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Nearly every man who develops an idea works it up to the point where it looks impossible, and then he gets discouraged. That's not the place to become discouraged.
Thomas Edison Categories
Monthly Archives: May 2009
Rethinking: Understanding Why Banks Fail
While there are many reasons a bank might fail, the common pattern is excessive loan losses followed by a lack of confidence from depositors. The actual closure of a bank may be triggered by a run on deposits, or regulators may step in if it appears that capital has been exhausted due to large losses. Bank failures over the past year have generally followed this pattern. For example, the failures of Washington Mutual and IndyMac happened as a result of unwise expansion and risks taken during the housing bubble, including an inordinate number of subprime mortgage loans that defaulted when the housing bubble burst.
There are many factors that can lead to excessive loan losses. Expanding rapidly into new geographic areas may result in banks taking on risks they don’t fully understand or trying to “buy” market share by liberalizing credit underwriting. Some may expand into new product types without fully understanding the risks involved, as was the case with subprime mortgages. Banks may also simply be lax in enforcing credit standards when the economy seems robust. Occasionally, a bank may acquire another company without fully understanding the risk in that company’s loan portfolio. Read More
Zions Bank Recognized by NADCO
The National Association of Certified Development Companies (NADCO) recently recognized Bank of America and Zions Bank for their extensive participation as first mortgage lenders in the SBA’s 504 loan program. The nation’s Certified Development Companies (CDCs), in partnership with private lenders who provide first mortgages, fund long-term, fixed rate loans for small businesses to acquire commercial real estate through the SBA 504 loan program. Since its inception SBA 504 has funded nearly $40 billion in loans to growing small businesses. Read More
Understanding Fiscal and Monetary Policies
Without a doubt, the recession that began in December 2007 has shaken up our perspective on the economy. Beyond the pressing issues facing Americans who have lost their jobs or their homes, the outcome of this recession centers on changes in the monetary and fiscal policies that underlie our economy.
What do these factors mean to you? Read More
IRAs as Building Blocks—Retirement: 2 of 6
In Part One of this series, Zions Bank Senior Vice President Paul Hansen offered an overview of some key considerations when planning for retirement. In Part Two, Hansen reviews IRAs, the building blocks of a retirement plan.
“After some Zions Bank clients expressed concerns about keeping IRAs open, I realized there was confusion out there,” Hansen says. “An IRA, or Individual Retirement Account, is a vehicle for saving. It’s not the investment itself. IRAs can be used to invest in stocks, bonds, mutual funds, Certificates of Deposit, money market accounts and other investment vehicles such as real estate. When investing in an IRA through a bank, clients can put their money in CDs and money market accounts covered by FDIC insurance for up to $250K.” Read More
Traveling on a Budget
On May 1, 1486 Christopher Columbus stood before the royal court of Ferdinand II and Isabella I of Spain. His purpose: to request funding for his historic voyage across the Atlantic.
While most of us can relate to Columbus’ desire to explore the world, we don’t need a king’s ransom to travel like royalty. The unforgettable and affordable vacation of your dreams is a lot more viable than you may think. Read More
Rethinking: Banks, Bailouts, and Taxes
Since the latter part of 2007, the financial world has been in one of the worst crises of the last half century. Just a cursory look at news headlines around the world reveals a telling and stress-inducing story.
With these articles, the spotlight remains squarely on financial institutions as we are continually reminded of failing and nearly failing banks needing “bailouts”. Unfortunately, we are too often only exposed to part of the story. Read More
Historic Week at Zions Direct Auctions
On April 28, Zions Direct closed its first municipal bond offering on the auctions platform. At its close, participants had bid on nearly nine times the offered amount on the Manatee County, Florida bond with the highest bid asking for a premium price of more than 1½ % above the coupon. Because of the benefits of the modified Dutch auction model, all winning bids got a better price than the coupon amount as each walked away a yield greater than 4.251% on these seven-year municipal bonds.
For those taking those possible tax advantages on this bond, if we assume a 35% tax bracket, it would take a yield of 6.53% on a taxable security in order to get a similar after-tax equivalent yield. Read More
