Our on-going analysis of the deposit dilemma shows some good news for community and regional banks, based on 2019 third-quarter data. But trouble still looms.
The Business Case for a Careful Consideration of the Community Bank Leverage Ratio
We have been preaching for two months that community banks must take seriously the decision whether to opt into the Community Bank Leverage Ratio (“CBLR”). Our analysis suggests that it would be damaging to the vast majority of...
Boards Take Note: The CBLR Mandates a Thorough Exploration of Capital Impact
As third-quarter 10-Qs roll into the Securities and Exchange Commission, one thing stands out: Most public banks are contemplating whether it makes sense to opt into the new community bank leverage ratio framework. The new rule,...
Connecting the Dots: What Repo Market Turbulence Means to Community Banks
September’s repo market problems were front page news. But until JPMorgan Chase CEO Jamie Dimon spoke up last week, no one knew why the banks did not step in as rates kept increasing, even though they had excess reserves. The...
Stress Capital Before Opting into the New Community Bank Leverage Framework
Note to community bank execs: The clock is ticking on how you calculate your capital requirements. The FDIC this week finalized the new 9 percent community bank leverage ratio, and it goes into effect in January for most banks...
Deposits Becoming a Zero-Sum Game for Community Banks
The growing deposit crisis for community banks is not going away. The problem is a strategic issue—and easy money policies only buy banks time, they don’t solve the dilemma. Invictus Group’s proprietary analytics, powered by...
Deposit Wars: A Breakdown of Key Trends in the First Quarter of 2019
Deposit growth in the banking industry has become a zero-sum game for all intents and purposes. Several months ago we published a white paper that revealed the deposit dilemma appeared more serious than anticipated, based on 2018...
When it Comes to Valuation, it’s the Quality of Your Bank Earnings that Count
The quality of a bank's earnings has an overlooked impact on valuation, according to an Invictus Group analysis of publicly traded bank stocks. We all know that trading multiples of publicly traded banks are driven by asset size...
A New Kind of Relationship Banking
A hundred years ago, community banks relied almost entirely on relationship banking. Lenders knew the borrower personally, which provided a unique customer experience, allowing each bank to carve out its own local niche. Not only...