Lakeside Bank addresses market volatility at annual luncheon

By Jean Lachowicz

Addressing the current trend of unstable financial markets, Lakeside Bank celebrated its 42nd annual business forecast luncheon with analysis and anecdotes for nearly 450 community leaders and bank customers at the Chicago Hilton and Towers on March 20.

Lakeside Bank President Raymond J. Spaeth presented the bank’s 2007 annual report, which indicated record assets of $873 million and a healthy return on average assets of 2.2%. Meanwhile, net loans of $801 million were up $30 million over 2006. The bank’s loan delinquencies were a modest 1.6%, with favorable loan loss reserves of $11 million. Spaeth said the bank has no sub-prime mortgage loans to worry about and has short maturities on its loans averaging about 2 1/2 years.

Spaeth attributes the bank’s successful year in a troubled financial time to Lakeside’s diversity and connection to the communities it serves. “Nineteen languages are spoken at the bank; our staff and officers are as diverse as Chicago itself, and we don’t have a revolving door,” Spaeth said, noting a stage filled with operational managers from the bank’s six branches representing more than 312 years of continuous employment at Lakeside.

“In times like this, we can rely on each other,” Spaeth said in noting the event’s theme, Believing in the Community Called Chicago. Spaeth reiterated some of the world’s financial worries, ranging from inflation and recession to concerns about retirement planning, and said political issues include the upcoming presidential elections and the war in Iraq.

Spaeth then introduced luncheon speakers Tom Haugh, founding partner and chief investment officer at PTI Securities, and Tom Shanahan, senior equity and index derivatives trader at Ronin Capital.

Haugh, known as “the chief,” co-hosts 670 AM The Score radio’s daily Stocks & Jocks: Taking Care of Business show; Shanahan is a regular contributor to the program, which airs from 5 to 6 a.m.

Lakeside Bank is a program sponsor, and one of the bank’s mortgage loan consultants, Andy Karabestos, appears on the show every Thursday.

Haugh began by saying, “There is so much interest in the financial markets today, we haven’t talked about a sports score on the show for about two months. Everyone is asking ‘what’s wrong with the market?’ and people are very concerned.” Shanahan spends significant time measuring market volatility.

He believes much of the volatility comes from rising energy costs and said energy costs likely will remain high. “We are now living in a truly global marketplace,” he explained.

“Our dollar has depreciated in value around the world, so oil, for example, costs more dollars even when sellers are not necessarily getting more money per barrel. When the dollar was stronger against other currencies, each dollar went farther.

“A good portion of our rising food and energy costs depend on the strength of the U.S. dollar.” he continued, “The options market gives us a barometer so we can make adjustments in our investments. Watch oil and metal and energy markets. These are nervous times.”

Both Haugh and Shanahan stressed the importance of individuals understanding their investments and the risks they are taking in those investments. They recommended people consider investment protection, insurance programs, and professional investment counseling.

Shanahan said, “Buy-at-home investments are losing popularity. It depends on who you are. If you are 25 years old and want to play with the market, doing it yourself is fine. If you are 50 or 60 and semi-retired, and you won’t be making any more money soon, you need to really consider working with a money manager. Tools are available to them that can prevent really large losses from happening. Protect yourself.”

Haugh added, “People need to know ways to protect themselves and not be behind the curve of current events. Whatever you do with your money, you are an investor. Even if you keep it in your mattress, there are ways to protect yourself.”

Many audience questions concerned real estate and mortgages. Haugh tried to put the real estate questions into perspective by saying, “Everything in the economy always hinges on everything else.

This isn’t just a sub-prime problem. This is a mass liquidity problem. “Do your own work and research and consult with experts. Make sure you feel comfortable with what you are doing. Sometimes people make generalized recommendations and look for a quick return on investment.

Everyone wants a stock that will go from $1 to $5, or a property that can be purchased with no money down and flipped in a year for three times the purchase price. Personally, I am really careful about giving advice because each person’s situation is different,” he said.

At the pre-lunch reception, the bank demonstrated services including special home mortgage programs and a new remote deposit product that allows a customer to deposit checks in the bank without physically giving them to the bank.

Lakeside Bank operates six branches: Near North (55 W. Wacker Dr.), Board of Trade (141 W. Jackson St.), South Loop (2141 S. Indiana Ave.), Chinatown (2200 S. Archer Ave.), Near West (1055 W. Roosevelt Rd.), and Lakeview/Lincoln Park (2800 N. Ashland Ave.). The website is www.lakesidebank.com.