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Douglas L Williams President & CEO
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Season's Greetings and Happy New Year to you and your family from all of us at Atlantic Capital Bank!
As I reflect on the past year, I want to thank you, our clients and friends, for making 2014 a year of growth and success for Atlantic Capital Bank. With your support, we have experienced solid expansion in all three of our business lines and have cultivated relationships with over 1,125 commercial and private clients. As always, our talented team of bankers continues to work hard for you. We sincerely appreciate your partnership and look forward to being a part of your financial success in 2015.
Sincerely,
Doug Williams
President & Chief Executive Officer
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Economic Recap - 2014
By Rogier Kamerling, Treasurer
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Treasurer
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The holiday season not only brings cozy family time and cheer, it also means it's time to plan and budget for the year ahead. This time of year is great to go back to the economic forecasts from last year to see how helpful they were. Typically this is a humbling experience, illuminating the complexity of the subject matter and all the unforeseen forces that can come into play.
Since the housing bubble burst, the economy had to rely heavily on two crutches - monetary and fiscal policy - for growth. The crutches allowed the economy to work through the imbalances created in prior years. During the last days of 2013, the consensus economic narrative was that 2014 was going to be the year the economy was going to reach escape velocity. If the economy reaches escape velocity, it means the internal dynamics are such that it can grow, or lift-off, on its own. The logic was that the positive feedback loop between more jobs, higher wages, higher home prices (stronger household balance sheets), and more demand (consumption and investment), would work as an accelerator on economic growth.
The jobs market delivered, mostly. Employment expanded by 241,000 jobs a month; this clip of job creation is faster than any year during the housing boom. The unemployment rate dropped from 6.7% in December 2013 to 5.8% in November 2014, close to the Fed's 5.4% estimate of the long-term average unemployment rate. Unfortunately, wage growth did not accelerate and remained well below the long-term average. This probably explains why a lot of households continue to feel left out of the recovery. Residential real estate markets continued to improve, but the rate of home price appreciation slowed more than expected, and construction activity remains subdued. In terms of overall growth, the US economy was expected to grow at about 3% during the year, but is likely to only grow by about 2.25%. This is well below the average growth rate during previous expansions.
When compared to other major economic blocs - Japan, China and Europe - the US turned out to be the cleanest dirty shirt of the bunch. These three economies performed significantly worse than expected. Instead of preparing to normalize policy, the European Central Bank is intensifying its accommodative stance by increasing the size and scope of its quantitative easing and liquidity operations to fight off deflation and resuscitate economic growth. The 10-year German Bund yielding only 0.7% is very telling. In China, growth remains above 7% a year, but significant overcapacity continues to put downward pressure on prices, and has many worried about economic stability. In Japan, the central bank aggressively expanded its quantitative easing program in response to a faltering economy. The yen has tumbled to a record low against the Chinese Yuan, while South Korea has put the market on notice that it is watching the Japanese currency closely. Planned currency devaluation - to increase the relative competitiveness of exports and stimulate inflation - and the international implications of a strong dollar will be something to watch for in 2015.
Especially at times when the crystal ball is murky and the economy is undergoing significant structural change, it can be hard to plan ahead. One possible way to deal with this is to retain as much flexibility as possible and think in terms of multiple scenarios and how to deal with each of these. When thinking about planning, the director of research at the Atlanta Federal Reserve puts it very nicely: "Monetary policy is an exercise in risk management. Here is the probability of being wrong: 100%. The question is what is the worst way to be wrong."
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The Year-End Wrap-Up
Tips for Closing Out the Year
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"Stay engaged at the end of the year, and don't lose focus. It is important to enter the new year with momentum."
- Pat Hickey, EVP
"Review your 401(k), and complete all financial gifts, including charitable contributions and annual exclusion gifts for your children or grandchildren, before the year ends. This is also a great time to increase your children's financial literacy by opening a bank account for them." - Lora Fishman, SVP "Think of a very successful initiative that took place in 2014. Document the steps that were taken so a process can be developed for the next one. Do the same for an unsuccessful initiative and figure out what lessons were learned so they are not repeated next time." - Jennifer Hall, SVP
"Figure out your tax situation before the business year closes and you still have time to implement a tax savings strategy." - Dany Lee, SVP
"Talk to your CPA as soon as possible. Now is the best time to confirm that there are no tax surprises coming your way."
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Listen to Founders Club Radio
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Check out Founders Club Radio, sponsored by Atlantic Capital Bank and hosted by ACB's own John Coffin. Founders Club airs live every Wednesday at 10am, and features interviews with CEOs, Presidents, and Founders of companies in the Southeast. Learn more at www.atlanticcapitalbank.com/founders-club-radio.
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December 24:
Bank closes at 2pm for Christmas Eve All banking functions should be completed by 2pm.
December 25: Bank closed for Christmas Day
January 1: Bank closed for New Years Day
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Follow ACB on LinkedIn and Twitter!
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For up-to-date news and the latest Knowledge Center articles, follow us:
Twitter:
@atlcapbank
LinkedIn: linkedin. com/company /atlantic-capital-bank
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Atlantic Capital Bank sponsors the Closing Bell report on WSB radio (95.5FM and AM750). Listen at 6pm weeknights to hear a message from Doug Williams and other members of the Atlantic Capital Bank team.
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