Plansmith Blog

Community Banks: The Indiana Jones Sword vs. Gun Theory

Posted by Tom Parsons on 12/1/15 12:30 PM

"In the 1981 film, "Raiders of the Lost Ark", one particular scene consistently brings the house down: Indiana Jones, having survived an elaborate chase through a casbah, is confronted by a swordsman whipping through a flashy routine with a scimitar. Indy initially squares off against the deadly swordsman bearing only his trademark whip in his hands; then with a look of infinite fatigue and disgust, he casually pulls out his revolver and blows the bad guy away." (Credit for text:

Read More

Community Banks: Fun with Funds Transfer Pricing, Part I

Posted by Tom Parsons on 10/13/15 3:00 PM

Yep, the 90s. It was all the rage and I jumped on board like a millennial on the Grateful Dead Fare Thee Well scene – I’m not sure what it’s all about, but I want to say I was there.

Read More

Five Pillars of a Productive Community Bank Planning Process

Posted by Craig Hartman on 8/25/15 2:30 PM

Plansmith has been building financial planning software for community banks for over 45 years. More than just coding keystrokes and calculations, though, we understand the real process of planning and build systems that seamlessly integrate into that process.

Read More

Community Bank Planning is a Collaborative Activity, Part 2

Posted by Craig Hartman on 7/30/15 3:00 PM

In the last post, we discussed the responsibilities and planning software opportunities of the Asset Liability Committee (ALCO), Investments/Funds Management, and the CFO. This post will address the role of the Community Bank's Branch/Department Managers, the Marketing Department, and the CEO/The Board.

Read More

Community Bankers: Basel III, Confucius and Tom Hanks

Posted by Shawna Brauer on 5/11/15 12:00 PM
Much like you, over the last couple of years I have spent a lot of time trying to get a handle on the impact of Basel III. I have spent countless hours attending webinars, reviewing Basel III drafts, running numbers, and figuring out how we should accommodate those changing needs within our software. During this process, I’ve found myself continually thinking about the following quote:

"Life is really simple, but we insist on making it complicated." - Confucius

Read More

Bank IRR: Backtesting…Necessary Evil or Just Evil?

Posted by Dave Wicklund on 4/16/15 12:00 PM

So if you’re reading this, my second ever blog post, you’ve probably already seen the first one entitled "Independent Review, Model Validation, and Backtesting: Same Thing, Only Different." In that piece, we looked at the interrelationship of these three items and brought up a few questions on backtesting. Specifically, we questioned who should do it, how often should it be done, what period should be covered, do you need to backtest model results and assumptions, and why even bother if market rates really aren’t changing.

Read More

How Much Risk Can Your Community Bank Afford?

Posted by Bill Smith on 4/1/15 11:30 AM
Risk is inevitable in banking, in fact it’s what makes banking profitable. The question is how much risk is acceptable. Recognizing that existing techniques of measurement were sometimes misleading and arbitrary, Plansmith developed a simple calculation called ‘Margin Risk Tolerance’ that defines how much risk each bank can take. Despite the wealth of banking information Plansmith has at hand, we believe risk relates to the individual community bank, and cannot be measured to any peer standard or magic number.

Margin risk tolerance calculates the minimum net interest income and net interest margin necessary to maintain continuing operations. Minimum margin consists of two basic components: 1) earnings needed to maintain an acceptable capital ratio and pay dividends, and 2) earnings needed for overhead.

Read More

Community Bankers, There's Room For Improvement

Posted by Bill Smith on 3/2/15 5:30 PM
Most community bank and credit union boards and executives spend a lot of time looking at past performance data. But many only look at projected data once a year at budget time.

Seems backwards to me. As George Bush (the older one) said, "The past is over". The future is unlimited. We can do nothing to change what has happened, but we can do anything to change the future.

Read More

Interest Rate Risk Is A Community Bank Behavioral Problem

Posted by Craig Hartman on 1/20/15 2:00 PM

Gap, beta-adjusted gap, duration and even basic budgeting models only frustrate, confuse and even mislead the financial institution’s asset liability management committee (ALCO). Detailed gap analysis, fiddling with the distribution of savings balances and even calculating the duration of equity does not lead to better margins, nor do they mitigate rate risk.

Read More

Community Bankers: The Most Popular Posts of 2014

Posted by Danielle Slowey on 1/5/15 1:30 PM

Happy one year anniversary to Sparks from the Anvil! There has been a great response to the blog, thanks to all of you.

Read More

Subscribe Now!

Posts by Tag

See all

Recent Posts