1 A New Era for Community Banking.
A Five-Forces Analysis of the Competitive Position of Community Banks.
Rivalry Within the Industry and New (Really Returning) Entrants.
The Bargaining Power of Suppliers and Customers.
The Threat of New Products.
Has the Community Banking Model Changed?
Winners and Losers.
The Revolution of 2008.
The Nationalization of Fannie, Freddie, and Poof! No More Private Securitization.
The Loss of Wall Street Balance Sheets: Who Moved My Primary Dealer?
The Collapse of the Consumer: An Escalade for Every Driveway.
The Collapse of the Housing Market: Jingle Mail, Jingle Mail, Jingle All the Way.
A Look Forward.
Consolidation and Less Competition for Community Banks from Larger Institutions.
Signifi cantly Improved Liability Pricing.
More Big Failures.
A Recession Deeper Than the Early 1980s.
Housing Prices Fail to Rise.
The Securitization Engine Fails to Restart.
The Treasury Effectively Becomes an Activist Shareholder.
Crowding Out by the Treasury.
A Prolonged Period of Stagfl ation Driven by Skyrocketing Energy Costs and Permanently Higher Tax Rates.
Where, Incidentally, Is the Next Bubble Going to Be If Not in Goods Prices?
2 Historical Credit Crises and What's Different Now.
The Derivatives Mess of 1994.
The Russian and LTCM Crisis of 1998.
The Commercial Real Estate and S&L Crisis of 1988 to 1992.
How Bad Can Things Get?
3 Valuations and Lessons from the Equity Markets.
What Drives Bank Valuations?
What Investors Look for in Different Parts of the Credit Cycle.
4 Liabilities and Capital.
Liabilities and Franchise Value.
Advice from a Flat Curve Environment (2007).
5 Managing the Balance Sheet Through Different Interest-Rate Cycles.
What Brokers Will Ask You to Do and When You Should Do Them.
Deleveraging, Including Loan Sales.
6 Investments and the Wholesale Balance Sheet.
The Cost of Liquidity.
The Bond Portfolio and A/L Management.
The Portfolio as an Earnings Driver.
Appropriate Products for Bank Investment Portfolios.
Agency MBS and CMOs.
Ginnie Mae MBS and CMOs.
SBA Floating- and Fixed-Rate Pools.
Callable and Bullet Agency Debentures.
Bank-Qualifi ed Municipals.
Portfolio Structures and Processes That Work.
7 What Banks Should Ask of Their Brokers.
Products and Services Your Broker Should Provide.
Different Brokerage Models.
Questions Your Broker Should Know the Answer to (or Should at Least Ask).
8 Tax Effi ciency: As Important as Operational Efficiency.
When Munis Make Sense.
When to Put BOLI on the Balance Sheet.
Case Study: Munis Versus BOLI.
BOLI Specifics: The Case for Separate Account Versus General Account.
9 Derivatives as a Way to Manage Balance Sheet, Earnings, and Business Risk.
Macro, One-Way, and Two-Way (or Client) Hedging Examples.
Two-Way or Client Hedging.
A Word on Structured Repo.
Appendix: Caps, Floors, and Swap Valuations.
Performance Measurement Through Peer Analysis and Benchmarking.
Synthetic Duration Matching.
Synthetic Historical Volatility Matching.
SD of Portfolio Returns ÷ SD of Index Return.
Sharpe Ratio, Treynor Measure, Scaled Returns, and Scenario Analysis.
About the Author.