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The Bank of Moulton. Strategy. Community Cosumer Bank: Local Deposits Local Loans servicing consumer and small business lending

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Presentation Transcript
strategy
Strategy
  • Community Cosumer Bank:
    • Local Deposits
    • Local Loans servicing consumer and small business lending
  • Service all customers while concentrating on loans to Retail clients with deposits from both commercial and retail clients, and increase Branching  Trust, Fin’l Services
  • Use Jumbo CDs to strategically to finance specific needs  Financial Slack
  • Rely on core deposits to finance bank, make loans and hold investment portfolio
  • Concentrate on being profitable, NOT BIG!
strategy levers and performance
Strategy Levers and Performance
  • Move out of Jumbo CDs, use for strategic needs
    • 1.4 Assets $4.90 billion
    • 1.4 CDs $950 million
    • 1.4 MM Svgs $1.7 billion
    • 2.4 Assets $3.96 billion Less CDs:
    • 2.4 CDs $87.1 million Sold RE Portfolio
    • 2.4 MM Svgs $1.92 billion & Synd Loans
    • 3.4 Assets $5.11 billion
    • 3.4 CDs $719.5 million Lns $3.5b  $2.2b
    • 3.4 MM Svgs $2.16 billion Secs. $1b  $2.5b
strategy levers and performance1
Strategy Levers and Performance
  • Move out of Jumbo CDs
  • Shift focus to High, Medium and Consumer Loans
    • Effec Int Rates vs. Spd + COF indicates High, Med  70-30 Target
    • 25%  in Desired; 25%  in Undesired;
    • Reduce R/E Holdings to lower fund’g, but Svc!
    • Reduce Synd as not Local Business loans
    • 1.4 3.4 R/E -78%, Prime -22%, Synd -89%
    • 1.4  3.4 H -18%, M -6%, Cons. -2%, CC -13%
    • Watch PLL vs. Charge-Offs
strategy levers and performance2
Strategy Levers and Performance
  • Move out of Jumbo CDs
  • Loans to Desired Customers (H, Med and Cons.)
  • Concentrate on being profitable
    • ROE slows into ROA as Lev dropping.
      • ROE in the 20-25% range
      • Lev dropping due to Earnings; Cap Adeq at 1.40
    • ROA Inc’g
      • ROA in 1-2% range
    • Adjmt. To RE and Futures shows Hedging, but also timing errors
slide9

C/A =

7%

C/A =

5.5%

Peak, Sold

Fut. When

Int. Rts. 

slide10

Peak

Trough

slide11

Sold R/E

Loss on Futures

plans for the future
Plans for the Future
  • Concentrate on Spread & Burden
    • Stay away from expensive funds and reconsider Invmts.
    • Consumer Loans and Svcs. (40 Branches  50 by 5.4)
      • Watch Temporary Employee Expense!
      • Work on CC Procssg.
    • Focus on Provision for Loan Losses (Loan Policy)

(Lately PLL/Lns < ChgOff/Lns!)

  • Continue to attract Consumer Loans, but don’t lose all Comm’l customers (Loans and Core Dep.)
  • Continue to consider rate diff. in fund’g and invmt.
  • Repurchase more Equity/Cap Nts. to manage Capital Adequacy and Leverage: Cap Adeq 1.15, C/A=6.7%.