conference - Darling Consulting Group

THE 28th ANNUAL
Balance Sheet Management
C O N F E R E N C E
June 4-5, 2012
MARRIOTT LONG WHARF • BOSTON, MASSACHUSETTS

CONFERENCE SESSIONS
Balance Sheet
Accelerating Branch Network Profitability
Lessons from high-performing banks and retailers
Banks are challenged to drive incremental profitability from their
branch networks in today’s low-rate environment. In this session
Richard Pilla and Michael Purchia detail what smart bankers are
doing to outperform the competition. These strategies work for
urban, suburban and rural banks and include: assessing existing
and new market trade areas to consolidate branch facilities and
re-deploy capital, taking advantage of new technologies and
banking patterns to re-configure branches and reduce staffing,
systematically building C&I and small business loans using
better information and tracking tools, and using the negotiating
secrets of McDonald’s and Starbucks to cut costs. In this session
you will walk away with specific to-dos that can make a difference
for your bank in 2012.
Value Creation: What Community Banks Need to Know
Bob Walters will touch on three different issues impacting community
bank performance and value. First, how are higherperforming
banks currently distinguishing themselves from all
other banks – besides just having better asset quality? Second, he
will offer his thoughts on the key opportunities/threats/issues that
bankers should be focused on over the coming year. And finally,
Bob will touch on what is going on or is likely to be going on in
community bank M&A activities/valuations in the year ahead.
Eight Doable Strategies for Increasing the ROI on
UnderEmployed Assets
Ask a group of senior executives to name the single greatest asset
their organization has and the answer you will most often hear
is, “our people.” Yet, if you also ask that same group of executives
to tell you what is the single biggest source of headaches
they face day in and day out, it is practically a given you will hear
the very same answer, “our people” (although some bankers may
currently substitute “regulators” or “problem credits”).
The challenge for just about every organization and every
leader is how to go about improving the ROI on that important
class of assets, your people. This includes minimizing some of
the risks and weaknesses that are inherently there and that
regularly cut into the expected returns.
In this presentation Keith Hughey will assist in identifying
eight very doable things just about any organization, regardless
of size, can do to put all of that underemployed human capital
to better use (assuming its leadership is actually serious about
being best in class).
Investing Amid Growing Challenges
The Fed’s decisions to keep rates low for at least a couple more
years complicates the management of bank investment portfolios.
In this session Mark Evans will identify investment
strategies for surviving this challenging cycle, while being
mindful of future interest rate risk. It will also cover the latest
regulatory expectations for managing a muni portfolio, as well
as the changing market dynamics for mortgage securities.
Planning for the Unknown: The Emerging Importance of the
Capital Plan in Your ALCO Process
While bankers know that times are changing, the end point of
change has yet to be clearly defined by regulators; especially as
it relates to capital adequacy. There is no one-size-fits-all formula
or methodology for determining an appropriate level of
bank capital. Since regulatory comfort with a capital position
can be quite subjective, many banks have discovered that being
proactive in this regard can and does makes a difference.
In this session DCG will summarize the issues bankers face
when formulating a capital plan, outline the key ingredients of
an effective capital plan and identify capital planning regulatory
hot buttons.
Investment Stress Testing – A Proactive Approach
Stress testing is not just a buzz word. It is an important tool in
portfolio risk management, and regulators expect institutions of
all sizes to demonstrate how they have incorporated its use into
their overall risk management procedures. Rich Berg will focus
on how to proactively manage the risk associated with a bank’s
most complex investments.
Effective Balance Sheet Stress Testing
Financial models are valuable tools for community banks to
measure and manage risk; however, recent black swan events
have demonstrated that models have limitations. In order to
properly manage risk there must be a clear understanding of
a model’s inputs and assumptions, and their potential impact
on key balance sheet risk-return measures. Furthermore, meaningful
stress scenarios/events must be defined and examined
with resolution strategies also developed. In this session DCG
will explore the stress testing of significant interest rate and
liquidity risk model variables from a strategic perspective as well
as in terms of regulatory expectations.
The Impact of Dodd-Frank on Main Street Banks
Consumer Credit Bureau and the Durbin Rule get the most ink,
but other provisions impact community banks. Peter Weinstock
will cover Dodd-Frank capital rules, Regulation Q best practices,
sweep accounts, safe harbors, Bureau’s approach to fair lending
and arbitration provisions, as well as evolving issues including
debit cards. Dodd-Frank is a game changer. Bankers need to stay
current on developments.
Investing Challenges…Sorting Through the Clutter in
Today’s Market
The past several years have provided financial institutions with
a tremendous set of challenges with regard to the investment
selection process. These challenges include the struggle to
locate secure, dependable mortgage pass-thru securities while
trying to balance how these investments may perform in the
future. With premiums becoming a fact of life and the possibility
of escalating prepayments, the ability to look deeper into the
underlying collateral has never been more important. In this
session, Larry Miele will walk through some strategies in the
investment selection process that can help mitigate erratic prepayment
behavior and enhance portfolio performance.
Are You Afraid of Making Fixed-Rate Commercial Loans in the
Current Low-Rate Environment?
As the very low rate environment persists, more borrowers look
to lock in low fixed rates for longer periods of time. This session
will help you to grow your loan portfolio while avoiding overloading
on long-term fixed-rate commercial loans at the lowest
rates in a generation.
Amber Salvi will show how interest rate swaps can be used
to enable financial institutions to offer commercial loans that

Management
CORE SESSIONS
are floating rate to the lender and fixed rate to the borrower. A
key element of the presentation will be specific examples of
how community banks have overcome cultural road blocks in
implementing this strategy.
Protecting the Future: Strategies to Help Keep
Long-term Funding Costs Down
With interest rates at all-time lows, banks have reduced their
cost of funds quite significantly. Are there ways to protect margins
for the long run by capturing these low rates without
unduly hurting current earnings? Is it possible to lock in longterm
fixed-rate funding at low rates WITHOUT taking on
more cash today? Is it possible to reduce the cost of current borrowings
without taking charges or risking the future? The
answer to all these questions is YES. Ray Chandonnet will
explore ways to protect margins, lock in future funding costs,
reduce current funding costs and even protect your Tangible
Book Value using simple strategies involving deposits, wholesale
funding and interest rate swaps and caps.
How “Core” Are Your Deposits?
Understanding your deposit base and how it may respond
to changes in the market is critically important to successful
ongoing balance sheet management and earnings. Today’s
marketplace is unlike any other we’ve experienced and the array
of variables that are influencing customer behavior and deposit
retention has grown substantially over the past few years.
During this session DCG will highlight the relevant issues for
examining the “coreness” of your deposit base and provide
insight into ways you can leverage customer data to increase
your competitive advantage.
Economic Update and Impact on Asset Strategies
David M. Darst, CFA, Managing Director and Chief Investment
Strategist of Morgan Stanley Smith Barney, will discuss the
financial, economic, political, geopolitical, social and individual
forces determining the direction of asset markets in the years
ahead. David will share his insights regarding the outlook for
domestic and global asset markets, including stocks, bonds, commodities,
cash instruments, real estate and alternative/absolute
return investments. This session will also examine the cyclical
and secular outlook for these and other asset classes, with emphasis
on how fundamental, valuation, structural reform, regulatory,
monetary and fiscal policy, and sentiment factors drive investment
performance. David will also provide his thoughts on asset
allocation and investment strategies for 2012 and beyond.
Financial Reform in the Age of Financial Crises
William M. Isaac, who led the FDIC during the banking and
S&L crises of the 1980s, is an outspoken critic of the manner in
which the government handled the financial crisis of 2008-
2009. He is also deeply concerned about current fiscal, monetary
and regulatory policies and the adverse affect they are
having on the economy. He will share his insights on the state
of the banking industry, the political leadership chasm in
Washington and what the future may hold in terms of fiscal,
monetary and regulatory policies.
The following four sessions are the equivalent of a full-day seminar
on balance sheet management. They are intended to create a base
for first-time attendees or as a refresher series for past attendees.
Risk/Return Trade-Offs in Balance Sheet Management
This session is an introduction to balance sheet management
issues and risk/return trade-offs. Subjects discussed
will include: fundamental banking concepts in perspective,
sources of balance sheet risk, discussions of value versus
income protection, regulatory perspectives on risk/return
and recent industry issues.
Measuring and Managing Liquidity
Effective liquidity management can result in increased
income and control over funding costs as well as improved
regulatory exams. Subjects discussed will include: liquidity
measurement and management approaches, strategies to
improve liquidity, marginal cost of funds analysis, strategies
for controlling funding costs, an overview of funding alternatives
for community banks and requirements for a comprehensive
liquidity management process.
Measuring and Managing Interest Rate Risk
Now five years since the Fed dropped their funds rate to 25
basis points, market forces continue to flatten the yield
curve while opportunities to manage margins through
deposit pricing strategies are increasingly limited. For various
reasons, banking institutions remain cautious with
adding credit risk to their balance sheets. As a result, many
are taking on interest rate risk to address margin/earnings
pressures and asking themselves an appropriate question:
How much is too much? This session will help you answer
that very important question by offering you the tools and
know-how to construct an effective interest rate risk management
process – measurement techniques (net interest
income simulation and economic value of equity) as well
as a comprehensive approach to risk analysis and decision
making.
Developing & Documenting BSM Strategies
This popular topic includes a separate two-hour hands-on
session using case studies from actual banks. The first
portion of the two-part session will discuss strategy formulation
and documentation, including such subjects as setting
strategy objectives, determining potential risk/return
trade-offs and tracking results. Strategies discussed will
include lending, investments, deposit pricing, alternative
funding sources and the use of off-balance sheet hedging
instruments. During the second portion of the session,
attendees will be provided the opportunity to work
through two case studies in detail. This is a great opportunity
for exchanging ideas and approaches, and analyzing
“what if” scenarios.

HIGHLIGHTS
GUEST SPEAKERS
Our 28th Annual
With industry margins under siege and the
only thing certain being uncertainty, this
year’s DCG Balance Sheet Management
Conference will provide valuable insights and
strategies for helping your institution manage
a variety of critical business issues, including:
• Dodd-Frank and its game changing
impact on community banks
• Getting the most out of your branch
network
• Investing in the current environment
• Managing customer demands for
fixed-rate lending
• Managing exposure to rising rates
• Understanding the role and use of
interest rate swaps
• Regulatory push for capital plans
• Meaningful balance sheet stress testing
• Understanding and managing your core
deposit base
There will also be sessions on what is in store
for the economy, creating intrinsic value and
what to expect for bank valuations and strategies
for increasing your return on underemployed
human capital.
MONDAY, JUNE 4
The first day of the conference culminates
in what is sure to be an informative look into
the future of community banking through the
eyes of William Isaac, a former Chairman
of the FDIC. And with all hands on deck
aboard the Odyssey Cruise Ship, the evening
cocktail reception and dinner will provide a
perfect forum for mingling with the speakers
and other bankers from across the country.
TUESDAY, JUNE 5
As always, the second day begins with an economic
outlook for the year ahead and implications
for bank strategy. This year David
Darst, Managing Director and Chief Investment
Strategist for Morgan Stanley Smith
Barney, will be sharing his valuable insights.
Please join the DCG team and our accomplished
guest speakers for an information and
idea-packed two days that we know will make
your trip worthwhile.
RICHARD S. BERG is CEO and co-founder of Performance Trust Capital Partners, LLC. Performance
Trust trades and invests over $25 billion annually in fixed-income securities primarily for middle
market institutions.
RAYMOND CHANDONNET is a Principal of Sandler O’Neill + Partners and the firm’s Chief Balance
Sheet Strategist. He works extensively with clients on a range of tactical balance sheet issues
related to earnings, capital, liquidity, investments, funding and interest rate risk. Ray has been
involved in banking since 1986.
DAVID M. DARST, CFA is a Managing Director and Chief Investment Strategist of Morgan Stanley
Smith Barney with responsibility for Asset Allocation and Investment Strategy and was the
founding President of the Morgan Stanley Investment Group.
MARK EVANS is the Director of Investment Strategies at Vining Sparks, a group that provides
research and technical assistance to the firm’s customers and sales representatives. Mark has
written research reports on fixed income securities, portfolio management, leveraging strategies
and regulatory and accounting issues.
J. KEITH HUGHEY has over 35 years of consulting and managerial experience in the areas of
organizational health (human systems), corporate governance, change management,
productivity and performance improvement. Prior to founding J. Keith Hughey Company in
2008, he was a principal in the WHY Group. Keith is the author of the widely-read e-letter
Monday Morning Musings.
WILLIAM M. ISAAC, a former FDIC Chairman, is the Global Head of FTI Consulting’s Financial
Institutions group that provides regulatory counseling and risk management services, strategy
consulting, expert testimony and corporate governance consulting for financial institutions, law
firms and governments. Mr. Isaac is also Chairman of Fifth Third Bancorp and author of Senseless
Panic: How Washington Failed America, an inside account of the banking and S&L crises of
the 1980s comparing that period to the financial crisis of 2008 with recommended reforms to
prevent future crises.
LAWRENCE E. MIELE serves as Managing Director of institutional fixed income with Wells Fargo
Advisors. With two decades of experience as a specialized investment professional in this
sector, Larry strives to assist his clients in selecting clean and dependable securities that complement
their interest rate risk positions and meet their strategic needs.
RICHARD PILLA is a Principal at Paramount Partners, LLC. Richard’s areas of expertise include
tenant representation and site selection, property assemblage, single tenant investment sales
and development consulting. Richard has successfully completed branch network consulting
and real estate brokerage assignments for Fortune 500 retailers and many community and
national financial institutions.
MICHAEL PURCHIA is a Managing Director at Paramount Partners’ Financial Institutions Group.
Mike has provided strategic planning and real estate advisory services to hundreds of community
and regional banks. He was the co-founder and CEO of Commonwealth Financial
Technologies Group, an executive with Chase Bank and co-founder and CEO of Fitcorp.
AMBER L. SALVI, CPA is a Managing Director in the Derivative Products Group at PNC Capital
Markets. As a marketing specialist, Amber concentrates on structuring and executing interest
rate hedging strategies and structured products for PNC’s corporate and financial institution
clients. Previously, she was a fixed income derivative trader for PNC’s Capital Markets Group.
ROBERT L. WALTERS established The Bank Advisory Group in 1989 following ten years at Sheshunoff
& Company where he formed and headed their community bank merger & acquisitions and
bank stock valuation advisory services. Bob has represented hundreds of buying and selling banks
in brokering deals, developing negotiating strategies and formulating pricing and transaction
structure alternatives.
PETER G. WEINSTOCK is a Partner at the law firm of Hunton & Williams. The practice focuses on
corporate and regulatory representation of small to some of the larger regional and national
financial institution franchises. He has written numerous banking articles and frequently speaks
on various banking topics.

REGISTRATION
Register online at darlingconsulting.com or complete the form below.
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DCG is the premier
ALM solutions provider in the U.S.,
working with nearly 500 financial
institutions nationwide. For over 30
years, DCG’s distinctive mix
of education, consulting,
analytical services and
exceptional staff has resulted
in the highest client satisfaction
rates in the industry.
We welcome your
participation in the
28th Annual
Balance Sheet Management
Conference.
CONFERENCE REGISTRATION FEE
for each attendee is: $1200 if payment is received by
April 13, 2012 ($1300 after April 13, 2012)
Please check here if you have special requirements (including dietary restrictions) in
order to fully participate in the DCG conference. DCG will contact you to discuss
your specific needs.
Sunday & Monday Evening Receptions
Please join us for our pre-conference welcoming reception on
Sunday evening at the Marriott Long Wharf. Following Monday’s
session, please join us for a cocktail reception along with dinner &
entertainment aboard the Odyssey Cruise Ship at Rowes Wharf.
Please indicate the total number of people (including attendees registered above).
Circle the number attending:
Sunday Evening Cocktail Reception at Marriott Long Wharf 0 1 2 3 4
6-10 p.m.
Monday Evening Cocktail Reception & Dinner aboard the Odyssey Cruise Ship at Rowes Wharf 0 1 2 3 4
6-10 p.m.
Total Amount Enclosed:
$________________________
$1200 per person by April 13, 2012
$1300 per person after April 13, 2012
Please make checks payable to Darling Consulting Group, Inc. Fee includes continental
breakfast, luncheons & conference materials, as well as Sunday/Monday nights’ social events.
Mail with payment to: DARLING CONSULTING GROUP 260 Merrimac Street Newburyport, MA 01950

CONFERENCE INFORMATION
Who Should Attend
This information-packed two-day conference offers timely insight into
managing your institution’s balance sheet in this challenging environment.
Educational sessions and interactive forums, ranging from basic
through advanced, are designed to generate comprehensive and lively
discussion about the asset/liability funds management and capital planning
processes. Directors, CEOs, CFOs, senior management and analysts
will benefit from this popular Group-Live conference. Attendees are
eligible for up to 13 CPE credits. No prerequisite and/or advanced preparation
is required.
Date and Location: June 4-5, 2012
Boston Marriott Long Wharf, 296 State Street, Boston, Massachusetts
This two-day conference takes place Monday 8:15 a.m. to Tuesday
3:15 p.m. The Marriott Long Wharf is just one block from Faneuil
Hall/Quincy Market and the heart of Boston’s financial district (approximately
2 miles from Logan Airport). Please contact hotel for directions
617.227.0800.
Cancellations
Conference registration fees are refundable only for cancellations received
in writing by May 18, 2012. No refunds will be made after this date. Prior
to May 18th, refunds are subject to a $100 cancellation fee. Substitutions
may be made at any time; please advise us in advance. For more
information regarding refund and/or program cancellation policies or
other concerns, please contact our conference staff at conference@
darlingconsulting.com or by calling 978.463.0400.
Darling Consulting Group, Inc. is registered with the
National Association of State Boards of Accountancy
(NASBA) as a sponsor of continuing professional
education on the National Registry of CPE Sponsors.
State boards of accountancy have final authority on the
acceptance of individual courses for CPE credit.
Complaints regarding registered sponsors may be submitted to the National
Registry of CPE Sponsors through its website: www.learningmarket.org.
Hotel Reservations
For hotel reservations, please contact the Marriott directly at
617.227.0800 or visit their website www.marriott.com/boslw
When making your hotel reservation with the Marriott, please be sure to
identify yourself as a “Darling Consulting Group Conference Attendee”
to guarantee the preferred room rate. Rooms are available on a first-come,
first-served basis.
BOSTON MARRIOTT ® LONG WHARF
296 State Street • Boston, MA 02109
All room reservations for this conference MUST be received no later
than May 11, 2012. After May 11, rooms will be on a space-available
basis and the preferred rate may not apply. The rate of $285 per room per
night is subject to 12.45% Massachusetts tax.
For additional information regarding this conference, contact us at
978.463.0400 or email mmattheson@darlingconsulting.com
Presorted
Standard
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PAID
Newburyport
MA 01950
Permit # 78
260 Merrimac Street
Newburyport, MA 01950
Balance Sheet Management
CONFERENCE
June 4-5, 2012
Boston Marriott
Long Wharf