Independent Banker - January 2021 - 32

PORTFOLIO PORTFOLIO MANAGEMENT
What's next for investments?
Looking to make changes to your investments this year? Bond opportunities abound in 2021.
By Jim Reber, ICBA Securities
e've made it, you and I, through
a bizarre year. No more " 2020
vision " references, no national elections
and-hopefully-no moratoria on
business travel. But there's plenty of the
recent past for community bankers to
still contend with.
As we begin the calendar year, I
would think one of the top to-dos on
the lists of bond portfolio managers is
to wrestle with the swollen collection
of investments that began arriving in
March 2020 to ascertain whether it's
built out to your liking. If so, maybe
you now have a blueprint to continue
W
to invest and tweak in a manner
that complements your community
bank's balance sheet and risk profi le.
If not, opportunities proliferate.
This time last year, I suggested
that we may be in for some interest
rate stability. (We see how that
turned out.) This time around,
let's say that ifthere is some
rate stability, and some bond
swapping is in your best interest,
it's possible that all the benefits
to a well-structured trade can be
realized and any income effect
having nearly a full year to be
recognized. The remainder of this
column will discuss this and other
strategies that are on the table for
portfolio management.
Cushion paper galore
Whether you realize it or not, your
bank's bond portfolio already has a
fl oating-rate tenor to it, partly thanks
to the record-low interest rates we've
had lately. As of year-end, the average
bond owned by a community bank
has a book price of almost 103. And
that means that if rates ever get
around to increasing noticeably, your
32 Q ICBA Independent Banker Q January 2021
Photo by Nora Carol Photography/Getty Images

Independent Banker - January 2021

Table of Contents for the Digital Edition of Independent Banker - January 2021

Table of Contents
Independent Banker - January 2021 - Intro
Independent Banker - January 2021 - Cover1
Independent Banker - January 2021 - Cover2
Independent Banker - January 2021 - Table of Contents
Independent Banker - January 2021 - 2
Independent Banker - January 2021 - 3
Independent Banker - January 2021 - 4
Independent Banker - January 2021 - 5
Independent Banker - January 2021 - 6
Independent Banker - January 2021 - 7
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Independent Banker - January 2021 - Cover3
Independent Banker - January 2021 - Cover4
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