Pub. 15 2020-21 Issue 6

NEBRASKA BANKERS ASSOCIATION 23 In 2021, the margin compression fight has shifted more heavily toward maintaining asset yields as most community bankers have cut their cost of liabilities back down to historic lows. If quality loan demand comes back soon, everyone will be ready. However, if deposit growth continues to outpace loan growth, we need to stay fully invested within the bond portfolio. The recent steepening of the yield curve has made bond yields a little more attractive. Yes, we get it; recent bond yields are lower than the good ole days, but remem- ber to compare current bond yields to what holding cash earns (usually around eight-to-10 basis points). The yields on our short-term cash liquidity move in sympathy with the Fed, and it is highly unlikely the Fed will be moving their benchmark rate anytime soon. Since the Fed cut rates back to zero last March and the first liquidity wave began, it has remained costly to sit in too much cash liquidity. The bank- ing environment continues to change rapidly, and it can be a daunting task to keep up; however, staying fully deployed should continue to remain at or near the top of senior man- agement objectives.  Dale Sheller is Senior Vice President in the Financial Strategies Group at The Baker Group. He joined the firm in 2015 after spending six years as a bank examiner with the Federal Deposit Insurance Corporation. Sheller holds a bachelor’s degree in finance and a master’s degree in business administration from Oklahoma State University. He works with clients on interest rate risk management, liquidity risk management and regulatory issues. Contact: 800-937-2257, dsheller@GoBaker.com . through births and broken bones; tests, treatments and triumphs. Learn more about our plans at nebankers.org An independent licensee of the Blue Cross and Blue Shield Association. THERE WITH YOU Safer, More Efficient Management of the Appraisal Process MOBILE APPRAISAL SOLUTIONS • Safe Mobile Appraisal Solutions • Practice Social Distancing • Keep the Lender Pipeline Moving • Appraisal Report Delivered to Lender • Exterior Inspection by Appraisers – Homeowners Take Interior Photos Use Verisite’s Mobile Inspection Tools on purchase and refi loans and sub-loan products, such as home equity loans, disaster relief inspections, new construction progress evaluations, and portfolio reviews. Confirm completed insurance repairs and validate internal and external property conditions. Contact Lee Volmer | (402)714-0856 lee@creditinfosystems.com