Independent Banker - December 2021 - 31

big wave of deposits which showed
up last year just won't go away. And
even though we're paying next to
nothing for them, it's had the eff ect of
making our balance sheet positioned
for rising rates. "
" If that's the case, then I wouldn't
worry about some selective extensions of
your investments. Your overall earnings
will be better if rates rise, which isn't
a given. And that brings up another
point I've been making to community
bankers this fall: Don't be so proud of
your unrealized gains. What that means
by defi nition is that interest rates have
fallen since you bought your collection
of bonds. And since you've told me
you're asset sensitive, that means margin
compression, so I would embrace a
modest loss in my bond portfolio. "
" Jim, at the moment our portfolio
is a little under water since rates have
risen in the past few months. What do
I do next?
" Your brokers can identify those
which are the best candidates for sale.
Economically the most effi cient are
often those that are shorter, or maybe
you have some MBS pools that have
smaller block sizes. And circling back
to municipals, those with maturities of
less than 10 years often have market
prices that are propped up by retail
investors. But be careful: Tax-free
munis are the last ones you want to sell
at gains. "
" Jim, this helps a lot. I'm getting
on this project right now. And you've
made me feel better about taking
losses, and extension swaps. It turns
out that 2021 has been a better year
than anyone would have thought at
the start. "
" Charlie, it's always a pleasure. And
don't think for a minute that taking
losses is 'admitting defeat.' I think
it's responsible, proactive portfolio
management. And congratulations for
piecing together another successful
year at Community Trust Bank. " 
DECEMBER 7
3 ET / 2 CT
Improving the
Technology in
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Jim Reber, CPA, CFA (jreber@
icbasecurities.com), is president
and CEO of ICBA Securities, ICBA's
institutional, fixed-income brokerdealer
for community banks
Epson has unique
solutions that help enable
your branches to reach
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Education on Tap
Quarterly bank industry update
Vining Sparks' Marty Mosby presents his quarterly Bank Advisory
and Strategic Services webinar on Dec. 9 at 10 a.m. Central. Bank
profitability, industry risk and the M&A environment will be discussed.
One hour of CPE is off ered. Visit viningsparks.com to register.
Webinar series for 2022
ICBA Securities and its exclusive broker Vining Sparks have
concluded a successful Community Banking Matters webinar series.
These events have proven very popular among community bankers,
and we are planning the 2022 series. If you have topics that you
would like to see covered, please contact me or your Vining Sparks
sales rep.
Join us to learn more and
see how Epson technology
can help you better serve
your customers.
REGISTER TODAY!
To register and view our full
library of free on-demand
webinars, visit the Independent
Banker Webinar Center at
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Independent Banker - December 2021

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