Correspondent Blog

Is April 30th a Realistic Target? Now that all but the most recalcitrant states have opted for some form of stay-at-home order the U.S.’s number of reported COVID-19 cases should start to level off, but the trajectory this week and next will most likely still be upwards. The latest lockdown actions will exacerbate the economic…

We were expecting bad job numbers in March but not the horrific numbers we’ll see next month. That’s because the survey for the March jobs report occurred on March 12 and that was when the weekly jobless claims jumped a pedestrian 282,000. The subsequent weekly claims hit 3.3 million and 6.6 million yesterday so the…

We suppose it’s possible to have an uglier quarter to personally live through, but from a national perspective the collective financial and personal experience of the first quarter of 2020 certainly puts it in the running for Worst Quarter Ever. Good bye and good riddance. Here are some numbers for you:  from the S&P’s all-time…

We have been writing on the various strategies available to community banks when structuring commercial loans in this current challenging business and credit environment. With the flat and low yield curve, we have discussed how banks may offer commercial loans through the ARC hedge program using two different strategies: 1) embedded floors, and 2) forward…

Go to any Trader Joe’s market and then go to a competing market, and you will be likely to find a significant difference. Trader Joe’s has produced a COVID-19 response that is thoughtful, practical, relatively inexpensive, and caring. From their increased staffing to their small gestures like a preferred senior’s line, the handing out of…

More Fiscal Bills to Come? Now that the U.S. has surpassed China in the number of reported COVID-19 cases, and the trajectory still scarily upwards, calm talk from the administration won’t be sufficient to keep markets from starting to price in more dire scenarios for both the death toll and the economic hit. That is…

When the Chairman of the Federal Reserve takes it upon himself to appear on the ever-popular Today Show, you know you’re living through unique times, but that’s where we find ourselves. The money quote from Powell was “not to worry about the Fed running out of money.” That tells you they will be all-in and…

While the Fed jumped into the unfolding crisis with both feet, investors have been nervously awaiting the details of a fiscal stimulus package out of Congress, and we finally got one yesterday evening. With the $2 trillion package agreed to but still awaiting formal passage, the risk-on mood was strong with stocks anticipating the deal…

Last week we took a look at why and how bankers must triage their credit portfolio first before taking action. We also looked at some initial restructuring steps banks can take in a related article. In today’s article, we model a $1B commercial loan portfolio and look at what could happen to probabilities of defaults,…

The impact of coronavirus on community banks will be widespread, and, with some borrowers, the restructuring efforts may take a long time and will sap substantial bank resources. Even as bankers are exerting time and effort to help some borrowers stay in business and continue to service their bank debt, other borrowers are looking for…

Since their emergency rate cut last Sunday the Fed has been hyperactive in instituting new programs in order to provide liquidity and apply some cushion to the economic fall.  The Fed quickly grasped the gravity of the situation and the coming dive in economic output with an array of programs that we thought/hoped we wouldn’t…

How To Create A High Performing Bank With An Employee Handbook Let’s be honest. Your bank employee handbook is probably a snooze-fest. If you are like most banks, your employee handbook was likely cobbled together from a template given to you by a third-party human resources firm or a revision of another bank’s handbook. Chances…