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Record W340473716

Any Rx for the NIM Squeeze? (Special Report)

2002· article· en· W340473716 on OpenAlex
Steve Cocheo

Why this work is in the frame

A frame that forgets how it found something cannot be audited. These are the routes that admitted this work.

aboutThe title or abstract carries a Canadian signal from the geographic lexicon.
no affNo Canadian affiliation: this work is invisible to an affiliation-only frame.
No Canadian affiliation. An affiliation-only frame, the usual design, would never have seen this work. It is one of the works that make the case for inverting the frame.

Bibliographic record

VenueABA banking journal · 2002
Typearticle
Languageen
FieldEconomics, Econometrics and Finance
TopicBanking stability, regulation, efficiency
Canadian institutionsnot available
Fundersnot available
KeywordsLoanChorusInterest rateAsset (computer security)Net interest marginQuarter (Canadian coin)CollateralEconomicsBusinessEconomic historyFinanceHistoryArt
DOInot available

Abstract

fetched live from OpenAlex

A decade ago, when Home Savings Bank introduced interest-rate caps and floors to many of its borrowers, Howard Boyle's top concern was that the bank might be losing upside potential for the seemingly secondary advantage of being able to limit how far a floating-rate loan's rate could drop. We were actually more concerned about seeing market rates go in the other direction-up, says Boyle, president and CEO of the $99 million-asset institution, based in Kent, Ohio. At the time, rates were in the range of 9%10%, but Boyle remembered the 1980s, when business and mortgage loan rates in the mid-to-high teens were common. Who would have thought that prime would be as low as it is today? asks Boyle. Despite Boyle's early worries, Home's now longstanding cap-and-floor policy has stood the course well, especially under recent conditions, helping to preserve the bank's net interest margin at a time when many other community banking institutions are feeling the effects of net interest margin compression. search of solutions without dangers Shrinking NIMs have been plaguing community banks for some time, with the chorus of pain reaching its highest pitch this fall and into the winter. We knew we were asset-sensitive, but it really came home to us when the Fed dropped rates in the first says David Gohn, chairman and CEO, West Plains Bank and Trust Co. Our first quarter was the worst first quarter in 15 years. Since then, the $164.9 million-assets Missouri bank has been fighting back, particularly by readjusting rates on interest-bearing transaction accounts. After dipping to a margin of 3.71%, the bank is back up to 3.87%. It's almost enough to make some older bankers teary-eyed for the days of Regulation Q and usury laws, when much of banking was robotic, with NIMs virtually legislated in. Days that are long, long gone. the third quarter, the average margin for banks with less than $100 million in assets remained unchanged from second-quarter levels at 4.26%-although that level was the result of four successive quarterly drops, according to FDIC's latest Quarterly Banking Profile. Compare this to 4.59% in the third quarter of 2000 for the same banks and you get the idea of the squeeze. In the current rate environment, they are going to have to grin and bear some of the shrinkage, warns David Burns, Philadelphia-based partner in the financial services institution practice of Grant Thornton, the accounting firm. Burns says one of the greatest risks banks face in the current period is trying to make up for shrinking NIMs by over-reaching on the credit side of the balance sheet. We've been talking with community bankers, consultants, and accountants around the country to assemble a cross-section of potential remedies your bank can try. There are no magic bullets, says Daniel Trigg. In fact, banks should not overreact to what's been happening in the marketplace, because it's probably an anomaly, says Trigg, who is national financial institution practice director, RSM McGladrey Inc., Bloomington, Minn. / Caps, floors, and prepayment penalties Rate floors, aside from swaps and other moves that are not too popular among community banks, are probably the closest things to a pure solution. Floors-with penalties-go right to the heart. So it's not surprising some bankers who hear about caps and floors stifle a snort. Never sell that in my market, they scoff. Others say it alienates good accounts - and their friends. So how do bankers who say they have successfully worked caps and floors into their loan documents manage the feat? Success hinges on willingness to make the case to prospective borrowers, they say, and to lose the occasional loan to competitors. It all depends on how well your bank deals with its clients and how well it serves their needs, explains Clarence Jones, president and COO, Farmers & Merchants State Bank, Boise, Idaho. …

Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.

Full frame distilled prediction

Teacher imitation

Not calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.

metaresearch head score (Codex)0.002
metaresearch head score (Gemma)0.001
Version: codex-gemma-dda1882f352aValidation status: machine_predicted_unvalidated
Candidate categoriesInsufficient payload (model declined to judge)
Consensus categoriesnone
DomainCandidate signal: none · Consensus signal: none
Study designCandidate signal: Theoretical or conceptual · Consensus signal: none
GenreCandidate signal: Empirical · Consensus signal: Empirical
Teacher disagreement score0.492
Threshold uncertainty score0.997

Codex and Gemma teacher scores by category

CategoryCodexGemma
Metaresearch0.0020.001
Meta-epidemiology (narrow)0.0000.000
Meta-epidemiology (broad)0.0000.000
Bibliometrics0.0000.000
Science and technology studies0.0010.000
Scholarly communication0.0000.000
Open science0.0000.000
Research integrity0.0000.000
Insufficient payload (model declined to judge)0.0040.000

Machine scores (provisional)

The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.

Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.

Opus teacher head0.038
GPT teacher head0.239
Teacher spread0.201 · how far apart the two teachers sit on this one work
Validation statusscore_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it