Asset/Liability Management


With capital being the foundation of your institution, it is important to properly prepare for the expected and unexpected. Let us work with you to manage your current capital and plan for future capital adequacy.

Capital is the foundation which every community bank is built upon. A weak foundation will not support a shaky structure. Likewise, a strong foundation can support traditional, conservative community banking. In our book for community bank directors, The Art of Risk in Community Banks The "How-To" Guide, we refer to a bank's capital as a "diamond with many facets." To understand and optimize the bank's capital adequacy for each business model, capital must be viewed from many perspectives. Growth, credit issues, earnings, interest rate fluctuations, and dividends have an effect on each of these perspectives.

The Great Recession proved that strong capital served the community banking industry. Though there were many failures, the vast majority of community banks were able to weather the recession and the first credit cycle since the early 90s. Now, in the aftermath of the Great Recession, focus is being renewed on capital adequacy and capital planning for the future. All of this is featured in the book The Art of Capital Planning The "How-To" Guide. The challenge to every community bank board and management team is to not only create the long-term capital plan, but to fully understand all facets of capital to enable the bank to effectively implement its strategic plan.