Reconn Radio: Podcast #12 – Week of 02/24/2014

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The Economy, Investment Services & Farewell to Spangler

This week, I discuss the economic items for this week. We also delve into investment services with our special guest, Joel Beck of the The Beck Law Firm. Joel brings a wealth of information on broker/dealers and general considerations in forming an investment business unit for your bank or credit union. You can learn more about Joel on his website, www.thebeckfirm.com, or follow him @brokerdefender. Finally, we say farewell to Harold Ramis. He has, indeed, crossed the stream. May he rest in peace.

 

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Reconn Radio: Podcast #11 – Week of 2/17/2014

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The Economy, EMV & “The American President”

This week, I discuss the upcoming economic items for this week. I also delve into EMV and remind folks of its pending entrance into the American market. Finally, we close with a timely discussion about “The American President,” one of my favorite movies, and about gaining perspective. Go!

 

 

 

To listen to more of our podcasts, then please click here.

Weather you are or not

The terrible practice of trying to predict the exact nature of weather has got to be stopped. Whether or not weather will bear down on you is a matter for Mother Nature. I understand the general discipline identifying the threat of rain, sun, snow, or sleet and all disturbances in between. But, the tortured analysis of predicting weather down to the lamppost is really unnerving. And yet we all watch it like rubberneckers on a freeway, and more graphically, like vultures circling around its kill.

It’s not that different from predicting the economy. An undetermined amount of effort goes into predicting the future of the economy. I understand. I even commiserate with those that tell fortunes for I studied that soupy, messy subject, too. A great deal of money changes hands in this process of prediction. What do we gain?

The point is preparation. The point is to remain calm knowing you have done all you can do to prepare. The unceasing tantrums over storms we cannot begin to control, be they atmospheric or economic, warrant a different type of scientist, a different approach. It requires men and women of mental equanimity and immeasurable integrity.

The weather? Even this too shall pass away. The economy? That’s a little more of a stubborn issue for our readers. Stay on top of the storm, but don’t be consumed by it.

For delivery of disciplined planning and project management, please drop us a line by clicking right here. Or, if you’re looking for a bright spot in your day, then call Beth at 908.368.1270.

Reconn Radio – Podcast #10 (Week of 02/10/2014)

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Bank consolidation. Maybe. Perhaps.

Liquidation. Other People’s Money. Maybe. No. Definitely.

This week on the radio program, we discuss the economy, bank M&A, and DeVito and Peck. We are into double digits here at Reconn Radio.

Go!

P.S. For more information on bank M&A activity, with those spiffy charts and graphs, check out the accompanying blog post here.

 

 

Bank Consolidation in this Millennium

The tragedy and comedy inherent in our banking system reminds me of a Steven Wright line: “You can’t have everything. Where would you put it?” Darn funny stuff from Mr. Wright.

The consolidation of banks, thrifts, and credit unions continues. Our curiosity got the best of us and we wanted to see how fast or how slow in terms of deals and values. The following charts highlight data on bank and thrift deals since 2000. All data is courtesy of our friends at SNL Financial.

Deals

The number of deals has actually slowed after the 2008 redux. That makes sense. Many deals in 2009 and 2010, as one can see in the second chart of the dashboard, were government-assisted deals. One can imagine that bankers are waiting on the sidelines in hopes of gaining higher and higher multiples. However, franchise value, from our perspective, will come from a couple of things: 1) size and 2) demonstrated leadership and technological/organizational nimbleness and scale. Furthermore, government-assisted deals are waning and doing so quickly. That’s a good sign. Institutional euthanasia is just wrong.

It has often been said that this industry is highly commoditized. We think that is a fair assessment. What strikes us as interesting is that no one really loses sleep if there are fewer institutions. It’s not really the same when compared to say gold bullion or copper plating. Panic sets in and prices rise.

Deals

 

Values

We’ve represented dollar value of deals in two ways below. The first, Total Deal Value, shows a pretty murky market. The Total Assets data speaks to the relatively small size of the institutions coming to the altar.

Values

We’d rather have something than nothing

Overall, there’s just not much action in the consolidation business right now. Ultimately, this should not keep FI executives from seeking out deals. We believe that there is growing demand for bigger and better. Scale economies mixed with the right assortment of service technology and outstanding human resources will win over customers.

It’s true. You can’t have everything. However, one can plan for the advent of just about everything – from force majeure to what is the correct path for your institution and its stakeholders. This doesn’t mean that one has to predict the future. That, after all, would be having everything and Mr. Wright has already demonstrated there’s no place for that.

For assistance looking at markets, operations, and financial impact for your community financial institution, give us a shout. Or, if you like, you can whisper our name in the wind. It all works. Call us at 908.368.1270 or complete our contact form here.

02/10/2014 – Our weekly perspective on the economy

The economy continues to show signs of uneasiness. Last week, we saw a surprising drop in the Institute of Supply Management’s Report on Business. What was most shocking to us, as pointed out by Marketwatch, was that we had, “the biggest one-month reversal in the new-orders index since December 1980.” The new-orders index is a component of the ISM. You can get to the ISM report here. This added to the already dower mood on Wall Street. The DJIA is down 3.96% since January 10, 2014, or approximately 650 points. Get the chart here.

This week brings more interesting news on the consumer confidence front as well as Janet Yellen’s testimony to both the House and Senate. More detail can be found on Marketwatch’s calendar here. We’ll keep you posted. Always keep one eye, or half an eye if you can manage it, on the macroeconomy.

Cheers!

Reconn Radio – Podcast #9 (Week of 02/03/2014)

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Reconn Radio brings you its second guest in as many weeks. Also, we’re announcing our joint venture with strategic partner Structure First. Please check out the headquarters planning and facility development collaborative at myhq1.com.

Go!