Pub. 1 2010 Issue 1

spring 2010 21 exceed recent historical growth rates, but not as high as the first half of 2009. Consumers are still saving and they are seeking safety (FDIC insurance). The rates on money market mutual funds are not competitive to banks rates and this will remain the case through 2010. Households will continue to choose banks as an outlet for their savings. Therefore your ALCO should manipu- late deposits rates to manage the inflow. In this environment you should continue to test the sensitive of customers by lowering the rate on pools of funds such as mutual market deposit accounts, savings and checking accounts. As the year progresses and the probability increases for short-term rates to rise, the key then will be to hold the line on pools and use aggressively priced CDs to deal with interest sensitive customers. In conclusion, 2010 is likely to be another challenging year for balance sheet managers. I would continue to go with Aristo- tle’s advice, “everything in moderation”. Our major hope is for sufficient economic recovery to stabilize credit quality thereby reducing the need for higher loan loss provisions; no change in the Fed funds rate thereby maintaining lower funding costs and bolstering profitability; and no increases in FDIC premi- ums. Happy New Year and welcome to 2010. Q Interest Rates — continued from page 17 Jim Clarke, Ph.D., Clarke Consulting, Villanova, Pennsylvania Dr Clarke is a consultant to banks on ALM and strategic issues. Jim can be reached at JJClarke2@aol.com for questions and comments. risk management, effective leadership, project management and managing risk in HR. The WV School of Banking and the Graduate School could not operate without the dedicated industry professionals that make up the governing board. These bankers contribute their talents, skills, knowledge, expertise, and time to assure that this school is pertinent, timely and gives the attending students the tools needed to become assets to their institutions. The industry professionals that make up the governing board consist of our Dean, Dr. Ed Seifried; our Chair, Kathy King, First National Bank in Ronceverte; Pat Frye, Summit Community Bank in Moorefield; Bill Loving, Pendleton Community Bank in Frank- lin; Alan Otey, Rock Branch Community Bank in Nitro; Tim Quinlan, City National Bank in Charleston; and Brad Wartella, Bank of Mt. Hope in Beckley. The West Virginia Bankers As- sociation is very appreciative of their efforts, and willingness to serve the banking industry in this way. The next session of the West Virginia School of Banking and the Lloyd P. Calvert Graduate School of Banking is sched- uled for May 23 – 28, 2010, at the University of Charleston, Charleston WV. For more information, visit our website at www.wvbankers.org or contact us at 800-343-8038. Q REACH YOUR TARGET AUDIENCE AFFORDABLY Advertise and get results with Kris Montione, Project Manager Media Communications Group Spectrumink Sales & Marketing 727-475-9827| Kris@spectruminkpublishing.com