Weekly Briefings Archive

Briefings Archive

Release Date	Description	Download Presentation
March 2020
March 2, 2020	Jamie Sumner, chief analyst, reviews the impact of the coronavirus and the prospect of where rates will go. Overall, rates are expected to continue their downward momentum over the next week. With the 10-year UST nearing 1%, the question of refi advantage becomes a significant headwind to bank yield on earning assets, and ultimately, net interest margin.
March 6, 2020	Jamie Sumner, chief analyst, reviews the employment situation report and comments on the current market turmoil. Overall, there were 273,000 jobs created in February, which came in higher than estimates while the unemployment rate at 3.5%. The market continues to sell off, and the treasury yield continues the path to zero. (Note the TIPS yields have already breached zero.) While the Fed made an emergency 50 bps cut this week, they are expected to follow that up with an additional cut at their meeting this month. The implied probabilities are at 55% for a 25 bp cut and 45% for a 50 bp cut. If you are headed to the ICBA Live conference next week, stop by booth #244 and say hi!
March 21, 2020	Jamie Sumner, chief analyst, reviews the recent market moves and the apparent panic in the market.
February 2020
February 14, 2020	Jamie Sumner, chief analyst, reviews the performance of the community bank benchmark group for the 4Q 2019. Overall, the median ROAA remains above 1% for the entire group. However, the Mutual segment’s ROAA came in at 0.54% for the 4Q. The median net interest margin decreased 9 bps to 3.75%. It is anticipated that margin compression could continue throughout 2020. As for the median S&B Total Risk Index score, it has come up slightly.
January 2020
January 22, 2020	In this briefing, Jamie Sumner, chief analyst, reviews various forecasts for 2020 GDP, including the Fed, IMF and the Conference Board. All the forecasts have a slowdown in the U.S. GDP growth projected for 2020. The Atlanta Fed’s GDPNow index currently projects a 1.8% 4th quarter GDP. The BEA will release the Advance Estimate of the 4Q GDP later next week. Lastly, Jamie discusses the recent downward trend in the 5-year, 5-year forward inflation expectations and the impact on interest rates.
January 31, 2020	In this briefing, Jamie Sumner, chief analyst, reviews various forecasts for 2020 GDP, including the Fed, IMF and the Conference Board. All the forecasts have a slowdown in the U.S. GDP growth projected for 2020. The Atlanta Fed’s GDPNow index currently projects a 1.8% 4th quarter GDP. The BEA will release the Advance Estimate of the 4Q GDP later next week. Lastly, Jamie discusses the recent downward trend in the 5-year, 5-year forward inflation expectatioIn this briefing, Jamie Sumner, chief analyst, reviews the most recent FOMC statement along with the Advance Estimate of 4Q GDP with the rates of inflation, state unemployment, and the December state coincident index released by the Federal Reserve Bank of Philadelphia. Overall, the U.S. economy remains solid, while inflation was lower than expected. Listen in as we review these economic indicators.ns and the impact on interest rates.
December 2019
December 12, 2019	In this briefing, Jamie Sumner, chief analyst, reviews the December 11th Fed Statement and projections. Additionally, Jamie covers the 2nd release of the 3Q GDP and the Atlanta Fed’s GDPNow index. The GDPNow index currently projects a 2% 4th quarter GDP. Lastly, Jamie discusses the recent increase in the Fed’s balances sheet and its implication on interest rates.
November 2019
November 20, 2019	In this briefing, Jamie Sumner, chief analyst, reviews the performance of the community bank benchmark group for the 3Q 2019. Overall, the median ROAA remains above 1% for the entire group. However, the Mutual segment’s ROAA came in at 0.66% for the 3Q. The median net interest margin increased 2 bps to 3.84%. However, it is anticipated that margin compression could occur on a broad perspective in 2020. As for the median S&B Total Risk Index score, it has come down slightly.
October 2019
October 10, 2019	In this briefing, Jamie Sumner, chief analyst, reviews the ISM manufacturing and non-manufacturing index, both of which are continuing their move to lower levels. Furthermore, Jamie discusses the employment situation report for September which pointed to lower job creation and slower growth in wages. Lastly, the PPI and CPI releases are reviewed, both of which continue to point to lower inflation and introduces the S&B Sentiment Index.
September 2019
September 26, 2019	This week Jamie Sumner, chief analyst, reviews the third estimate of the 2Q 2019 GDP growth rate and compares our current expansionary period to the prior three expansionary periods. Additional, Jamie covers inflation, the Fed projections table, and the dot plot. To end the briefing, Jamie relays his expectation as to where rates are headed.
August 2019
August 20, 2019	This week Jamie Sumner, chief analyst, reviews the performance of the community bank benchmark group for the 2Q 2019. Overall, median ROAA remains above 1% for the entire group. However, the Mutual segment’s ROAA came in at 0.63% for the 2Q. The median net interest margin fell to 3.63% shows signs of contraction that may be compounded by the recent move down in interest rates. As for the median S&B Total Risk Index score, it has come down slightly. However, there was a small increase in credit and liquidity risk indicators.
August 6, 2019	This week Jamie Sumner, chief analyst, reviews the GDP release, inflation, the fed statement and unemployment report. These releases, combined with others, have has a significant impact on the market and rates. Listen in as Jamie reviews this information and how the market has reacted.
July 2019
July 23, 2019	This week Jamie Sumner, chief analyst, reviews the 1Q GDP results in light of the coming release of the 2Q GDP Advance Estimate. The FRB of Atlanta’s GDP Now is projecting a GDP growth rate of 1.6% consistent with our expectation of a sub 2% growth rate. As for the Federal Funds Rate, the market is placing an 81.5% probability of a 25 bps reduction in the Fed Funds rate next week with an 18.5% probability of a 50 bps rate cut. Lastly, Jamie reviews the current curve compared to the yield curve one day before the Fed beginning its tightening period in December 2015.
June 2019
June 21, 2019	This week Jamie Sumner, chief analyst, reviews the FOMC statement and the dot plot. With the “patient” wording removed the likely hood of a rate cut at the next meeting is heightened and the dot plot shows potential for up to three rate cuts in 2019. Additionally, inflation measures remained moderated with inflation expectations moving lower, causing downward pressure on interest rates.
June 11, 2019	This week Jamie Sumner, chief analyst, reviews May’s Employment Situation Report. The total jobs created was a disappointing 75 thousand. Retail, transportation & warehousing, information, and government jobs all posted reductions. The unemployment rate remained the same at 3.6% while the average hourly earnings grew at a year-over-year rate of 3.1%, below last month’s 3.2% growth rate.
June 4, 2019	This week Jamie Sumner, chief analyst, reviews the second estimate of the 1Q GDP along with inflation, interest rates, and deposit rates. Overall, the 1Q GDP came in slightly weaker than the initial estimate. As for inflation, the April reading of Core PCE moved up slightly while the inflation expectations remain low. The 10-year treasure moved down significantly over the past couple of weeks. This movement places the yield curve in an inverted position between the 10year and 3month maturities. While the treasury rates have come down, the deposit rates have continued to move up during 2019. Listen in as we delve into the topics this week.
May 2019
May 22, 2019	This week Jamie Sumner, chief analyst, reviews the 1Q performance of the S&B Community Bank benchmark group. This group of banks includes banks with assets between $100 million and $5 billion. Overall performance slipped slightly as the return on average assets dropped one basis point to 1.11%. This slight decline was primarily the result of the net interest margin declining by 10 basis points. The declining in net interest margin was due to a declined in the yield on earning assets coupled with an increase in the cost of funds. Listen in to hear more about the 1Q performance of the benchmark group.
May 2, 2019	This week Jamie Sumner, chief analyst, reviews May 1st Fed Statement along with the 1Q GDP release of the Advance Estimate. Over all the Fed continues to see the economy on pace with their expectations and will maintain their patient stance in terms of rate movements. While the GDP growth was higher than expected at 3.2% the individual components shed light on a cautionary note as the consumer section of the economy has weakened. Inflation continued to be in the moderate zone and expectations of inflation have moved down throughout April. As for rates, the long end of the curve is expected to remain around it current rate while the short end of the curve has the potential to move down throughout the next 12 months.
April 2019
April 23, 2019	This week Jamie Sumner, chief analyst, reviews the performance of the 2018 S&B Top 15th Percentile group. This group of banks includes institutions that have realized an optimal level of performance throughout 2018 based on the S&B Composite Index. The S&B Composite Index measures a banks return compared to its risk results in an indication of a bank’s Risk vs. Reward relationship. The S&B Top 15th group was released on April 26, 2019.
April 16, 2019	This week Jamie Sumner, chief analyst, reviews inflation data, expectations and the most recent GDPNow estimate for the 1Q 2019 GDP growth. Overall, inflation remains contained and coming in at or near consensus. Furthermore, expectations for inflation continues to be subdued. With a little more than a week until the official release of the 1Q 2019 Advance Estimate, the GDPNow model estimates a growth rate of 2.3% as of April 8th.
March 2019
March 26, 2019	This week Jamie Sumner, chief analyst, reviews the March 20th Fed Statement, balances sheet changes and projections. Additionally, Jamie covers the market reaction and the impact on the Treasury curve. Jamie review prior periods of yield curve inversion and how rate tends to move after the inversion period.
March 19, 2019	This week Jamie Sumner, chief analyst, reviews the consumer price index and the producer price index for February 2019. Both indices continued to show moderated inflation figures and, for the most part, came in below expectations. Additionally, the personal consumption expenditure has trended below the Fed’s target. As for inflation expectations, the 5-year, 5-year forward inflation expectation rate moved up from its low in January 2019 but remained below the highs in 2018. Lastly, the fed fund implied probability has stepped up to a 40.2% probability for a rate cut in January 2020.
March 12, 2019	This week Jamie Sumner, chief analyst, reviews the February 2019 Jobs reports, along with the retail sales for January and the FRB of Atlanta’s most recent release of their GDPNow index. While the jobs report showed much lower job creation in February than expected, the unemployment rates fell to 3.8%, and the average hourly earnings continue its +3% growth rate. As for retail sales, it grew 0.2% compared to the -1.6% we saw in December of 2018. Lastly, the Atlanta Fed’s GDPNow index projects a 1Q 2019 GDP growth rate of just 0.2%.
February 2019
February 28, 2019	This week Jamie Sumner, chief analyst, the 4Q 2018 GDP Release and six headwinds for 2019. Overall, GDP growth continued its downward trend with a growth rate of 2.6% for the 4Q of 2019. For the full year of 2018 GDP growth was estimated at 2.9%. In terms of headwinds for 2019, the items we are keeping an eye on include the global slowdown, trade wars, Brexit, U.S. debt ceiling, quantitative tightening and the pause in Fed rate hikes.
February 12, 2019	This week Jamie Sumner, chief analyst, reviews the performance of the Community Bank Benchmark group for the 4Q 2018. Overall, the benchmark’s return on average assets declined by 8 bps. This decline was primarily due to the increase in noninterest expense. Increases in the level of noninterest expense to average asset ratio often occur in the 4Q due to year-end bonuses and other year-end expenses. Net interest margin increased by 1 bp over the past quarter as the yield on earning assets expanded at a slightly faster pace than the cost of funds. Generally, 2018 was a strong year for community banks.
January 2019
January 22, 2019	This week Jamie Sumner, chief analyst, reviews the December 2018 ISM Index which pointed to continued growth but at a slower pace. Both the Manufacturing and the Non-Manufacturing indices declined but remain above 50. Additionally, Jamie reviews the movements in the PPI and CPI which both pint to a pull off in inflation compared to mid-2018 levels. These trends are consistent with the trend in the 5-year, 5-year forward inflation expectations. The pull off in inflation expectations is one component behind the reduction in the 10-year Treasury yields. Lastly, Jamie reviews the GDPNow which estimates the 4Q GDP growth at 2.8% as of January 16th. However, no additional updates have been provided due to the lack of data availability as a result of the government shutdown.
January 8, 2018	This week Jamie Sumner, chief analyst, reviews the December 2018 Employment Report along with the U.S. Treasury Curve and the Fed Funds Probability chart. Overall, December was a strong month producing 312,000 jobs with a good degree of diversity in the types of jobs created. Furthermore, the report showed that the average hourly earnings saw a 3.15% increase over the past year. This marks the third consecutive month with a year over year increase greater than 3%. Lastly, Jamie covers the movements in the 10-year UST and the implied probabilities of the Fed Funds rate throughout 2019.
December 2018
December 18, 2018	This week Jamie Sumner, chief analyst, reviews the CPI index which continues to show moderated inflation numbers, especially when compared to pre-2008 figures. Retail sales continued to be strong in November, with a year over year change of 4.2% and a month over month change that came in above expectations. Jamie also reviewed the movement in the 10-year UST yield over the past year, which hit a high of 3.24% in November. However, Jamie anticipates that the 10-year UST will be volatile over the next year, but will continue to come back to a trading range of 2.85-3%. As for the Fund Funds rate, it is expected that the Fed will increases rates on the19th. However, the market is suggesting that the likely hood of a rate hike in 2019 is less than 40%.
December 4, 2018	This week Jamie Sumner, chief analyst, reviews the slight changes in the second estimate of the 3Q GDP along with the advance inventories number of October, which point to a continuous replenishment of inventories. Furthermore, Jamie reviews the October construction spending report which showed a slight pull off. Lastly, Jamie discusses the treasury curve.
November 2018
November 20, 2018	This week Jamie Sumner, chief analyst, reviews some inflation numbers which continue to show a modest level of inflation. Additionally, Jamie discusses the advance retail sales release for October which showed a higher than expected growth rate on total sales. However, auto and gas the rate of growth came in just under the expectation of 0.4% at 0.3%. With the recent fall in oil and gas prices, consumers should see additional money available for the holiday spending season. Have a wonderful Thanksgiving everyone!
November 06, 2018	This week Jamie Sumner, chief analyst, reviews the 3Q 2018 performance of the community bank benchmark group. Overall the benchmark group showed an improvement in ROAA of 4 bps to 1.18%. This improvement in ROAA stems from the widening net interest margin, which hit 3.84%, and the reduction in over provisioning expense, down over 3.5%. The increases in ROAA was complemented by an overall level of risk that has been somewhat stable throughout the past 12 months. An important item of note is that the growth in aggregated loans came in under 1% for the 3Q, a level not seen since 2013. Additionally, the level of cash-type deposits to total deposits fell for the second quarter in a row suggesting that these lower cost deposits could be moving into the CD portfolios.
October 2018
October 30, 2018	This week Jamie Sumner, chief analyst, reviews the advance estimate of the 3Q 2018 GDP, September inflation and the current Fed Funds implied probabilities for the next 12 months. The 3Q GDP came in at a growth rate of 3.5%, which was slightly higher than the median forecast. The consumer segment continues to be strong. The strength in the consumer segment was complemented by the replenishment of inventories which contributed 203 bps to the overall growth rate. However, the next of exports and imports detracted from the growth rate by 178 bps, as the reduction in exports compounded the impact of the increase in imports. As for inflation, it remains in the target range. As such, the Fed Funds implied probabilities show two to three rate hikes over the next 12 months.
October 09, 2018	This week Jamie Sumner, chief analyst, reviews the jobs report for September and the ISM manufacturing and non-manufacturing reports. Overall, the big news was the 50k upward revision to the August jobs creation to 254k. However, for September the job growth was 121k jobs, the lowest since September 2017, which was low due to the impact of hurricane Harvey. Change in hourly earnings remained fairly steady at an increase of 2.8% over the past year, thus showing no significant jump in wages. Although, the unemployment rate did fall by two-tenths of a percent in September to 3.7%. As for the ISM indices, both the manufacturing and non-manufacturing indices point to continued expansion of our economy.
October 02, 2018	This week Jamie Sumner, chief analyst, reviews Fed Statement and newly released projections including the Dot Plot. Furthermore, Jamie compares the market’s implied fed rates with the dot plot to point out how different they are. Lastly, Jamie covers the inventories report which points to stronger than expected inventory builds and while overall construction spending was little changed from July.
September 2018
September 18, 2018	This week Jamie Sumner, chief analyst, reviews a number of economic releases including the Small Business Optimism Index (SBO), Producer Price Index, Consumer Price Index, Inflation Expectations, Inventories, Retail Sales and the recent GDPNow projections. Overall, the economic releases were positive, and the SBO pointed to continued optimism among the respondents. Inflation seems to be contained while retail sales continued to grow greater than 6% on a year over year basis. As such, the GDPNow projection remains above 4% for the 3Q GDP growth.
September 11, 2018	This week Jamie Sumner, chief analyst, reviews Employment Situation report for August. With 201,000 jobs created, nicely distributed types of jobs, a modest increase in wages, and narrowing of the spread between the U3 and U6 rates of unemployment, this release can be viewed as positive. In a separate release, the BLS reported an increase in labor productivity for the 2Q while the unit labor cost declined. With the array of positive economic news, the GDPnow is currently projecting GDP growth at 4.4% for the 3rd quarter.
August 2018
August 21, 2018	This week Jamie Sumner, chief analyst, reviews the 2018 Q2 performance of the S&B community bank benchmark. Overall, the benchmark has shown an improvement in ROAA while there has been just a slight increase in the average S&B Risk score. Net interest margin increased quarter over quarter fueled by a higher yield on earning assets. However, the increase in the cost of funds has tempered the growth in net interest margin. Furthermore, the trajectory of the change in the cost of funds has sped up, and we anticipate it to speed up more over the next several quarters as banks feel the pressure to increase deposit rates.
July 2018
July 31, 2018	This week Jamie Sumner, chief analyst, covers the Advance Estimate of the 2Q 2018 GDP which came in at a robust 4.1%. The actual results were 30 basis points higher than the GDPNow estimate of 3.8% on July 26th. As for inflation, Core PCE was just under expectations of 2% coming in at a 1.9% growth over the past 12 months. Wage inflation continued it crawl upward with a growth rate of 2.66% but remains subdued compared to the 3.5% average before the great recession, as measured by the Employment Cost Index. Lastly, the market continues to point to two more rate hikes this year.
July 24, 2018	This week Jamie Sumner, chief analyst, reviews the top CD specials across the U.S. Currently, the clustering of the top rates fall in the 60-month term with the highest rate at 3.5%. Jamie also reviews special “Add-ons” to CDs. Lastly, Jamie compares the special rates to wholesale funds and reviews the forward curve for the next three years.
July 17, 2018	This week Jamie Sumner, chief analyst, reviews a few inflation indicators which point to continued growth in inflation, which had been expected. These results support the Fed’s plan to raise rates two more times this year. As such, the market probabilities are weighted toward two more increases. Furthermore, our expectation for higher deposit rates seems to be coming to fruition as we continue to see CD specials of 2-3+% and we are beginning to see cash-type deposit specials too. We have even seen a savings account at 5%!
July 10, 2018	This week Jamie Sumner, chief analyst, reviews the 3rd estimate of the 1Q GDP which was reduced down to 2.0% from 2.02%. Additionally, Jamie reviews the June employment situation report which showed modest job growth and wage growth along with an influx of individuals into the labor force. This influx into the labor force caused the unemployment rate to increase to 4%, up 0.2%. Lastly, Jamie comments on the recent GDPNow forecast.
June 2018
June 26, 2018	This week Jamie Sumner, chief analyst, covers the GDPNow which shows 4.7% as the projected growth for the economy in the 2Q 2018. Some of the most recent news that has helped to maintain such a high GDPNow includes the strong retail sales and housing. Jamie also reviews the movements in the U.S. 10Y rate and the 2Y rate and the contracting spread between those two rates. Lastly, Jamie reviews the movement in the CD curve along with the recent uptick in the national average money market rate.
June 13, 2018	This week Jamie Sumner, chief analyst, reviews the FOMC statement along with the newly released projections. Additionally, Jamie reviews the CPI and the PPI releases, which continue to show moderate growth in inflation.
June 5, 2018	This week Jamie Sumner, chief analyst, reviews the second estimate for the 1Q GDP which showed a downward revision to 2.2% as anticipated. Additionally, Jamie reviews the May employment situation report. Overall, the labor market continues to be tight with the unemployment rate falling to 3.8% and 233,000 jobs being created. Hourly earnings continue to rise at a moderate pace not showing a sharp climb in wage inflation. Lastly, core PCE inflation measures remained relatively flat at 1.8%, down just slightly from the prior month.
May 2018
May 29, 2018	This week Jamie Sumner, chief analyst, reviews over the retail sales report along with the 1Q2018 retail sales and e-commerce report. Additionally, Jamie covers the inventories report which points to flat inventories for all business, while retailers reported a -0.5% decline in inventories. Lastly, the durable goods report is reviewed showing a decline in new orders of -1.7% while the ex-transportation figure increased by 0.9%.
May 15, 2018	This week Jamie Sumner, chief analyst, reviews the 1Q 2018 results for the community bank benchmark group. Overall, ROAA is up to 1.07% from 0.93 in the 1Q 2017. Net interest margin was up year over year but down quarter over quarter. With pressure on deposit rates heating up, we anticipate the net interest margin to be under pressure throughout 2018 and 2019. Net overhead was flat year over year. However, the tax burden was down to 16.84% in the 1Q 2018 reflecting the new corporate tax rate.
May 1, 2018	This week Jamie Sumner, chief analyst, reviews the 1Q 2018 GDP release and the inflation numbers released in the Personal Income and Outlays report for March 2018. Overall GDP came in higher than expected and with inflation numbers meeting expectations.
April 2018
April 24, 2018	This week Jamie Sumner, chief analyst, reviews a couple of estimates for the release of the1Q 2018 GDP as a preview to the advance estimate being released at the end of the week. Overall, the consensus is around 2%, indicating a continuation of modest growth for our economy. Core Inflation is expected to show some upward momentum but remains below 2%. However, the expectation is that as we move throughout 2018, core inflation will move up to the 2% level.
April 17, 2018	This week Jamie Sumner, chief analyst, reviews the small business optimism index which declined but remains at a high level compared to history. Furthermore, Jamie reviews the PPI, CPI and the inflation expectations index all painting a picture of a slight increase in inflation.
April 10, 2018	This week Jamie Sumner, chief analyst, reviews the employment situation report along with the current shape of the yield curve and the deposit rate data compiled by Bankrate.com. Overall, the employment situation report was a mixed bag as the jobs number came in lite and the unemployment rate remained at 4.1%. As for the yield curve, we continue to see pressure on the short end resulting in the narrowing of the 10-year to 2-year spread. The continued pressure on the short end of the curve is likely to put pressure on banks to raise the cash-type deposit rates throughout 2018.
April 3, 2018	This week Jamie Sumner, chief analyst, reviews the third estimate of the 4Q 2017 GDP which showed improvements in the consumer and investment sectors. Additionally, Jamie covers the February 2018 PCE numbers for inflation showing just a modest increase. Rounding out the briefing, Jamie covers the February inventories release for both retail and wholesale inventories along with the covering the durable goods release from the 23rd.
March 2018
March 27, 2018	This week Jamie Sumner, chief analyst, reviews the fed statement and their new set of projections. Additionally, Jamie reviews the forward curves out three years and the current fed funds rate hike probabilities for the remainder of the year. Lastly, Jamie covers deposit rates and notes how pressure is beginning to increase the cash-type deposit rates.
March 20, 2018	This week Jamie Sumner, chief analyst, reviews some of the inflation data that came out last week which continue to point to subdued inflation. Retail sales contracted by 0.1% in February compared to January. This contraction led mostly by the reduction in motor vehicle parts. With all the economic numbers that came out last week, we saw the Atlanta Fed’s GDPNow forecast drop to 1.8%.
March 13, 2018	This week Jamie Sumner, chief analyst, reviews the February employment situation report. With the number of jobs created amounting to 313,000, the report greatly exceeded the expectations of 205,000. Additionally, the jobs created were widespread among the categories tracked. As for wages, average hourly earnings increased by 2.6% year over year with was below expectations of 2.9%. Thus, softening wage inflation pressures for now. The unemployment rate was unchanged at 4.1%.
March 6, 2018	This week Jamie Sumner, chief analyst, reviews the second estimate of the 4Q 2017 GDP along with the PCE and Core PCE for January. Additionally, Jamie covers the January inventories release, which shows growth in both the retail and wholesale inventories, which could help boost the 1Q 2018 GDP is the trend continues. The durable goods release was soft, posting a month over month decline in new orders and capital goods. Lastly, Jamie covers the February ISM release which continued to exhibit optimistic results.
February 2018
February 27, 2018	This week Jamie Sumner, chief analyst, reviews some interesting charts which point to a cautionary trend regarding recessionary pressures. While not suggesting a recession is just months away, the trends in some releases and the length of our current expansionary phase do trigger some cautionary flags. Additionally, Jamie covers some of the inflation indicators trends.
February 16, 2018	The week Jamie Sumner, chief analyst, reviews the 4Q 2017 performance of the community bank benchmark group of banks with assets between $100 million and $5 billion. The impact of the new tax law was evident in the reduction of the return on average assets as the need to rebalance the deferred tax accounts resulted in inflated tax expense. However, even pre-tax ROAA declined in the 4th quarter as noninterest expense grew to 2.80% of average assets. Net interest margins increases by one basis point to 3.82%.
February 6, 2018	This week Jamie Sumner, chief analyst, reviews the January 2018 Employment situation report. Overall, this is a positive report with 200,000 jobs being created and the unemployment rate remaining at 4.1%. However, there was a bit more wage inflation than expected with the year-over-year change in average hourly earnings going up 2.9%. Additionally, the U-6 rate was up 0.1 percentage points to 8.2% as more people worked part-time for economic reasons.
January 2018
January 30, 2018	This week Jamie Sumner, chief analyst, reviews the Advance Estimate of the 4Q GDP and inflation. Overall, the 4Q GDP came in below expectations primarily due to a decline in inventories and growth in imports. However, consumer spending showed strong growth as well as fixed business and residential investments. As for inflation, it remains below the Fed's target of 2% at 1.5% growth in core PCE over the past year.
January 23, 2018	This week Jamie Sumner, chief analyst, reviews the potential GDP in conjunction with actual GDP. Furthermore, Jamie reviews the IMF’s World Economic Outlook which points to the continual strengthening of the world economy. Lastly, the GDPNow is reviewed along with the Bloomberg consensus estimate of the 4Q 2017 GDP.
January 16, 2018	The week Jamie Sumner, chief analyst, covers the Small Business Optimism Index for December 2017 along with the releases for Producer Price Index (PPI), Consumer Price Index (CPI) and Retail Sales. Although the Small Business Optimism declined from its November reading the index continues to point to optimism in the small business environment. However, these businesses are having difficulty filling open positions due to the lack of skilled applicants. As for inflation, the PPI and CPI both continue to show subdued inflation levels for December; although, core CPI did exhibit inflation that was greater than consensus. Lastly, retail sales did not meet consensus of 0.5%.
January 9, 2018	This week Jamie Sumner, chief analyst, reviews the December 2017 Employment Situation report highlighting the type of jobs created and the slight appearance of wage inflation as the average hourly wages increased by 2.5% compared to December 2016. Additionally, Jamie reviews how the U.S. Treasury curve has changed over the past three years and presents some forecasted yield curves going out three years.
January 2, 2018	This week Jamie Sumner, chief analyst, reviews the November inventories release and the Personal Income and Outlays report. Inventories were up in November which should help 4Q GDP. Additionally, personal income was up 0.3% with compensation increasing by 0.4%. This is a good sign as wages continue to increase. Personal consumption expenditures were also up by 0.6%. However, inflation came in at 0.2% with the core at 0.1%, month over month changes. The year-over-year inflation continues to remain well below the Fed’s 2% target. The Surveys of Consumers by the University of Michigan showed the sentiment index remaining strong as well as the expectations index. The consumer inflation expectation index remained relatively flat. Overall, the GDPNow index is showing the 4Q GDP projected at 2.8%, down from its prior reading of 3.3%
December 2017
December 19, 2017	This week Jamie Sumner, chief analyst, reviews the recent Federal Reserve projections from their December 12-13 meeting. Additionally, Jamie reviews the November retail sales report and the October inventory report. Both of these reports point to a potential solid 4Q GDP outcome.
December 12, 2017	This week Jamie Sumner, chief analyst, reviews the November 2017 employment situation report. Overall, the report continued to show a strong jobs market as 228,000 jobs were created while the unemployment rate was unchanged at 4.1%. Additionally, there still does not seem to be any signs of wage inflation as the average hourly rate increased by 2.5% over the past year.
December 5, 2017	This week Jamie Sumner, chief analyst, reviews the Second Estimate of the 3Q 2017 GDP. On the surface the jump in the quarterly growth to 3.3% compared to the Advance Estimate was positive. However, when reviewing the details of the release there are areas of concern. These areas of concern caused the Atlanta Fed’s GDPNow index to fall to 2.7% for the 4Q2017. However, the GDPNow index recovered as the ISM manufacturing index showed positive movements in some of its components and an overall a positive construction spending report.
November 2017
November 28, 2017	This week Jamie Sumner, chief analyst, reviews a number of release from the prior two weeks. Starting off with inflation indicators the PPI and the CPI both point to continual moderated inflation. However, there was a little pick up in the PPI which came in above consensus expectations. Retail sales also come in above consensus and we saw an upward revision to the September numbers. Overall business inventories were flat for September and the inventory-to-sales ratio fell to 1.36x. Lastly, durable goods orders fell by 1.2% month-over-month. This decline was due to the decline in aircraft orders.
November 14, 2017	This week Jamie Sumner, chief analyst, reviews the 3Q 2017 performance of the community benchmark group. Overall, earnings have continued to rise as the net interest margin widened for the benchmark group. Loans continue to gain ground as a percent of assets which has helped push up the yield on earning assets while funding cost remains very low. The 3Q 2017 was a solid quarter for the community bank benchmark group with the median ROAA topping 1%.
November 7, 2017	This week Jamie Sumner, chief analyst, reviews the October jobs report. Overall, the unemployment rate dropped by one-tenth of a percent to 4.1% and 261 thousand jobs were added. Although this report continues to have some noise due to the hurricanes we can still see some positive trends such as the reduction in the spread between the U6 and U3 unemployment rates. However, we did see the average hourly wages decline by 1 cent to $26.53 month over month while it increased 2.4% compared to October 2016. This was likely due to the large increase in leisure and hospitality jobs which tend to be lower on the pay scale.
October 2017
October 31, 2017	This week Jamie Sumner, chief analyst, reviews the Q3 2017 GDP release. Overall, the advance estimate of the 3Q GDP came in higher than expectations at 3% but just under the 2Q GDP growth rate of 3.1%. The 3Q growth rate was primarily driven by the replenishment of inventories, business equipment investments, contraction in imports, and expenditures on motor vehicles and parts.
October 24, 2017	This week Jamie Sumner, chief analyst, explores the topic of automation in retail industries and the impact on the labor force. Overall, retailers employ about 10% of the U.S. labor force so the automation of the sales process could have a rather significant impact on the U.S. jobs market. As for the banking industry, we have seen some level of automation over the past decade and there will likely be continued advancements in technologies that will streamline the deposit and lending process.
October 17, 2017	This week Jamie Sumner, chief analyst, reviews the inflation numbers for September and retail sales. Overall, inflation remains to be soft and unsupportive of a continued increase in the fed funds rate as projected by the FOMC’s dot plot. Retail sales were up 1.6% in September. However, the growth was primarily related to the aftermath of this year’s hurricanes. With last week’s releases the GDP Now forecast for the 3Q 2017 GDP was increased to 2.7%.
October 10, 2017	The week Jamie Sumner, chief analyst, reviews the September Job report and the residential real estate numbers that have come out over the past several weeks.
October 3, 2017	The week Jamie Sumner, chief analyst, reviews several of the economic releases from last week including the third estimate of the 2Q 2017 GDP, personal income and outlays, durable goods orders and inventories. Overall there was a positive trend in the releases last week which would support a solid 3Q GDP.
September 2017
September 26, 2017	This week Jamie Sumner, chief analyst, reviews the FOMC’s post-meeting statement as well as the dot plot along with their new set of projections. Once again, the fed holds the target rate at the 1-1.25 range. However, their dot plot suggests they anticipate one more rate hike this year. This is important to keep in mind as you begin your budgeting for 2018 as an additional rate hike this year could potentially trigger a need to increase your deposit pricing. As for their projections, we saw minor changes from their June 2017 projections…low economic growth rates, leveling off of the unemployment rate and below targeted inflation.
September 19, 2017	This week, Jamie Sumner, chief analysis, reviews several releases from last week including the inflation gauges of the producer price index and consumer price index. While the producer price index came in below the consensus, the consumer price index’s core reading came in at consensus with a reading of 0.2% month over month change. However, Hurricane Harvey did have an impact on the CPI results in August. Both inflation indices continue to point to an inflation level below the Fed’s 2% target. Additionally, retail sales came in at a disappointing -0.2% for August while the July number was revised down to 0.3% from 0.6%. Lastly, industrial production came in at -0.9% as a result of Hurricane Harvey. Putting these, and other releases, all together resulted in the GDPNow falling to 2.2% as a forecast for the 3Q 2017 GDP.
September 12, 2017	This week Jamie Sumner, chief analyst, reviews the positive second estimate of the 2Q GDP along with the employment situation report. While the 2Q GDP was revised up to 3%, the employment report showed the number of jobs created in August 2017 falling to 156,000 and the unemployment rate increasing to 4.4% from 4.3% in July. Additionally, the employment situation report showed average hourly earnings up 2.5% from August 2016 which remains below the 3% historical average.
September 5, 2017	This week Jamie Sumner, chief analyst, reviews the positive second estimate of the 2Q GDP along with the employment situation report. While the 2Q GDP was revised up to 3%, the employment report showed the number of jobs created in August 2017 falling to 156,000 and the unemployment rate increasing to 4.4% from 4.3% in July. Additionally, the employment situation report showed average hourly earnings up 2.5% from August 2016 which remains below the 3% historical average.
August 2017
August 29, 2017	This week Jamie Sumner, Chief Analyst, discusses the historical quarterly growth rates of GDP and highlights the significant reduction in GDP growth post-2008 recession. Looking to the 3Q2017 GDP, the GDPNow forecast is projecting a growth rate of 3.4%. However, this forecast tends to be rather volatile and inflated in its early releases. Looking to GDP growth expectations for 2017 and 2018 the IMF and the FOMC continued to project growth rates in the low 2%. The continued sluggish growth rates and the geopolitical issues we are facing has kept the long end of the curve suppressed and that is expected to continue.
August 22, 2017	This week Jamie Sumner, chief analyst, reviews a sampling of economic releases from last week (week of August 14th). Most releases came in at or above consensus and are suggesting a good start to the 3Q numbers. However, there are still signs of low inflation and a continued period of low interest rates coupled with a narrowing yield curve.
August 15, 2017	This week Jamie Sumner, chief analyst, reviews how the U.S. Treasury curve has changed since the Fed started its tightening in December 2015 and then looks at various projections of how the curve might move over the next year…which all point to a continual narrowing of the slope of the curve. Moving onto the Fed Funds rate, we review the current implied probabilities of future rate hikes. Lastly, we cover the current national average CD curve and the most recent information from Bankrate.com.
August 8, 2017	This week Jamie Sumner, chief analyst, reviews the 2Q 2017 results of the community bank benchmark group. Overall, returns have increased during the 2Q lead by an increase in net interest margin and an improvement in net overhead. However, the upward trend in the level of cash-type deposits has begun to level out which could result in an increase in cost of funds if depositors appetite turn more toward time deposits. As for the balance sheet, loan growth continues to outpace asset growth resulting in higher loan to asset ratios. Lastly, the benchmark’s S&B Total Risk Index median score of was little changed over the past year. This indicates little change in the overall risk for the benchmark group.
Aaugust 1, 2017	This week Jamie Sumner, chief analyst, covers the Fed statement from last week’s FOMC meeting. While the Fed did not raise rates their mentioning of implementing the balance sheet normalization program “relatively soon” likely points to a September start point especially given the 2Q 2017 GDP coming in at 2.6% for the advance estimate.
July 2017
July 25, 2017	This week Jamie Sumner, Chief Analyst, reviews the Housing Market Index which came in at 64 down from its June reading of 66 and below consensus of 68. Furthermore, Jamie reviews the housing permits and starts for June which both showed month-over-month improvements. However, the 2Q2017 totals are below that of the 1Q2017. Lastly, the Leading Economic Index is reviewed noting the continued upward trend in the year-over-year changes.
July 18, 2017	This week Jamie Sumner, Chief Analyst, reviews several releases from last week including the Small Business Optimism Index, Producer Price Index, Business Inflation Expectations Index, CPI and Retail Sales. Overall, last week's releases resulted in a reduction in the GDPNow forecast to 2.4%.
July 7, 2017	This week Jamie Sumner, Chief Analyst, reviews the June 2017 Employment Situation report. This month we had 222 thousand jobs created but a much larger influx into the labor force which resulted in an increase in the unemployment rate of 0.1% to 4.4%. Additionally, average hourly earnings increased 2.5% y/y coming in below consensus.
June 2017
June 27, 2017	This week Jamie Sumner, Chief Analyst, reviews the May 2017 Existing-Homes sales and the New Residential Sales releases.
June 20, 2017	This week Jamie Sumner, Chief Analyst, reviews the FOMC Statement from their June 13th - 14th Fed meeting and shares about the fed's process of normalizing its balance sheet.
June 13, 2017	This week Jamie Sumner, Chief Analyst, reviews the expectations of the June 13th - 14th Fed meeting and the May 2017 ISM index for manufacturing and non-manufacturing.
June 6, 2017	This week Jamie Sumner, Chief Analyst, This week Jamie Sumner, Chief Analyst, reviews the May 2017 Jobs report.
May 2017
May 30, 2017	This week Jamie Sumner, Chief Analyst, reviews the second estimate of the 1Q 2017 GDP which was revised to 1.2% from the advance estimate of 0.7%. Additionally, Jamie comments on the May 26th GDPNow which is forecasting a 3.7% GDP for the 2Q 2017.
May 23, 2017	This week Jamie Sumner, Chief Analyst, reviews the Manufacturing Business Outlook Survey released by the Federal Reserve Bank of Philadelphia along with the business conditions survey put out by the Chicago Fed. Additionally, Jamie reviews the Index of Leading Economic Indicators and month over month movements in retail sales.
May 16, 2017	This week Jamie Sumner, Chief Analyst, reviews the concept and calculation of the marginal cost of deposits. The marginal cost of deposits is an important concept as it helps you to determine the most cost-effective way to fund asset growth.
May 9, 2017	This week Jamie Sumner, Chief Analyst, reviews the 1Q2017 results of the National Community Bank benchmark of banks with assets between $100 million and $5 billion.
May 2, 2017	This week Jamie Sumner, Chief Analyst, reviews the 1Q2017 Advance Estimate GDP release and covers both the positive and negative aspects of the 1Q GDP results.
April 2017
April 25, 2017	This week Jamie Sumner, Chief Analyst, reviews the 2016 Seifried & Brew Top 15th Percentile Banks release. Jamie explains how these banks made it onto the list and delves into some of the key statistics of the top 15th percentile group compared to those banks that are not on the list. Congratulations to all the banks that have made it onto the list!
April 18, 2017	Jamie Sumner, Chief Analyst of Seifried & Brew LLC, reviews the FRB of Philadelphia’s January 2017 Coincident and Leading index maps, both pointing to continued growth but at a decreasing rate of change. Additionally, Jamie covers the Atlanta Fed’s survey of business inflation expectations, the CPI release and the release of retail sales. Overall, these releases point to lower than expected inflation and retail sales. As such, the GDPNow was revised down to a projected growth rate of 0.5% for the 1Q2017.
April 11, 2017	This week Jamie Sumner, Chief Analyst, reviews the Employment Situation Report, the 3rd estimate of the 4Q 2016 GDP and the most recent GDPNow release.
April 4, 2017	This week Jamie Sumner, Chief Analyst, reviews the importance of being informed about deposit rates and outflows as well as alternative funding interest rates.
March 2017
March 28, 2017	Jamie Sumner reviews the importance of understanding and aligning your ALM model assumptions with the current interest rate environment.	NA
March 21, 2017	Jamie Sumner reviews the FOMC's Projections from their March 2017 meeting.
March 14, 2017	Jamie Sumner reviews the February Employment Situation Report.
March 7, 2017	Jamie Sumner reviews the Second Estimate of the 4Q 2016 GDP.
Fedruary 2017
Feb. 28, 2017	Jamie Sumner reviews the housing market releases for January 2017.
Feb. 21, 2017	Jamie Sumner highlights the changes in the Community Bank Benchmark’s Total Risk Index for the 4Q 2016 and covers some positive economic releases from last week.
Feb. 14, 2017	Jamie Sumner reviews the 4Q 2016 performance of the community bank benchmark group.
Feb. 7, 2017	Jamie Sumner covers the December 2016 State Coincident Map and the Leading Index Map released by the Federal Reserve Bank of Philadelphia. Additionally, Jamie briefly comments on the January Jobs report.
January 2017
Jan. 31, 2017	Jamie Sumner, Chief Analyst, reviews the advance estimate of the 4Q 2016 GDP.
Jan. 23, 2017	This week Jamie Sumner, Chief Analyst, reviews average deposit rates and the beginning of the baby boomers needing to take mandatory withdrawals from their tax-sheltered accounts. This may prove to be an opportunity for community banks to service this sector of our population over the next several years.
Jan. 17, 2017	Jamie Sumner, Chief Analyst, reviews Retail Sales, Business Inventories and Consumer Sentiment.
Jan. 9, 2017	Happy New Year! Jamie reviews the LMCI as well as the Philadelphia Fed's Leading Index.
December 2016
Dec. 19, 2016	Kyle and Jamie walk through the FOMC materials released last week and would like to wish everyone a safe and enjoyable holiday.
Dec. 12, 2016	Kyle shares the ISM Semiannual Forecast and CME Group information that indicate future sentiment.
Dec. 05, 2016	Jamie and Kyle present two graphs and a chart showing the significant shift in the Treasury and Municipal bond markets.
November 2016
Nov. 28, 2016	Jamie and Kyle share last weeks strong consumer sentiment results and the newly released Second Estimate GDP.
Nov. 21, 2016	This week Kyle shares some Nielsen data that indicates which geographies are expecting growth in household income.
Nov. 14, 2016	With fresh 3Q2016 results, Kyle shares two slides that detail the rapid loan growth at community banks and how these loans are funded.
Nov. 07, 2016	Kyle details last weeks FOMC statement, the LMCI and the likelihood of a December rate hike.
October 2016
Oct. 31, 2016	Jamie and Kyle take a lighter look at the FOMC decision and share a San Francisco Fed game that lets you adjust short term rates to keep the economy on track.
Oct. 24, 2016	Kyle focuses on comments made by Federal Reserve Bank of St. Louis President, James Bullard, especially his thoughts on matching Fed Funds rate utilizing the Taylor Rule.
Oct. 17, 2016	There has not been much talk with respect to capacity utilization, but this week Kyle shares some insight on why the indicator is not indicating a strong expansion.
Oct. 11, 2016	Kyle comments on the continually negative results of the Fed's Labor Market Conditions Index.
Oct. 3, 2016	This week Kyle directs viewers to the FDIC's Summary of Deposits website which received its annual update this past Friday.
September 2016
Sept. 26, 2016	Jamie and Kyle take a lighter look at the FOMC decision and share a San Francisco Fed game that lets you adjust short term rates to keep the economy on track.
Sept. 19, 2016	Jamie and Kyle share rate hike probability charts and review what recent economic data could mean during the upcoming FOMC meeting.
Sept. 12, 2016	This week Kyle reviews voting FOMC member Lael Brainard's recent speech on the five components of the "new normal."
Sept. 6, 2016	This week Jamie and Kyle look at the new employment data, including the LMCI. They consider how it will play into the FOMC's next meeting.
August 2016
Aug. 29, 2016	After Janet Yellen's comments at Jackson Hole, Kyle shares some key leading indicators to help monitor the likelihood of a rate hike.
Aug. 22, 2016	Jamie joins Kyle to continue part 2 of our series about the many ways that S&B analyzes community banks. This week we review competitor analysis by going over a sample Performance Risk Essentials with Competitor Watch.
Aug. 15, 2016	This week Kyle takes a brief look at an actual S&B Snapshot Report for a Sample Bank. This begins our several part series summarizing the many ways that S&B analyzes community banks.
Aug. 8, 2016	Kyle returns to share trends in loan quality and some of the newly available second quarter 2016 banking benchmark data.
Aug. 1, 2016	Jamie breaks down last week's GDP results.	Not Available
July 2016
July 25, 2016	Kyle takes a look at the national housing market by reviewing home sales trends.
July 18, 2016	Kyle shares his recent experience working with the Google AdWords team to improve the S&B site's web presence and how community banks can benefit from such a service.
July 11, 2016	Jamie and Kyle present key metrics of employment and what they could mean for a future rate hike.
July 5, 2016	This week Kyle shares the current Treasury yield curve and discusses flight to quality in the bond market. He also shares some recent examples of communities effecting change.
June 2016
June 27, 2016	J.C. Brew, Senior Municipal Bond Analyst shares insight on our rating process by reviewing the financial status of the City of Chicago based on 2014 fiscal year end CAFR.
June 20, 2016	Jamie and Kyle comment on last week's FOMC meeting and where the market sees rate hike probabilities.
June 13, 2016	This week Kyle shares a global perspective on interest rate movements over the past year.
June 6, 2016	This week Jamie and Kyle present the Federal Reserve Bank of Philadelphia's newest maps. They also comment on the concerning trend in LMCI.

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