Pub. 3 2012 Issue 4

www.wvbankers.org 20 New Name. Familiar Service. Converge is CenterState Bank’s innovative web-based online banking platform and is the access point for our Clearing/Cash Management Solution. Converge services include: For more information regarding Converge, please contact your Business Development Officer. 120 Club Oaks Court, Suite 150 Winston-Salem, NC 27104 336.659.7100 y 877.604.8282 www.csbcorrespondent.com Account Information Domestic Wires OFAC Email Notification ACH Services FRB Services International Services keep risk of depreciation within our percent of capital limit. In the example, if total capital is $10,000,000 we may find that an effective duration of 3.3 would produce depreciation of $3,000,000 (30% of our capital) in an up 300 basis point rate shock. That would be our maximum risk tolerance, and therefore 3.3 would be our maximum acceptable duration. We have now established two simple parameters within which portfolio management can take place. We can point to the target yield and say that this is the minimum we must earn on new investments. We can also point to the maximum duration and say that this is the most risk we can take. Both calculations are objective and take into consideration the basic relationship between the investment portfolio and the balance sheet overall, including the bank’s level of capital. Sound investment portfolio management is crucial in the current banking environment. Un-invested excess liquidity is a negative drag on earnings, so sitting in Fed Funds is not a good option. The two simple rules that we’ve discussed provide sound and disciplined guidelines that help keep us on track while still allowing the flexibility to make impor- tant choices about the best relative value among the types of bonds available. Q Q Risk and Reward — continued from page 18 For more information, contact Jeff Caughron at The Baker Group: 800-937-2257, www.GoBaker.com , or email: jcaughron@GoBaker. com. The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc. Sound investment portfolio management is crucial in the current banking environment. Un-invested excess liquidity is a negative drag on earnings, so sitting in Fed Funds is not a good option.