| Tuesday, December 8, 2020 |
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| MANAGING DIRECTOR: Scott Carrithers PORTFOLIO SALES AND SERVICE: Steve Panknin • George Morris • Jeff Goble • Chris Thompson • Sean Doherty Kevin Doyle • Lonnie Harris • Mark Tranckino • Robert Schuyler • Tom Toburen Josh Kiefer • Nicole Burczyk • Natalie Regan • Aaron Stoffer • David Farris |
| US Treasury Market | |||||||||||
| Date | 1 mo | 3 mo | 6 mo | 1 yr | 2 yr | 3 yr | 5 yr | 7 yr | 10 yr | 20 yr | 30 yr |
| 12/01/20 | 0.07 | 0.09 | 0.10 | 0.12 | 0.17 | 0.22 | 0.42 | 0.68 | 0.92 | 1.46 | 1.66 |
| 12/02/20 | 0.07 | 0.09 | 0.10 | 0.11 | 0.16 | 0.22 | 0.42 | 0.69 | 0.95 | 1.50 | 1.70 |
| 12/03/20 | 0.08 | 0.08 | 0.09 | 0.10 | 0.16 | 0.21 | 0.40 | 0.67 | 0.92 | 1.46 | 1.67 |
| 12/04/20 | 0.07 | 0.09 | 0.10 | 0.11 | 0.16 | 0.21 | 0.42 | 0.70 | 0.97 | 1.53 | 1.73 |
| 12/07/20 | 0.09 | 0.08 | 0.10 | 0.10 | 0.14 | 0.20 | 0.40 | 0.67 | 0.94 | 1.49 | 1.69 |
Source: U.S. Department of Treasury as of 12/07/2020
Portfolio Clean-Up
Portfolio Clean-Up
In our personal lives we are counting the number of shopping days until Christmas, but in our professional lives, we are counting the number of trading days until we close out 2020. In the next sixteen business days, there should be a focus on if there is anything that needs to be done before year end in our bond portfolios. If loan demand has been slowing with a lighter or unclear pipeline ahead, putting cash to work with a short term ladder could be part of that focus, but cleaning up the portfolio given the current opportunities in the market should get some attention as well.
As prices have risen over the past 24 months, a lot of bond portfolios are experiencing overall unrealized gains. With most positions having market prices above book prices, bank portfolios may want to drill down on holdings that may have been causing some heartache such as fast paying mortgage backed securities, mortgage backed securities with less than 150M current face or downgraded municipals. Also, profits in the portfolio could be used to bolster loan loss reserves and capital if needed.
This could be an excellent time to get out of questionable positions or put an exclamation mark at the end of 2020 by realizing some of those gains. Give us a call to discuss potential candidates within your portfolio.
As prices have risen over the past 24 months, a lot of bond portfolios are experiencing overall unrealized gains. With most positions having market prices above book prices, bank portfolios may want to drill down on holdings that may have been causing some heartache such as fast paying mortgage backed securities, mortgage backed securities with less than 150M current face or downgraded municipals. Also, profits in the portfolio could be used to bolster loan loss reserves and capital if needed.
This could be an excellent time to get out of questionable positions or put an exclamation mark at the end of 2020 by realizing some of those gains. Give us a call to discuss potential candidates within your portfolio.
This information is intended for institutional investors only. The material provided in this document/presentation is for informational purposes only and is intended solely for private use. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.
•Not FDIC Insured •No Bank Guarantee •May Lose Value