the midst of the challenges community banks face in remaining profitable despite additional regulatory pressure, there is a growing frustration with Mega-Banks and their approach to customer service. Despite this tremendous advantage, community banks have been unable to capitalize on this tremendous opportunity.
According to a report by Reddon Financial Group’s National Consumer...
Less than 1 in 10
For those of us who believe that creating a highly complicated regulatory environment will cripple the profitability, and potentially existence, of small community banks, then the following survey should provide some evidence as to the long lasting effects this could have. Small business successes are critical to a healthy economy. Based on the survey below, there was an approval rate of LESS...
Improvement?
My question is what is the CAMELS quality that exists within the 64% of unchanged ratings? We’ve been at this for a few years and examiners should begin to look closely at improvements in CAMELS.
Banker Reports on Recent FDIC Examination Experiences
Summary Report
Tuesday, September 27, 2011
WatchI thought this was a great summary of the concerns community banks are facing with The Dodd Frank Act. Again, however, it is the 4800 pages of Dodd Frank and the uncertainty it brings that causes the biggest problem. While I am certain that the regulatory burden will force banks to improve and identify efficiencies, it is the timing of Dodd Frank that is crippling community banks. As is pointed...
September 2011
15 posts
Strongest SBA Participants →
The Power of Uncertainty
As I have stated before I really believe that the challenges facing our economy are directly and indirectly related to the lack of leverage businesses are able to deploy as part of their overall growth strategy. However, due to numerous reasons, banks have restricted lending activity to only those that can prove “they don’t need it”. I heard this from numerous community bankers...
How To Talk To An Examiner (If You Must)
Something I think all bankers are struggling with at all levels. I was researching the topic when I ran across this great advice from Greg Webb, an attorney with Gerrish McCreary Smith, PC. Mr. Webb was kind enough to allow me to share his thoughts on my blog. I would also like to thank the Western Independent Bankers for allowing us the opportunity to participate in this discussion.
How to...
A Ratio The Size of Texas (Part 2)
I first took a look at how Texas Ratios are trending. There are currently 50 financial institutions ($100mm plus) that exceed a 230% ratio. Based on the numbers I pulled on banks closed so far this year, it would seem to indicate that many of the banks in the Top 50 of Texas Ratios are likely facing closure. Here is a breakdown by state.
It would appear that the concentration of closings in...
“We are linked to our region and our community,” We try to distinguish ourselves...”
– Robert Weisel
Sterling Savings Bank
http://www.nytimes.com/2011/09/10/opinion/nocera-mr-banker-can-you-spare-a-dime.html?_r=2&scp=4&sq=joe%20nocera&st=cse
A Ratio The Size Of Texas
The troubled asset ratio of a bank has become a common way of determining a bank’s sustainability in light of troubled loans. This ratio is commonly referred to as the “Texas Ratio”, and while it is not a performance indicator used by regulatory agencies, it is without a doubt the largest “red flag”. The Texas Ratio is an indicator of how much funds a bank has...
7 tags
Florida Bank Closes
First National Bank of Florida in Milton, Florida was closed by the OCC on Friday, the 71st closing of 2011. The CharterBank of Georgia will assume the deposits and 73% of the assets. While banks continue to close in Georgia, it is interesting that the last 3 acquisitions from the FDIC have been Georgia institutions.
...
3 tags
“Good management is the art of making problems so interesting and their solutions...”
9 tags
Proving It's the Economy
It is not difficult to understand that the tremendous loss in collateral values across loan portfolios is due to very difficult economic conditions facing investors. And it is very true that most loans were originated utilizing appropriate credit underwriting standards at the time of the loan. However, examiners have made it clear that the burden of proof rests with the bank in these...
7 tags
The significance of 27.14%
Two more banks were closed this past Friday prior to Labor Day Weekend, assuring the weekend did not go well for a few. Closed Friday were CreekSide Bank of Woodstock, GA and Patriot Bank in Cumming, GA. The deposits and assets of both banks will be assumed by Georgia Commerce in Atlanta. Both banks had loan portfolios that were plagued with troubled loans, accounting for over 40% of the...
7 tags
(S)ome(B)ody (L)ost (F)avor
I am trying to understand the impact behind the government’s Small Business Lending Fund. On the surface, this did seem like an innovative way to stimulate small business lending and playing a small role in economic recovery. However, research suggests that only 1/3 of these funds were ever applied for. I took a look at the banks who have received this capital, and despite their high...
7 tags
Focusing on Less Concentration?????
I was thinking about what it would be like to tell my kid to focus on concentrating less. How confused might this make him? Assume my son is a genius in math (he is not), but is looking at schools such as MIT, Harvard, and Stanford. As a concerned father, it concerns me that he is TOO focused on math only and should begin focusing on other areas such as football and, maybe, water skiing. I...
August 2011
3 posts
Attracting Top Talent in Credit
As the credit crisis became clear and loans began experiencing significant risk, it became painfully obvious to banks that “hunters” and “managers” were very different skill sets. In the height of the lending boom, banks were seeking loan originators with vast experience in identifying credits that would provide tremendous returns to shareholders. Unfortunately, many of...
The Return of Lending
It seems everyday we discuss the lack of economic growth through unemployment. An infusion of cash is needed in order to spur the desired growth to support manufacturing of goods and/or services and subsequently hiring. When looking at the very low rise in GDP despite the injection of cash from the fed and government spending, one might assume this entire problem is due to the inability or lack...
6 tags
Appraisal and Valuation Thoughts
Too often banks are meeting the requirements of updated appraisals on troubled loans, however these appraisals often differ from the bank’s opinion. Once an appraisal is submitted, the bank should have solid review plans within its Appraisal Policy in order to justify its value position to the regulatory agencies. There are numerous sources out there to assist banks in verifying or...
June 2011
3 posts
Partnership Announcement
We are excited to announce our partnership with Sageworks, a financial software company out of Raleigh, NC. Sageworks is a leading provider of credit analysis, loan administration, and stress testing software. This partnership allows Dittrich & Associates and Sageworks the opportunity to work with one another in ensuring that financial institutions of all sizes have the proper tools to...
Continued Strength
The strenth and success of Dittrich & Associates over the past few years is a direct result of the tremendous experience our staff has in all aspects of banking. As our team has worked with community and regional banks throughout the country, we have realized how many needs there are as a result of increasing compliance demands and examinations. As a result, we have developed teams focused...
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