In the last two months, community banks’ average investment portfolio have lost 2% in value. Bank directors that were not on the Board prior to 2007 may not have seen such a movement up in rates. So what is a director to do? Here are three questions to answer:

  1. Do we plan to sell any bonds in the portfolio at a loss?
  2. What will the regulators say and how do we answer them?
  3. Is there an opportunity presenting itself?

Vining Sparks has put together a paper that looks at each of these and helps the director in search of direction.