Contact:
FDIC's Data Collection and Analysis Section at 800-688-3342 or insurance-research@fdic.gov  

Note:
FDIC Financial Institution Letters (FILs) may be accessed from the FDIC's website at www.fdic.gov/news/news/financial/2012/index.html    

By Jim Reber, President/CEO of ICBA Securities 

I once heard an economist request of an audience that if they ask him to predict, at least pay him the courtesy of asking him often. Bond investors, who have been wrong in certain regards since 2008, will similarly one day be proven right.

For a variety of reasons, the interest rate curve has been abnormally steep for about four years. Probably the most likely cause of this is that investors on different parts of the maturity spectrum have divergent expectations of future inflation levels. What is not in dispute is what a positively-sloped curve predicts: Higher interest rates.

Now, as the economy seems to be gaining a foothold and price indicators are starting to move upward, maybe today's investors will be vindicated in the next few years, and rewarded with a decline in the value of their holdings.   What this also portends for community banks is that their interest rate risk profile will come into sharp relief.

How banks manage risk

There are several requirements for best practices as described in a joint statement from the FFIEC in January 2010. One is that a simulation model is required for all institutions, and the old gap analysis, while permissible, cannot be the primary measuring tool for rate risk. Another is that an institution's IRR policy should clearly describe the methodology used, and the acceptable risk limits.

For the vast majority of community banks, cost-effective outsourcing is available from a number of vendors. At one point in the past, it was assumed that a $250-million asset bank could manage and document its IRR internally. That parameter has shrunk geometrically. Now, institutions of well under $100 million have funding and lending complexity that requires third-party assistance.

For banks that are $1 billion or more, in-house resources are often the most effective application. Having dedicated personnel to create, monitor and report on the interest rate risk profile of the bank is usually worthwhile.   In the case of these larger community banks...   

...read the rest here.  

From: NewsLI.com 

Gold Coast Bank, one of Long Island's fastest-growing and financially strongest de novo commercial banks, has been granted approval from the New York State Department of Financial Services and the Federal Deposit Insurance Corporation (FDIC) to open a fourth branch in the Town of Babylon, which will be located on Allen Boulevard in Farmingdale, NY.
 
Appointed as the new Farmingdale branch manager is Sandy Buttacy of West Babylon, NY, who is formerly Vice President and branch manager with First National Bank of Long Island and brings seven years of banking experience and service within the Farmingdale region. The opening of Gold Coast Bank's newest branch is set for the week of April 23, 2012, which will be followed by a commemorative grand opening celebration to be held on Tuesday, May 22, 2012 that will feature unique special events and promotions.
 
"True to our registered service trademark as 'Long Island's Community Bank,' the Farmingdale location presents a wonderful opportunity for broadening our brand of banking, which specializes in a myriad of private-client banking type services for business owners, professionals and high-net worth individuals," said Gold Coast Bank President and Chief Executive Officer Joseph G. Perri.  "Gold Coast Bank was founded four years ago with a strategic growth plan that focused on creating a strong financial, service, sales and management foundation. Since then, we have maintained a strong capital position, which has allowed us the opportunity to expand in short order, making our vast banking and lending services more convenient and accessible for the greater Long Island community."
 
The bank, founded in March 2008, has total assets of $160 million.  "Our success demonstrates that there is strong demand for our niche as a community commercial bank with exceptional customer service, providing consumers with an alternative to the regional banks and money-centers," added Perri.  "Gold Coast Bank has been especially active in extending loans, in part because it does not have a portfolio of troubled loans that some other banks are continually burdened with today."
 
Gold Coast Bank was founded by a group of local business leaders who understand the challenges faced in starting, running and expanding businesses.  The bank, headquartered in Islandia with current branch locations in Huntington and Setauket, provides a range of business products, including such lending products as term loans, lines of credit, and real estate loans. It also offers a number of Small Business Administration (SBA) products and traditional consumer products.