Pub. 13 2022 Issue 4

In science class, we were taught that pressure is the application of force against an object. As bankers, we think about pressure as it relates to interest rates versus our deposit rates. Today, bank presidents, CFOs, and other risk managers across the country are focusing on the impact of deposit rates to their cost of funds, net interest margin, and net income. In Asset/Liability Committee (ALCO) lingo, we refer to the deposit “beta” to describe the relationship between deposit rates and their sensitivity to the change in short-term interest rates. A higher deposit beta means higher rates, which lead to higher interest expenses and lower margins.

SR. Snodgrass, P.C., a full-service accounting and consulting firm known for its forward-thinking work with financial institutions, nonprofits and other businesses, has announced its acquisition of Zeno, Pockl, Lilly, & Copeland, A.C.

Baker Tilly was proud to sponsor and attend this year’s American Bankers Association (ABA) conference. This year’s conference was well-represented by banks across the nation that ranged in size from small family-owned community banks to large public institutions.

Between the pandemic and rising inflation and interest rates, the last two years have taken community banks on a wild ride. Rising inflation and the higher interest rates designed to bring inflation back to earth have influenced cash flow and the cost of goods, which can create financial stress for borrowers. Financial stress can lead to credit stress, a problem for community banks and their customers.

In the growing digital landscape, cyberattacks have become more prevalent, sophisticated, and damaging. For businesses relying on a strong working network, the cost of a cyberattack has never been higher. In 2021, IBM estimated that organizations spend more than $4 million on average for each ransomware attack or
security breach.

According to the Federal Bureau of Investigation (FBI), millions of elderly citizens are targeted annually with some form of financial fraud, and many of these attempts are successful. It has been estimated that seniors lose approximately $3 billion per year as a result of these scams, which are becoming more widespread and sophisticated.

The pandemic created a unique confluence of events that affected the lending market. As recently explored by the Federal Reserve, bank deposit growth soared during the pandemic, with total deposits increasing more than double the pre-pandemic growth rate.

In October 2022, the United States Court of Appeals for the Fifth Circuit ruled that the Consumer Financial Protection Bureau’s (CFPB) independent funding structure violates the U.S. Constitution’s Appropriations clause and the principle of separation of powers. The Dodd-Frank Act, passed in the wake of the 2008 financial crisis, provided that the CFPB would not be funded through Congressional appropriations. Instead, the CFPB receives its funding directly from the Federal Reserve, which is also funded outside the congressional appropriations process.

Grantsville Retail Manager, Brad Stevens presented Emily Anderson a check to help sponsor her on her road to competing in the Miss WV Teen USA. CEO Martha Haymaker (right) with granddaughter Abby volunteering their time at the annual Ox Roast. (L-R) Kelcie Walker, Royce Steele, Ammanda Frame, and Brenda Wolfe assisted the Mountaineer Food Bank

This will be my last submission to the West Virginia Banker, as I will retire at the end of February 2023. As I told the attendees at our 2022 Annual Meeting and Convention, serving as your CEO for the past six years has been a tremendous honor and privilege. Thank you for entrusting me to lead and manage this remarkable organization. I hope I have made a small difference in promoting the interests of this great industry.