20 HќќѠіђџȱ юћјђџ юѦȱ2014 Continued from page 18. marginally higher yields of longterm, callable agency debentures are now facing the unpleasant realization that call options don’t always get exercised. They have put themselves in the awkward position of having to explain to the rest of the household ȱȱȱȱȱĚ ȱȱ ȱ supposed to be coming in may not be here for a while … like maybe 10 years. Oh, yeah, and duration has now quadrupled, and our heretofore modest economic value of equity ǻ Ǽȱ¢ȱȱȱȱĴȱ excessive … like policy-breaching excessive. Oops! The list of potential bad actors also includes certain kinds of mortgage-backed securities (MBS) and collateralized mortgage obligations (CMOs), the pre-payment characteristics of which have become drastically altered by rising mortgage rates. While space does not allow for a thorough discussion of the universe of mortgage-backed securities, portfolio managers should remember that not all MBS are created equal, and doing one’s homework regarding the characteristics of the underlying loans can go a long way toward ȱȱȱěȱȱ ¡ȱȬĚ ȱ¢ȱȱ the resulting risks to average life extension or contraction. The investment portfolio, when managed properly, can be your best friend as you try to satisfy the needs and requirements of unintentionally uncooperative customers, while at the same time managing the interest-rate ȱęȱȱȱȱǯȱ ȱ if investment decisions and security selections are carried out as if in a vacuum, your bank’s road to domes- ȱȱȱȱȱĴȱ¢ǯȱȱȱ Nancy Bicknese, iAB Financial Bank, FortWayne, has been recognized for 25 years of service with the bank, which she joined in 1989 at ȱ ȱĜȱȱȱȱ service representative. She since has served in several capacities, including supervisor in accounts management. Bicknese currently works in the customer service call center. She has been in banking for more than 45 years and is a member of the Indiana Bankers Association Forty Year Club. Tracy Jones, vice president, controller of West End Bank, SB, Richmond, has completed 20 years of service. ANNIVERSARY MILESTONES $ VDOXWH WR EDQNHUV ZLWK years of service Consultants to the Financial Industry Young & Associates, Inc. Liquidity Planning Strategic Planning Regulatory Assistance Stock Valuations Capital Markets Expansion & De Novo Bank Charters Internal Audit Information Technology Recruitment & Human Resources Lending & Loan Review Compliance Policy Development Serving Community Banks Since 1978
RkJQdWJsaXNoZXIy MTg3NDExNQ==