PFM Asset Management LLC Launches First Ever Community Bank Investment Index

New quarterly securities index will provide a readily available, independent benchmark for comparison of community banks’ investment exposure

Philadelphia, PA – PFM Asset Management LLC (PFMAM), providing investment management and consulting services to state and local governments, non-profits, and other community-based institutions, today announced the launch of a new Community Bank Investment Index (PFM CBI Index) - a first of its kind tool that will enable investors, regulators and market participants to easily assess the risk and return profiles of 5,000+ institutions within the $540 billion community banking industry.

The new securities index is comprised of the constituent investments community banks nationwide are required to report at the end of each fiscal quarter. PFMAM’s goal is to provide a readily available, independent benchmark for peer comparison of community banks’ investment exposure and performance.

“PFMAM serves communities by helping to ensure their public institutions are equipped with the right tools to be financially secure,” said John Bonow, CEO of PFM Group. “This is really a natural extension of that – equipping community bank portfolio managers, as well as everyone else with a stake in the industry, with easy access to the information they need to evaluate their relative investment performance and gain valuable insight about their portfolios.”

Until the creation of the PFM CBI Index, there had been no consistent method for a community bank to objectively evaluate how its investment portfolio compares to its competitors. Instead, community bank staff members – many of whom are already being stretched thin due to rising operational and regulatory costs – have been forced to rely on anecdotal evidence and outside counsel from financial advisors or brokers to make their assessments. PFMAM’s Anthony Pappion, who previously performed various treasury functions at community and regional banks said, “Having a tool like the PFM CBI Index would have allowed me to evaluate portfolios against bank peer groups that can be customized to all asset sizes and with regard to asset exposure, accounting treatments, stress tests, historical trends and index performance.”

“As an asset manager, we regularly advise our clients on where and how to invest,” said Jonathan Sundberg of PFMAM. “In order to provide the best possible advice in the community banking space, we believed a benchmark reference on which to base our assumptions was needed. With no such reference guide in existence, and with PFMAM having the capabilities to produce one, we are now fulfilling that need.”

Although the aggregate size of community bank balance sheets is much smaller than the large national banks, community banks play a critical role in lending to small and mid-size governments, non-profit institutions, and businesses. Particularly outside of major cities, community banks across the country have provided critically needed funds to keep businesses and local job markets thriving.

“This is an industry that has faced a number of challenges in recent years,” Alfred Mukunya of PFM Swap Advisors LLC said. “Our hope is that this tool will make it easier for these institutions to thrive and strengthen the communities they serve for decades to come.”

“What excites me the most is, because community banks are such lean organizations and their managers are pressed for time, anything they can use to easily gain unbiased, independent information is extremely valuable, and this accomplishes that goal,” said Sundberg.

PFMAM will partner with the Financial Managers Society to distribute the index shortly after each fiscal quarter closes and data becomes available.

About the PFM Group
The PFM Group of companies is a national leader in providing independent financial advice, investment advisory services, and management and consulting services to local, state, and regional governments, non-profit, and other institutional clients. We are proud to help our clients meet their financial challenges with a broad array of products, backed by unquestioned professionalism and outstanding service. For more than 40 years, the PFM Group has believed that the client’s interests always come first. Service is our top priority in everything we do, and it is delivered in every relationship following our core principles of Independence, Initiative, and Integrity.

The PFM Group of companies currently employs more than 600 individuals, serving a broad base of clients from locations in every region of the country.

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