OFFICIAL PUBLICATION OF THE WEST VIRGINIA BANKERS ASSOCIATION

Pub. 13 2022 Issue 4

Under Pressure: Deposit Betas in 2023

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.

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Six Strategies to Navigate Credit Stress

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.

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Why A Holistic Approach to Cybersecurity in the Banking Industry Is Beneficial

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.

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What a Recent Court Decision and Challenges to the CFPB Mean for West Virginia Banks

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.

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2022 Highlights: Honoring Our Bankers that make Our Communities a Better Place

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

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President’s Message: Farewell

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.

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