Category Archives: Banking / Asset Managment

By Bill Canty

Asset location pertains to the types of investment assets that are best held in various types of accounts. Asset location is a tax minimization strategy that matches various types of investments with the type of account best suited for that type of investment holding. 

Asset location is about strategically holding investments in accounts where you are likely to achieve the highest after-tax returns. This includes taxable investment accounts, tax-deferred accounts such as a traditional IRA or 401(k), or tax-free accounts which are usually Roth accounts. 

Due to the nature of dividends, interest, or capital gains connected with certain types of investments, it might be most tax-efficient to hold them in one type of account versus another. This is the essence of asset location. 

While it is not always possible to align your entire portfolio in a perfect fashion in terms of asset location for each holding, it does make sense to pay attention to this when deciding which investment holdings fit best into your various accounts. 

The following types of holdings can be well-suited for a taxable account: 

• Municipal bonds or mutual funds holding muni bonds. The interest on these bonds is exempt from federal income taxes, and in some cases from state taxes if they are issued by an entity in the state in which you reside.

• Individual stocks that you plan to hold for a year or more. After this time period, any capital gains from the sale of the shares will be taxed at preferential long-term capital gains rates.

By Jason Snyder, Esq.

As the largest living generation in the U.S.—making up 22 percent of the population—and collectively having lived through several “once-in-a-lifetime” crises, the millennial generation has been forged into some of the most adaptable planners to date. 

From setting personal and professional goals, managing and interacting with their finances and investments, to purchasing their first homes and starting families, many in this group are committed to planning further into the future than ever before.

Despite this, 41 percent of individuals ages 18-34 have never discussed estate planning with anyone. While grim, this number did see some downward motion in part due to the COVID-19 pandemic, as 32 percent of adults under the age of 35 said they only engaged in estate planning due to the pandemic.

So, with these numbers, are millennials right in thinking that they do not need estate plans? What are some of the most common concerns that millennials have when looking to plan their futures? While it’s impossible to capture all aspects of an estate plan in a single article, below is a brief snapshot of why estate plans might be the logical next step for any millennial looking to secure their future.

Broadening our scope, just 33 percent of Americans have a will or living trust, despite the fact that more than 50 percent believe estate planning to be at least somewhat significant. One in three respondents, when asked why they don’t have a will, said they don’t have enough assets to leave behind. 

First New York Federal Credit Union has opened a new in-school branch at Burnt Hills-Ballston Lake High School. 

The new branch is staffed by student volunteers, who will gain valuable experience by providing basic banking services to their fellow students and staff from the school and district, officials said.

The Spartan Branch joins Schenectady High School’s Patriot Branch as area high schools that now have First New York branches. Bank officials said the in-school branches provide a safe environment for student volunteers to practice real-world skills in banking, marketing, business and more.

Students in the Personal Finance Management and Investing 101 classes, which are focused on teaching financial literacy, money management and responsibility as well as how to be financial savvy with investments, will run the bank for their peers and BH-BL staff.

Banking practices can begin for many students at the elementary schools where student banking options are available. And, in sixth grade, students take a financial literacy course that touches upon money saving, how to manage a checking account, interest rates, taxes and much more.

BY Michael Poveda

According to the UHY 2022 Middle Market Trends Survey, over 20 percent of business owners have explored the option of outsourcing their accounting function and given today’s challenging business environment, that percentage is expected to grow.

Today’s business owners have their hands full just focusing on sustaining and growing their businesses, with little time to focus on their businesses’ accounting operations, despite that function’s importance. In fact, according to a survey by SCORE, a small business mentoring organization, a full 40 percent of small business owners say bookkeeping and taxes are the single worst part of owning a business. 

Yet, it is data from the accounting operations that should lay the foundation for important business decisions. Given that and given that few companies have full accounting capabilities in-house, outsourcing their businesses’ accounting functions is increasingly more attractive to business decision makers.

That is where Client Accounting Advisory Services (CAAS) comes in. CAAS allows a business to outsource its finance, back-office and accounting operations. It is a service offered by many accounting firms. It has benefits beyond outsourcing those activities. 

Since CAAS gives the accountant involvement in all data, transactions, trends, monitoring, capturing and analysis of the business’ financial activities, the accountant is in a unique position to provide informed advice on all business decisions and intelligent input on risk/reward situations. 

By Jill Nagy

Community Bank NA opened an office in Saratoga Springs last November, filling a gap between its outposts in Latham and Whitehall and providing a more convenient location for commercial banking customers in Saratoga and Warren counties. Jeffrey M. Levy, Community Bank’s newly named president of commercial banking, who heads the new office, said that it “demonstrates our commitment to the Saratoga-Glens Falls community.”

The office is located on the second floor of The Washington building, 422 Broadway, upstairs from Northshire Bookstore and Kilwins. At least initially, the office will serve commercial clients with lending, insurance and wealth management services. The office will not accept deposits and there are no teller cages. Its four employees are “just the start,” according to Levy. Two of them will concentrate on making loans and one each will provide insurance and wealth management services. 

Community Bank has 11 branches in the Capital Region, including Albany, Latham, Whitehall, and Lake Placid.  Their southernmost office is in Albany’s Corporate Woods. Their community focus places them in non-metropolitan areas, i.e., not in large cities. In addition to the Capital Region, the bank has offices in Northeast Pennsylvania, Vermont, Western Massachusetts, and every county in Upstate New York, Levy said.  

There are no immediate plans for further expansion, Levy said, but noted that Gens Falls “fits in with our whole model.”

Levy has been with Community Bank since 2018. Before that, he held executive positions with NBT Bank and M&T Bank.  “Today, I am from Saratoga Springs,” he said. He has lived in the city for three years, after 21 years in Guilderland.

by Kenneth J. Entenmann

As the world watches the events unfold in Ukraine, it goes without saying that what we are witnessing is tragic and the human toll is something that cannot be understated. Military action always brings uncertainty, and it is difficult to assess the full extent of the situation while it is unfolding. The Russia-Ukraine conflict is no exception, and it has resulted in stunning market volatility.

However, strictly from an investment and economic perspective, geopolitical events rarely cause major bear markets or recessions. The markets tend to view them like natural disasters. That is, they are highly regionalized, they cause significant loss of property and life, but tend to be short-lived. 

Historically, dating back to the Iraq invasion of Kuwait in 1990, there have been nine global military “interventions.” The time period from the onset of the event and the market bottom ranges from 0 days to 70 days. For example, the market bottomed out 10 days after the 9/11 attack in 2001. The average decline in the S&P 500 is -6.9 percent. Importantly, the markets tend to recover quickly. 

The average one-month return after the bottom is 2.2 percent, the three-month return is 5.4 percent and the one-year return is 13.5 percent. Like all geopolitical events, the Russia-Ukraine conflict is impossible to predict. That said, it is likely to follow history’s pattern for a few reasons.

First, when we look at the global economy as a whole, the Russian and Ukrainian economies are small. The U.S. economy is the largest in the world at $21.4 trillion and nearly 25 percent of the total global GDP. By comparison, the Russian GDP is $1.7 trillion and 1.94 percent of global GDP while Ukraine’s GDP is estimated to be $156 billion. 

By Carissa Conley and Bryce Kahler

Every year, business owners across the country try to find ways to lower their taxable income and pay less taxes to the government. The easiest way to reduce tax is through operating expenses, which are necessary to run the business on a day-to-day basis. One of the most important expenses a business owner should take time to understand is depreciation: the expensing of business assets. 

Depreciation requires you to spread the cost of an asset over its useful life as it loses value. The easiest method to understand is straight-line depreciation, where the cost of the asset is expensed evenly over its useful life. 

If all assets were depreciated using the straight-line method, the business would have the same depreciation expense each year until the assets were fully depreciated.  If the asset had a five-year life, it would take five years to get the full benefit of its cost.  

But there are a lot of other depreciation methods and tax elections available to the business owner that create opportunities to manage their taxable profit in the year of purchase as well as in future years.  

There are current tax laws that offer more favorable options to accelerate depreciation and immediately expense the cost of assets, thus lowering your taxable income for the year.  It also enables you to match the expense with the cash outlay or, maybe even better, expense the property faster than you’re repaying the debt and thus put more money in your pocket now (which is why real estate investments are attractive). 

By Jill Nagy

Area banks have been upgrading their online and digital services but the big push in 2020 appears to be administering Payroll Protection Plan (PPP) small business loans.

“It was an all-hands-on-deck situation; we recruited everyone to help out,” recalled Charles Wait Jr., president and CEO of Adirondack Trust Co. The bank processed $100 million worth of loans in the first round and he expects another $50 million during the second round. “It’s been an interesting 12 months,” he reflected.

Similarly, Marc Monahan, Glens Falls and Saratoga regional executive for NBT Bank, welcomed the PPP program as a way to stay in connection with existing customers as well as a way to bring in new ones.

“They need an account with us but they can open an account and apply for a loan on the same day,” he said. NBT has a dedicated website for PPP loans and, according to Monahan, they processed more than 3,000 applications last spring. 

“The past year has altered how we communicate with our customers,” Monahan said.

NBT has enhanced its mobile banking services, including mobile deposit (deposit checks using the camera on your smart phone), online payment services, and online bill paying. The drive-throughs are open and customers can visit the bank lobbies by appointment. However, he finds that customers increasingly prefer using electronic services.

By Jill NAgy

A new Glens Falls branch of Adirondack Trust Co. is nearing completion at the corner of Main and Pine Streets.

The branch will be a two-story building with a drive-through window and plenty of parking, according to Charles Wait Jr., the bank’s president and CEO.

The building will replace the current branch on Maple Street. That branch will remain open until the new building is ready, probably in mid-April, Wait said.

The present location does not allow for a drive-through and there is limited parking.

The added space at Main and Pine will allow Adirondack Trust  to provide additional services. For example, Wait said, loan or mortgage officers can be posted there.

A ribbon cutting is planned, along with grand opening promotions in partnership with other businesses.

By Lisa Balschunat

In September 2020, to assist small businesses affected by coronavirus restrictions, the U.S. Department of Commerce’s Economic Development Administration  invested $22.8 million through the Coronavirus Aid, Relief and Economic Security (CARES) Act funding that created a revolving loan pool to help small businesses.

For the past six months, $2.94 million of those funds have been managed in the north country by the Lake Champlain-Lake George Regional Planning Board (LCLGRPB). 

Planning Board Director Beth Gilles said there is plenty of money still available for small businesses in the eight-county area of Clinton, Essex, Hamilton, Jefferson, Lewis, St. Lawrence, Warren and Washington counties. Funds target working capital projects, equipment, and purchases related to COVID-19 issues, such as personal protective equipment (PPE) and facility upgrades.

Entrepreneurs and small business owners who may be retooling their business models could benefit from the CARES dollars. 

“A restaurant owner who expanded seating with outdoor dining in the parking lot last summer might now decide permanent outdoor seating would be good for business. This loan program could cover that,” Gilles said.