Independent Banker - March 2025 - 36

PORTFOLIO PORTFOLIO MANAGEMENT
Grab some windows of opportunity
A steeper yield curve brings growth strategies back into the fold. By Michael Benedict, Stifel
he saying " Make hay while the
sun shines " might not seem
seasonally appropriate until days grow
longer and sunlight pours down in
abundance, but the guiding principle
behind the saying-capitalize on
windows of opportunity before the
opportunity passes-can be applied
any time of year.
One of the goals of this column is to
identify some of those opportunities
and when windows to pursue them
are open. Though there are certain
similarities with prior years, 2025 has
started off with a very different set of
opportunities than the recent past.
Of course, reference point matters.
T
While the current environment differs
meaningfully from the past several
years, there are very few interest rate
environments that seasoned managers
haven't seen before.
However, given that the yield curve
was inverted-with yields on shortterm
investments higher than yields
for longer-term investments-for
more than two years, the strategy
playbook for a steepening yield curve
environment may feel like a distant
memory. Despite having gathered
some dust, the evolution of the yield
curve over the past several months has
made growth strategies (also known as
leverage strategies) viable again.
Why now?
To address the elephant in the
room, the yield curve can hardly be
considered " steep " from a historical
perspective. At the time of writing,
the 2s/10s Treasury spread, a widely
followed metric that measures yield
curve slope, sits at about 40 basis
points (0.40%). This is a considerable
increase from its recent low of -108
basis points (-1.08%) but remains
well below its long-term average of
roughly 100 basis points (1.00%).
However, most growth strategies
pursued by community banks do
not invest proceeds in the Treasury
market. Return targets for such
36 // ICBA Independent Banker // March 2025
Photo by Raymond Forbes LLC/Stocksy

Independent Banker - March 2025

Table of Contents for the Digital Edition of Independent Banker - March 2025

Independent Banker - March 2025 - Intro
Independent Banker - March 2025 - Cover1
Independent Banker - March 2025 - Cover2
Independent Banker - March 2025 - 1
Independent Banker - March 2025 - 2
Independent Banker - March 2025 - 3
Independent Banker - March 2025 - 4
Independent Banker - March 2025 - 5
Independent Banker - March 2025 - 6
Independent Banker - March 2025 - 7
Independent Banker - March 2025 - 8
Independent Banker - March 2025 - 9
Independent Banker - March 2025 - 10
Independent Banker - March 2025 - 11
Independent Banker - March 2025 - 12
Independent Banker - March 2025 - 13
Independent Banker - March 2025 - 14
Independent Banker - March 2025 - 15
Independent Banker - March 2025 - 16
Independent Banker - March 2025 - 17
Independent Banker - March 2025 - 18
Independent Banker - March 2025 - 19
Independent Banker - March 2025 - 20
Independent Banker - March 2025 - 21
Independent Banker - March 2025 - 22
Independent Banker - March 2025 - 23
Independent Banker - March 2025 - 24
Independent Banker - March 2025 - 25
Independent Banker - March 2025 - 26
Independent Banker - March 2025 - 27
Independent Banker - March 2025 - 28
Independent Banker - March 2025 - 29
Independent Banker - March 2025 - 30
Independent Banker - March 2025 - 31
Independent Banker - March 2025 - 32
Independent Banker - March 2025 - 33
Independent Banker - March 2025 - 34
Independent Banker - March 2025 - 35
Independent Banker - March 2025 - 36
Independent Banker - March 2025 - 37
Independent Banker - March 2025 - 38
Independent Banker - March 2025 - 39
Independent Banker - March 2025 - 40
Independent Banker - March 2025 - 41
Independent Banker - March 2025 - 42
Independent Banker - March 2025 - 43
Independent Banker - March 2025 - 44
Independent Banker - March 2025 - 45
Independent Banker - March 2025 - 46
Independent Banker - March 2025 - 47
Independent Banker - March 2025 - 48
Independent Banker - March 2025 - 49
Independent Banker - March 2025 - 50
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Independent Banker - March 2025 - 54
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Independent Banker - March 2025 - 65
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Independent Banker - March 2025 - 67
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Independent Banker - March 2025 - 69
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Independent Banker - March 2025 - 77
Independent Banker - March 2025 - 78
Independent Banker - March 2025 - 79
Independent Banker - March 2025 - 80
Independent Banker - March 2025 - Cover3
Independent Banker - March 2025 - Cover4
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