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okay good morning this is adam goldstein with the federal homeowner bank of new york and we welcome you to this morning's webinar uh this is the second in 2021 the second webinar we've been uh hosting we're going to continue to provide educational sessions to support you our members uh with uh what we're dealing with in the pandemic we'll bring you these sessions every other thursday hosting a range of speakers both from the fhw ny and outside experts to cover whatever the most important topics are of the day uh next week uh next session i should say i will be frank ferrone managing director at darling consulting group we'll discuss the deposit surge we've all been experiencing in uh 2020 and 2021 but getting the most out of your almc meetings and positioning your institution for success by exploring how to handle excess liquidity uh invitations for that will go out monday and we hope you will be able to join us we believe this type of engagement from our webinar series to our podcast and financial intelligence section of the website enhances the value of membership by providing you with key information to support and help make strategic decisions to strengthen your business through our website and member communications we also report on major events and management and board of director actions for example last week hopefully you saw we declared a five percent annualized dividend um that was paid out in cash to our members last friday this past tuesday we also announced our earnings um we also have important information about our mortgage asset program for those of you who are selling loans to us through the mpf program you have less than three and a half weeks to get set up on map and we want to make sure you have that liquidity outlet alone so if you haven't done that already please contact your relationship manager and we'll we'll set up a one-on-one to help you get set up key dates on the mpf program are march 19th which is the last day of transactions and march 26th which is the last day of funding so well most of our members have already been set up on map there are a few of you out there and a couple on this call we just wanted to make sure you got that important message another important message just to get ready for is anyone that uses our letters of credit to collateralize your state of municipal deposits or through gutpa in new jersey starting march 1st we'll allow our members to have another pathway to dividend income uh by having the b2 capital stock in attached to the letters of credit business so if you have any questions about that just again let your relationship manager know be happy to talk to you about it so before i hand over the next presenter just to cover a few details from today's webinar if you have questions please submit them at any time through the question box we will answer them at the end of the session when we open it up for q a we're also looking to always enhance the programming for our members so we ask you to complete the survey that follows this webinar those topics and speakers that we select for the sessions come directly from feedback from you so anything that's on your mind anything you want us to cover let us know and we'll do our best to get the thought leaders in the industry to address you and answer anything that you want to hear from us now i'd like to introduce tom cetino vice president director of member relations who introduced today's webinar thank you tom thank you adam good morning everybody uh it's my pleasure to introduce carl nelson today he's a the founder and ceo of kpn consulting but carl and i know each other now for approximately 10 years carl has it's gone by very quickly um i met him right when i started here at the home loan bank um and uh every time i meet carl he's a wealth of information i have seen him quite a bit uh over over the years he's a frequent speaker at fhlb events and then also uh he's a very active uh with the independent bankers association new york state at bani's but a great expert in balance sheet management and strategic planning uh like i had mentioned called the founder and ceo of kpn consulting uh his career spans uh from a bunch of different institutions he's been with promontory in her financial network and idc deposits also uh carl has a strong tie to the home loan bank system carl was a senior vice president with the federal home loan bank of atlanta during the 90s into early 2000s where he managed sales and marketing he was responsible for strategic planning and also uh trade association regulator and regulatory outreach and he was a member of the home loan bank of atlanta's alco committee as well and then prior to that he's uh spent 18 years with variab with various regional um banking organization carl's also an educator i'm not going to go through all the different organizations he he's a teacher at but uh presently he's a part of the faculty of the graduate school of banking in colorado and he also serves as the executive at the executive development institution in colorado institute in colorado so with that carl uh it's always a pleasure um i think everyone's going to uh really uh appreciate some of the things that we talk about today so with that i want to turn it over to carl to present our year of the pandemic and industry review we'll call take it away and uh thanks to adam and alyssa for allowing this the opportunity to talk about the most interesting year in my career and probably the most interesting year in most everyone's career this has certainly not been the year we expected when we were sitting down in november of december 2019 trying to figure out what we were going to do in 2020 but it did create i think a lot of innovation it also challenged all of us to sort of turn on a dime and figure out a new way to make money so what we're going to do today is talk a little bit about that pandemic show you a little bit of data on that and then show you how the industry reacted to that change and then finally talk a little bit about some of the lessons learned so let me just start off by looking at the pandemic in review and i started tracking the data my source is the cdc website which comes up every day and talks about cases and deaths and vaccinations etc this is a look month by month starting in april 2020 and going through january of 2021 you can see that the pandemic did ebb and flow and it i think surprised everybody back in july november and december as you can see a movement up again december of course has turned out i think to be our worst month you can see that in terms of the increase in daily cases and the increase in deaths on a daily basis both high in december january was the high point for increases in daily deaths just to give you an update the february case count through the 23rd instead of the daily increase of about 201 000 in january that number is about 65 000 and instead of a 3 000 daily increase in deaths that number is about 2100 so there is some reason to believe that the worst of this is behind us unfortunately we said that before and uh it didn't happen but it does look as though the worst may be behind us i wanted to show you information about the top 10 states by population just to give you a sense of how this thing has run its course through the various states the key columns i think to look at are the last two it sort of levels the playing field in terms of population but you can see the cases per 100 000 people and you can see the deaths for 100 000 people and you can see how the various states have reacted to it one of the great lessons i think we'll get when this is finally behind us is we'll have for the first time an opportunity to look at how you react to a pandemic is lockdown a good strategy how long should those lockdowns last and i think we're going to see enough case studies from various states who tried very different approaches to get to the bottom of what might work best hopefully if we have another one of these i don't know for that but i think it's become pretty clear we need to be ready for this kind of disruption in the future here's some good news on what's going on at this point and this is as of two days ago we had actually collected uh 324 million tests now that doesn't mean 324 million of it tested what it means is that we've conducted that many tests the positivity rate tells you if i take the test how often is it a positive in other words i have the virus another way to say that is about 91 of the people who get tested do not have the virus the vaccine distribution has really taken off recently as of the 23rd 82 million vaccines distributed 65 administered and for those who recall the early days of the distribution one of the problems appeared to be that states were trying to figure out the best way to administer and it looked as though we were sort of corrales paralysis by analysis that's changed now and folks are getting it out much quicker that dose is administered to vaccines distributed is now about 80 percent in other words about 80 percent of the vaccines out there have been put in the arms of folks who would like that vaccine and i think that's a good piece of news because it seems pretty clear that if we can get this vaccine distributed as widely as possible it should slow down and certainly has slowed down this pandemic when faced with something that's never happened before you get a lot of different ideas about what to do i have to applaud the folks in the various government branches who sort of looked at this and said what's the best way to do this this is not like 2008 the great reception recession this was so different and it led to a lot of different approaches in order to backstop the financial system many of the same things that were done back in the great recession were done again but this time it was different this time it wasn't the residential mortgage market that had sort of gone crazy in the early 2000s this time it was something that required a slowdown of the economy that required certain amount of lockdown and so what came to the front turned out to be a pretty good solution and we call that the paycheck protection program ppp i'm sure everybody on this call experienced the difficulty and the opportunity ppp provided and i would say that in addition to saving a lot of small business helping to retain a lot of jobs i think it will also be remembered as maybe the biggest challenge and opportunity our industry has faced for a very long time all of you on the call i'm sure know exactly what i mean so ppp 2020 closed out in august 2020 5.2 million loans 525 billion dollars expended now some of you may recall that the entire program was about 659 billion so just to the point of reference we did not spend the allocation in ppp 2020. i wanted to show you where the a lot of those dollars were lent out and of course new york is high on the list you saw earlier the population of each of those states but you can see that new york really did very well almost 39 billion lent out in that first round of ppp and of course you can see that the five largest states created the bulk of the dollars spent during that period i think it was a great testament to our industry that after some pretty rough starts with the sba and the portal we all sort of figured this thing out together and work through what became not just a great boon for the economy but also turns out to be one of the keys to profitability in 2020 ppp 2021 is as all of you know underway we we have an interesting situation going on right now where in essence small business and i mean really small business sort of has an open portal for the next roughly two weeks this was done to make sure that some of those very small businesses were talking about businesses with less than 30 employees have a good shot at getting money and of course this will be interesting and i'm sure we'll hear a lot more from bankers about how this has impacted their ppp effort but as of 221 just a few days ago 140 billion of the 284 has been allocated has been borrowed by small business new york is the number two player in ppp 2021 with over 11 billion in the program thus far there were some other reactions from the federal and state governments one of which was the economic injury disaster loan or idle this is not a new program this is essentially a program that comes to the fore whenever we have a national emergency declared this program during the pandemic turned out to be two things really one was an outright grant of up to ten thousand dollars per business and that grant was based on the number of employees so if you had 10 employees you were able to get 10 000 that was the limit and that program was shut down as soon as it hit 20 billion that for some of you became a bit of an issue because those grants or advances as they were called sort of got hung up in the ppp forgiveness in 2020 that's been rectified and we understand that the dollars that were left out of forgiveness in ppp 2020 are finding their way back to the banks pretty quickly so that idle problem created in 2020 i think will be a thing of the past the other part of that program was about 200 billion in loans 3.75 interest for up to 30 years 2.75 for non-profits this one has some interest for everybody on the call because there are some collateral and guarantee issues associated with those idle loans you may find that one of your normal borrowers took advantage of idle and you may discover that there is a collateral arrangement that may or may not inhibit what you do with them but you should be aware which of your normal borrowers did take down those idle loans at 200 billion it was a pretty significant program the other program that was out there and was meant to go after the next level up of business away from small business toward medium-sized business was something called the main street lending program and this was going to be an interesting attempt by the federal reserve to provide larger corporate america with loans at prime plus three percent so it would be a floater it would be for five years and would have some interesting ramifications it was a pretty good program that absolutely went nowhere the main street lending program had the opportunity to put out close to 600 billion dollars these loans would be 95 guaranteed by the federal reserve so any bank that entered this program would essentially end up with a 5 risk on a loan to what should have been a pretty good credit it just never did pick up steam and finished off putting out about 17 and a half billion it'll be interesting to do the after action report on this to figure out why did the banking and credit union industry not find this program appealing and i suspect we'll figure out that ppp had pretty much exhausted everybody by the time that program came out i think that was certainly part of the issue now let's turn a little to what was going on in terms of the industry reaction and we'll look at both banks and credit unions now this is a look at year-end numbers for the banking industry and these just came out on the 23rd i would guess the most interesting issue is we're down to 5001 banks and thrifts other i think interesting issues with this chart the total loan business which moved from about 10.4 trillion to 10.6 trillion we have had something happen in 2020 that has not happened for more than 10 years and that was if you take out the roughly 407 million of ppp loans on the books at year end 20. you will discover that the first time in 10 years normal loan growth actually declined and so if you were an institution that had the ability to grow what i call your normal or organic loan portfolio absent ppp in 2020 you are in the minority like i say this is the first time this kind of thing happened in over 10 years now to the opposite side of that coin look at the deposit business we have never seen this kind of increase in deposits over a one-year span ever and of course the combination of the loan picture and the deposit picture is going to create all kinds of interesting issues for all of us in 2021 it would be nice if we could figure out how soon those excess deposits are going to run away but most of us have done just about all we can so far to get rid of those high cost deposits and i'm afraid at the moment we don t have a lot of room to decrease deposits through the pricing mechanism the normal one we use so it's going to be interesting i think a lot of economists feel like there's so much pinup demand out there and the consumer who normally takes about 70 percent of the gdp has been held back from spending for so long so there is a belief out there that those deposits are going to go out the door consumers are going to be looking for ways to spend money they've been saving during the pandemic so there is some belief that those deposits going to disappear pretty quickly the other thing that's interesting about the chart is the profit picture and we're going to dig into that a little bit more but i i would like to say this what we have at the moment is the lowest loan to deposit ratio it's about 60 percent at the end of 20. we've got a reasonably good capital ratio 10.18 when i say reasonably good i'm not a believer in excess capital 10.18 is frankly about 2 percent higher than you were allowed to go at the end of 2020. the a triple l at the end of 2020 is a very robust 2.23 percent that's not something we've seen really since the great recession roa at 68 basis points that's a point in time year-end roe 6.64 so 2020 was not a particularly great year we're going to figure out that this was essentially all about one thing and that was frankly the provisioning that was taking place and we'll look at that uh in a in a minute or two just to show you what that meant for strategy during the year so from a banking perspective we're down to 5 000 just to give you a sense when i started my career and tom that was very nice of you explaining my career and telling them very nicely i'm very old in fact adam and i go back 20 years he was only 14 when i first met him at the home loan bank but uh i've been around a long time when i started there were about 21 000 banks and thrifts so you can see we've moved pretty dramatically i wanted to take a brief look at the credit union industry as well and my apologies the ncua is not yet updated to 1231. i think what's fascinating about the credit union industry is that the consolidation has been very similar to the consolidation that's occurred in the banking industry and what you're seeing in terms of the nine month numbers you're seeing a very nice increase in members you're seeing a nice 14 percent increase in assets a nice increase in loans loan to share is at 75.6 from the standpoint of profitability not necessary liquidity uh very healthy but still about nine percent under the norm the other thing you're seeing is that the average credit union has moved from 299 million to 348 million and so what you're seeing in the credit union industry is very much like what's happening in the banking business that is to say consolidation is the norm and the other thing you're going to see is that as the consolidation occurs we just end up with bigger and bigger players and that is certainly true in this industry as well in fact the 14th largest financial institution in the state of north new york is actually beth page federal credit union at 10 billion so very similar consolidation very similar increase in average occurring in both industries now let's take a look at new york and show you that consolidation is of course happening here new york has come through this really last 15 years very well and you can see no failures in the last five years you can also see the number of institutions has dropped from 146 to 129 now the interesting thing about new york is you've got four banks now with assets over 100 billion those would of course be bny mellon m t bank which some of you noticed uh is going to get a lot bigger uh with an acquisition that's supposed to close in 2021 those four banks those two plus morgan stanley and goldman sachs about that for shocker those two investment banks now have two extremely large commercial banks but those four players are about 450 to 500 billion of the trillion three in assets so what you're seeing there is slow growth again although that looks like 52 billion when you pull out some of the ppp activity you're going to see that loan growth in new york was very similarly difficult what was occurring across the industry in general and then you see that other huge increase in deposits there is no doubt in my mind that what we're going to fight in 2021 is how in the world do we get back to 80 loan to deposit which is historically where we tend to make good money given what's happened in those two arenas hopefully we'll find out it'll be a positive message in terms of profitability what you can see there is that new york had a decline in profits uh 2.5 billion actually and that's about a 22 percent decline the loan to deposit ratio for the state of new york is 51 now some of it is back in new york mellon which for those of you that haven't looked at their balance sheet they've got about 180 billion dollar balance sheet with about 25 billion in loans so they hold down that number pretty dramatically the a triple l for new york in general is 131 but if you take out those four banks it's about a 156 so a triple l's have moved up nicely in new york as they have across the country roa and roe performance for new york is very similar to what's occurred across the industry in general so there's new york for you again four players do have a significant impact on all the numbers coming out of new york but hopefully new york community banks did well enough in 2020 in fact we have reason to believe that many community banks actually had increased earnings in 2020 over 2019. well what was the strategy in 2020 and i am old enough to remember what happened way back in 2007 8 and 9. and some of you have been around that long know that when faced with the problems of 2008-2009 when faced with the almost certainty of a poor stock market most of the publicly traded banks and certainly the very largest banks dramatically increased their a triple l in eight and nine that same thing happened this time but what made it interesting this time was the fact that cecil was only in play in a relative handful less than nine percent of the banks in the country and that cecil calculation i think combined with strategic thinking created a very unusual provisioning particularly in the first half of the year so the very largest banks dramatically increase their atrials i think most every bank in the country increased their a triple l but in the community bank world it seemed to be more a function of you know what i'm not seeing those losses so i'm going to expand my triple l but i'm not going to do what's happening at jp morgan chase for instance and let me show you what that is one of the things that occurred in 2020 was in the first half of the year the provisioning and just remember when you provide for loans it doesn't mean you've had a loss it just means you're providing for future losses and of course cecil makes that an interesting exercise which has thankfully been put off for a few more years but the largest banks i think looked at cecil saw what it was spitting out but also thought that the stock market would go in the tank that did not occur but what happened over the full course of 2020 in the provisioning category is about 116 billion was provided in the first half of the year that is to say through june 30. and that was occurring despite the fact that net charge offs weren't that different from the prior three years 17 through 19. but it was this expectation created by both cecil and i think strategy about stock price that created this desire to get ready for whatever would happen but also as you probably know the strategy then plays out in the future years as banks start to pull money out of the reserve now for you community banks in the audience that's a pretty tricky issue with your typical regulator but the large banks have already started that process and by over-reserving in the first half of the year what you saw particularly in the fourth quarter was a very small provision but you also saw some of the largest banks starting to pull money out of the reserve so my contention is 2020 was completely about provisioning in fact if 2020 would have been a normal provisioning year that is to say if we would have provided about 55 billion in 2020 we would have actually shown a much larger profit for the industry in fact i calculated it would have been about 225 billion had we provisioned normally the reason i mention that is a if the big guys are right and the losses are not there for whatever reason then they will have a good share of profitability to come back through them a triple l community banks won't be able to do that but what community banks will do is their provisioning in 2021 will i imagine be much less than it was in 2020 and each of you is going through that problem right now trying to figure out what that's going to look like let's talk a little bit about 20 and 21. first of all the nim compression in the banking industry in 21 over 20 was 54 basis points we went from a 336 nim to an 8 282 that is one heck of a drop i think it's a real testament to the financial service industry in general that we made any money in 2020 given that kind of drop in what historically dictates our profitability that said we do conference calls in new york and texas and many of the banks on those calls actually did have more profit in 2020 than 2019 and i suspect many of the banks on this call did as well that despite this very significant drop in them along with something we didn't expect we didn't expect overdraft fees to drop through the floor but guess what consumers started saving and started paying more attention and so we had to overcome that nem compression along with the overdraft fee reduction with something else and i think those something else's turned out to be ppp particularly fee income and residential mortgage revenue activity i think that'll be the story of 2020 more interesting though is the story of 2021 and what will that bring the nym compression will continue i don't think it will drop another 54 basis points god willing but it will drop and we will be facing many of the same issues in 2021 that we faced in 2020 now another big positive most of you did not take all of your ppp 2020 fees in 2020. in fact we have reason to believe that maybe as much as 60 of those fees are carried into 2021. so you're going to have not just the fees coming from the 2021 program but also the carryover from 2020 so that is going to make for a very interesting 2021. most of the banks we talked to about 2021 are suggesting that an increase in assets will be the only way to increase profit in 2021 i don't know where each of you is but it does seem like that's sort of the normal strategy so far we're seeing well we certainly did have to adopt very quickly to the pandemic and this had to occur really in the first quarter everything we had put into that strategic plan for 2020 went out the window very quickly and that was the result of the pandemic one of the things though i think that was good about the pandemic and there are very few things that were is that we had to learn to change how we do things and i wanted to talk a little bit about some of those lessons briefly let's start with the branch network a lot of articles written in the american banker lately you're talking about banks and i put some of the smaller did you ever think you'd see the day when smaller would be 20 billion dollars but these are some of the smaller banks that have announced branch reductions most of the majors have talked about significant decreases in branches in fact the number that's being thrown out is three thousand nine branches are to disappear in 2021 why are they doing this well a lot of banks spent a lot of money on their digital channels and what they're discovering is many of their customers have adopted those channels that could be the atm channel that could be the cell phone channel that could be your website whatever it is and so they're coming to the conclusion that we won't be able to support in-branch staffing with the traffic that we expect to come through in fact i think a lot of banks have come to the conclusion that transactions are best done digitally and consulting in the larger issues like this is my first mortgage this is my first car loan this is my first investment will continue to be done through the branch system how many banks how many credit unions out there are rationalizing their branch network today i expect that everybody should at least take a look at it how do we interact with customers drive through appointment only golly ned did we ever think this would work this well and i can remember when we used to think let's have those people come into the branch let's have our tellers cross train well that's not really working and i think what we've about to uncover here is that maybe it's better to have appointments in the lobby so that we sort of sift through the people that just want to do transactions and take time and limit those appointments of folks who really need our help so we're going to see whether or not the drive-through appointment carries on into the future if it does or doesn't it doesn't matter we're headed toward a cultural clash on that i can guarantee how about technology we had to figure out how to do things without in-person contact and so we had to move toward this adoption of technology much faster than i think we would have under normal conditions i think it's going to be interesting to see how many of those techniques we continue to have speaking personally i would say that all of us have to figure out how to open accounts and create at least small loans digitally and all i mean by that is we're going to have to figure out how to open accounts and create and i think for most community banks we're talking about 10 000 and less we've got to figure out how to do that without in-person contact i think that process has been speeded up pretty dramatically because of the pandemic what else well i really didn't think i'd see this one coming but we've also discovered that we did just fine working remotely and i think this is probably tied into a larger issue my generation was pretty much a command and walk-around management style the next generation is more focused on measuring results and i think the combination of those two things it's really going to speed up this whole business of who works from home who has to come in we do a lot of peer groups around the country and the biggest thing we hear about hiring and retaining this next demographic is that so many of them look at being able to work remotely as a big deal and so i think this is probably going to be helpful i think it's going to be a very big culture clash because i think it is a it's a good question can we have the same kind of efficiency when they're not here but i think what's happened is the pandemic has at least taught us that it can be done now whether we continue that and not as anybody's guess but i have a feeling at the larger bank world we're going to see a lot more remote workplace one more other key issue and this is one we learned the last time during the great recession having worked in the system the federal home loan bank system for the best part of 12 years i can tell you it's an incredibly flexible structure and it's had to really get through two major economic issues in the past 13 14 years and has done that very well think of a situation where the main driver of your profitability loans can decrease by a factor of 500 billion which is what happened in the great recession and you can still come through it with profit but also more importantly with an ability to service your members needs this has been one other test for the system and it's come through perfectly as it did with i think the great recession and i think those of you who are fortunate enough to have the home loan back in new york by the way the largest single home loan bank in the system now adam that does make me a little bit upset given my atlanta roots but new york really is shining and has been shining for the last uh five or ten years so you're lucky to have that you've got this unprecedented liquidity tool that you can use pretty much whenever you want it but you also now c n take some time and take a look at some of the other programs particularly the letter of credit and the community investment program and also i've noticed that new york's been a big player in simply providing financial support to the communities they serve so great time for you to appreciate a great time for you to learn about all of the services your home loan bank offers now here's our quiz before we finish who said never let a good crisis go to waste well everybody knows rob emanuel said it in 8 and 20 but actually winston churchill said it first at the end of world war ii hopefully we will not let this pandemic go to waste we've learned a lot let's see what we can carry forward in the future and tom and adam and elissa that that finishes where i am all right carl thank you very much i didn't realize uh winston churchill was the first one to coin that phrase so it was interesting and i don't look at you as very old carl so uh i didn't mean to give you that impression but uh anyway we did have a couple of questions we're kind of running short on time but uh we'll go through them uh that there's two in particular i want to cover um with uh with regards to m a carl i mean the the current um crisis has really shifted business practices and consumer behavior what do you think will happen with m a i mean one thought was that maybe the adoption of technology by consumers will allow smaller entities to be able to reduce their expenses and better position them to compete but what are your thoughts on the m a front well tom as as you probably know we were consolidating at about 250 banks a year and very similar in the credit union business by the way um that stopped in 2020 i think we had about 112 come together in uh 2020. uh actually i do think that the banks who adopt the banks who can figure out uh the next demographics and figure out how to service their needs and i think that's a digital play i think they'll do very well but honestly i don't think m a is driven by that i think it's driven by succession planning and one of the things we continue to notice is that there's still not a great plan for succession in general at the community bank level particularly under 500 million and i think it's probably going to resurface again in 2021 i think the banks that adopt with the technology with the workplace with all the other things that they've learned are going to do very well they won't have to but i think succession plan is really the key there and i think that's where they fall down okay interesting thanks carl um and then another another question you know this this financial uh current financial crisis uh it's kind of shine a bright a light on the nimbleness of smaller community banking organizations and this request this question kind of relates to uh how some of the commentary from our member institutions that um they picked up a lot of clientele and customers because of their nimbleness and their responsiveness to like tpp program lending and um they were very uh flexible with their forbearance programs is that high touch that the community bank has do you think do you see this trend kind of continuing and community banking sector kind of emerging from this crisis stronger as they pick up some clientele from mega banks tom absolutely we hear story after story about particularly the early days of ppp 2020 where some of the very largest banks just weren't ready and so what was happening is those community banks that use ppp 2020 to expand their base of members and clients that was a big deal for them and then later we were hearing you know i can't get anything but an 800 number with jp morgan chase for instance i'll pick on them and i can talk to somebody at my local bank and it really made a big difference because the borrowers under ppp were even more confused than we were and they had a lot of questions and they wanted to talk to somebody and so i do think that community-based institutions whether you're a bank or a credit union your high touch really played out particularly with ppp and i think if we can figure out how to solve the needs of both uh the older generation say the baby boomers as well as the gen xers if we can figure that one out i think we're going to have a lot of good years in front of us and i think that is mostly because we do have that high touch situation which is definitely needed when we start dealing with more complex financial issues okay thanks carl and this last one it was my question so you uh you could uh you don't have to take a lot of time with it but uh this is something that i see our members um doing and the lessons learned from this crisis i also thought about some lessons learned from the last crisis last crisis the low rate environment really lasted for a very very long time and and we saw a lot of our member institutions here at the home loan bank keeping their assets short and kind of taking years to deploy their excess cash uh the excess cash that they got in when those surge deposits came in and never left what are your thoughts about uh you know what were your thoughts or were your what your comments be to uh those who are kind of positioning themselves for a rising rate environment now and kind of keeping assets short and then stock filing cash tom it's a big it's a big question on our peer groups and my answer is don't do that you have got to find ways to create some spread and what i mean by that is yes asset yields are low but so is cost of funding look at some of that longer term home loan bank advance create what i call leveraging strategies they don't have to be securities but you're going to have to find ways to get yield out of the loan side but i think you can go longer on your structure but i think you want to really have a strategy about how much of that is hedged i know you don't need the money but i think you really do want to take advantage of some of these very low rates out say five years and find ways to hedge find some ways to get higher yielding assets on your books sitting around waiting for the fed funds market to move off of eight to ten basis points is not a winning strategy in my view okay thanks thanks carl um well that concludes our session for today we apologize we went over a little bit but i really appreciate your insights carl it was a great session um just want to let everybody know that uh in two weeks um right now we're conducting these sessions bi-weekly so the next uh session is march 11th it's going to be title balance sheet strategies with 2020 hindsight margin and earnings pressure intensifying prepared now for the inevitable that's going to be um that's going to be presented by a friend of carls and the home loan bank of new york that's from darling consulting uh frank ferrone so um he's the managing director and uh on a balance sheet strategist for a darling so um for those who have you heard them in the past you know he's a great presenter and provides a lot of great insight so again carl we really appreciate it and thank you everyone for attending and have a great day thanks all thank you