PORTFOLIO MANAGEMENT MAKING A LIST, CHECKING IT TWICE By JIM REBER, CPA, CFA, President and CEO, ICBA Securities Since we started seeing Halloween decorations in August, I felt it was high time we started thinking about the holiday season. More specifically, as it relates to community banking. And still more specifically, about a checklist for the balance sheet. There are some seasonal items that bear attention prior to, and immediately after, year-end. So let’s take a look at what may be on the radar for the fourth quarter. Gain/Loss Harvesting I have the same access to industry-wide bank performance reports that any of you do, and I also make it a point to ask bankers how their years are going while traveling the country. The numbers and the commentary have been in sync this year, which isn’t always the case. It sure looks like 2025 is going to conclude favorably for community banks in general. By extension, that means a lot of you are going to be ahead of budget. That happy dynamic will naturally lead management teams to consider options for fine-tuning their earnings. There are some current variables that give bankers a lot of flexibility in timing their income recognition. For example, the average bond portfolio has a market loss of about 5%, which is the lowest percentage since March 2022. This means that some individual positions have gains, and some have losses. So there are probably some combinations of sale candidates that can produce the desired amount of realized income/loss. A friendly reminder: If your bank is looking for gains, make sure they are not from tax-free bonds. This brings up a related activity … Year-End Is Approaching. Here Are Some Seasonal Reminders. 8 NEBRASKA INDEPENDENT BANKER
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