Community Bankers Association of Illinois

Dear CBAI Members:

Recent developments in U.S. financial markets are stunning. Large banks, brokerage firms, and financial conglomerates have engaged in high risk business strategies that have in some cases threatened their very survival. The vast majority of community banks, on the other hand, have avoided the temptation to leverage their balance sheets excessively and expose their shareholders and customers to unacceptable risk.

One of the main reasons many of our members have avoided bad investment and financial management decisions is the advice and direction they have received from The Baker Group, our endorsed provider of investment services and asset / liability management. I think it is important to note the truly critical advice that was given to our members regarding investment portfolio management.

The Baker Group has always focused on using the investment portfolio as a vehicle for managing the interest rate risk of the overall institution. They stress the importance of liquidity, cash flow management, and pre-purchase analysis of risk & reward characteristics for bonds. The Baker Group does not advise our members to “reach for yield” by purchasing non-traditional securities in the investment portfolio. Indeed, many of our members were specifically advised by Baker representatives to avoid the temptation to buy securities that have now suffered heavily in the recent market turmoil. This has turned out to be excellent advice.

During this challenging period, I felt you should know these facts about The Baker Group, another reason why CBAI has partnered with Baker since 1983.

Sincerely,


Robert J. Wingert
CBAI President

  800.736.2224 (IL) | 217.529.2265  
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