Articles

Michigan Banking Summary – Michigan Banks Answer the Call

May 21, 2020 - 7 min read

Through mid-May, the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) has approved more than 4.3 million loans nationwide, representing well in excess of $500 billion. The PPP initiative, with Congressional authorization to commit approximately $670 billion in funding to small businesses as part of the $2+ trillion CARES Act stimulus plan, was largely…

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Michigan Banking Summary – Pre-Coronavirus vs. Pre-Great Recession

April 21, 2020 - 14 min read

With the world’s attention, and understandably so, on any and every developing story related to the coronavirus pandemic, I thought I would take a quick look at a few underlying financial metrics that existed within the banking industry at year-end 2019, as compared to those same metrics just before the start of the Great Recession….

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Michigan Banking Summary – EPS Estimates Take a Backseat to CDC Forecasts

March 19, 2020 - 8 min read

Roughly a month ago, no one thought we’d be dusting-off “pandemic-oriented” contingency plans, but here we are. Seemingly weeks, or months, if not years of activity on multiple fronts (economic and social), feels like it has been condensed into a few days. The daily volatility in the markets is succinctly summarized in the chart below:…

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Michigan Banking Summary – A Tale of Two Economies?

February 26, 2020 - 5 min read

“It was the best of times. It was the worst of times.”  A Tale of Two Cities; Charles Dickens In recent months, I have opined on the sometimes-conflicting economic signals that the Market (and the Fed) have been trying to decipher in accurately forecasting what lies down the road. A decade long economic expansion that appears…

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Michigan Banking Summary – And David Reached Into His Pocket for a Stone . . .

December 16, 2019 - 8 min read

For years, market pundits have been forecasting the inevitable demise of the traditional community bank. As consolidation continues to shrink (and re-shape) the industry, statistics reveal that organizations below $1 billion in consolidated assets now make up a smaller percentage of chartered institutions, while also controlling a smaller percentage of industry assets in the process….

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Michigan Banking Summary – Uncertainty Appears to be the Only Thing that is Certain

October 26, 2019 - 6 min read

Geopolitical instability (Syria, North Korea, Venezuela, Hong Kong, Saudi Arabia, etc.); U.S. and China trade wars and tariff battles; here in Michigan, the ultimate impact and reverberations of the recently concluded (hopefully) GM/UAW labor strike; Brexit or Brex-not, and how that decision ripples through Europe; the potentially prescient nature of the 2yr/10yr inversion a couple…

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Michigan Banking Summary – East Meets West and North Heads South

September 26, 2019 - 5 min read

September 18th marked another notable day in Michigan banking, as shareholders at two in-state institutions involved in a pending merger approved their proposed union, while leadership at two other in-state banks announced plans to combine resources. Banking consolidation is nothing new, and most assuredly will continue. Considering recent statistics that reflect a universe that is…

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Michigan Banking Summary – Post Hoc Ergo Propter Hoc

August 16, 2019 - 8 min read

The title is a Latin phrase that effectively states, “after this, therefore because of this.” Succinctly, the reasoning that since event X followed event Y, then event X must have been caused by event Y. This informal fallacy is rooted in the belief that correlation is causation, consequently a conclusion based solely on the order…

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May Michigan Banking Summary – Transparency & Integrity, Redux

May 23, 2019 - 6 min read

As Q1 earnings release and annual shareholders’ meetings begin wrapping up, I’ve been approached by a few banks asking if I wouldn’t mind re-running a piece I first prepared a few years ago. The requests seemed to largely center on the desire to share with their management teams and/or directors the views of an objective…

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Michigan Banking Summary: The Noah Principle

March 22, 2019 - 6 min read

There is an old Wall Street saying that “Bull Markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria.” Clearly market volatility has picked up in recent months, as competing sentiments regarding uncertainty over global trade tensions and the potential implications of a chaotic Brexit duel with continued low unemployment…

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