Where has 2022 gone? It seemed like yesterday we were together in Roanoke for the 2021 convention. At that point in time, we were celebrating the opportunity to be back in person, lamenting excess deposits and the need for more quality loan assets. The economy appeared solid, even if supported by significant stimulus out of Washington, D.C. Inflation was deemed “transitory,” and there was an expectation of stable economic conditions for quarters and maybe years ahead.
Today, the world is witness to the Russian invasion of Ukraine; energy prices have soared; supply chain and logistics disruptions persist; while labor is still a challenge, all contributing to a 40-year record inflation number. The 5-year CMT increased 188 bps from October 1 to 2.81% as of May 31. Bond portfolio losses have mounted and we question how Federal Reserve monetary policy will impact economic conditions. Clearly, there is a bias to slow things down. But, will the Fed be able to “soft land” the economy?
In times of rampant change and uncertainty, relationships are invaluable. Most of us immediately think about the relationships we share with each other, our employees, customers, shareholders and certainly the communities in which we operate, all of which are critically important. However, I encourage you to think about another group of relationships — those with our associate members and endorsed providers. The VACB currently has 42 associate members and 6 endorsed providers, many of whom have supported our banking companies through a myriad of economic conditions.
These relationships have driven revenue enhancement, cost savings, loss mitigation, process improvements and greater efficiency. Services are quite diverse, including insurance, card processing, software/technology, check printing, supply procurement and others. Many have supported our operations for decades, while others, including fintechs, are in the early stages of their business operations trying to identify and solve industry issues in partnership with our banks.
Take a moment to review the services of our associate members and endorsed providers. Their insights, observations and solutions may help you navigate the changing conditions. A small investment of time could produce meaningful financial results for your bank and shareholders.
Steve and his team would welcome the opportunity to facilitate introductions with our associate members and endorsed providers. We thank you for your continued membership.
