Respond agreeing or disagreing to the following discussion, please elaborate and explain why: I cannot believe we
Question:
Respond agreeing or disagreing to the following discussion, please elaborate and explain why:
I cannot believe we made it this far. My team has tried so many things that will make our bank profitable and become more competitive with the others. It is hard to pin down what the best thing to do was since we have made so many changes in the last three quarters. But one thing we have been doing every quarter was selling our securities and purchasing new ones during high interest rates times. We started selling our securities because we knew that we would net a gain on those assets, however we mostly are selling the tax-exempt ones to minimize our tax burden. We have noticed that doing this has increased our cash items and has had a positive effect on our stock price and overall position. So, if we have securities that we can collect a gain on we would sell those. This week we also decided to sell some of the loans we have for gains as well. This just means we are locking in gains from those sales so that we can reinvest those into more loans and securities. Another thing we have been doing is focusing on two of the deposit accounts that make up the largest percentage of our deposits. So, we are mainly focused on personal savings and business checking. We have kept our fees for those accounts low to ensure we retain old depositors. But when we can we also start to offer higher interest rates as well. That does increase the interest expenses for our deposit accounts, but we have noticed that if we keep higher interest rates, we tend to have a larger ending balance in those accounts. Which means we can create more loans and purchase more securities. We have a cycle that seems to be finally working for our bank.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill