Why Sacrificing Yield and Structure is a Bomb Waiting to Go Off

Posted on August 2, 2016 at 9:02 AM by John Robertson

The first quarter call report data results came out recently with some interesting data. Bank industry assets leapt to $16.293 trillion, adding an additional $325.59 Billion (2.04%) to financial institutions’ portfolios. This the largest increase since the first quarter of 2008, which encompasses a span of 32 quarters. A third of the increase in assets went to cash. So not only are financial institutions lending, they also have sizable cash reserves available. Some would consider this good news, but a closer look at the details portends what may be looming in the future.

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Peeling the Layers of Today’s Loan Pricing

Posted on March 8, 2016 at 5:00 PM by John Robertson

I began this blog series asking the question “How can banks offer such low rates?” I outlined a simplistic view of loan pricing as:

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How Can Banks Offer Such Low Rates?

Posted on January 11, 2016 at 5:05 PM by John Robertson

For quite some time now, the banking industry has experienced a flat funding curve. Very small spreads have existed between the short and long term rates. Slowly, we have begun to see the onset of a normalized curve. At this writing, the five year FHLB Advance rate is about 2.00%. A simplistic view of loan pricing looks something like this:

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