Risk & Profitability – Hedging Term Loans, a Practical Guide for Community Banks
Why are more community banks using some form of loan hedging these days and what are the advantages?
Is this something your bank should explore? This webinar provides an introduction to hedging for community banks with a focus profitability and risk.
This webinar will introduce commercial lenders and managers to hedging and enhance bankers’ ability to present and sell commercial term loans. Lenders will be taught how to apply swaps to term loans and how to increase loan value and ROE for the bank. Focus will be on why some banks hedge and others do not, and how the national bank hedging model is not well-suited for community banks. Alternatives to swaps will be discussed.
• Why banks do and do not hedge
• What is a swap
• How to generate hedge fees
• How to price hedge loans
• How to explain symmetrical prepay
• How to set borrower rate expectation
• What is the forward curve
• What are the alternatives to hedging
• Differences between loan and balance sheet hedging
• How to handle existing borrowers
• Assumable and assignable feature of hedges
• Acceptable loans for hedging
• Hedging compared to FHLB advances and brokered CDs
• What is the borrower’s counterparty risk
• How to protect the bank for hedged loans
• Procedures for loan hedging
• Measure of exposure – VAR
CFO, CCO, CEO, CLO and lenders
Ed Kofman is head of Loan Trading and Hedging of CenterState Bank. Ed previously served as Managing Director at PCBB Capital Markets. Prior to PCBB, he was a financial risk manager at Wells Fargo Bank’s Capital Markets group and at Bank of America where he was responsible for general risk management, the production of capital allocation tools and the creation of risk-adjusted return on capital models. Ed also served as a credit loan officer and a Director in the corporate finance group at Bank of Nova Scotia. Prior to his banking experience, Ed practiced corporate/commercial law.
Institute of Certified Bankers: Visit http://www.icbmembers.org/login.aspx for instructions regarding self-reporting. Estimated credits: 2 hours/session
Member price: $275.00 | Non member price $550.00
Member price: $295.00 | Non member price $590.00
Online: Visit the CBA Webinar Catalog
Phone: Call ConferenceEdge at (877) 988-7526 (credit card payments only)
- Preferred Payment Method: Online
- Please register online or by phone when paying with a credit card
- Payment Must Accompany Registration – Invoices are Not Provided
Register online up to day of event. Earlier registration allows time to check your computer for an optimal experience.