Over the past year, I’ve had several clients ask for help in addressing the pressure put on with a rising rate enviroment resulting in shrinking NIM and heightened scrutiny by regulators. It’s important to note that building a core deposit base franchise should be a continued focus with a strategy that is aligned to for growth in all economic cycles. This means banks should track not just a loan-to-deposit ratio but an asset-to-deposit ratio due to slowing loan growth and growing investment portfolio assets that will act as a loan surrogate. With the pressue of economic tightening, more depositors have demanded higher rates and as a result the industry has seen a 30% decrease in non-interest-bearing deposit levels since 2021. And as rates have “leveled off” since the spring, and with the delayed Fed tightening that was anticipated earlier in the year, some banks have even elected to trim rates

There’s an old football idiom that says, “the best defense is a great offense” This suggest winning is possible if your team just keep putting points on the board which does have some logic too it.  In discussions of late with community bankers, they seem to adopt this same strategy for achieving their business goals.  For purposes of this illustration, the flip side of gaining points (or revenue) for a bank could be the cost to generate that revenue-or efficiency ratio.  In assessing an institutions performance, generally the lower the ratio the more efficient the institution is in growing profits.   All too often in working with community bank partners, exploring improving efficiency driven by the way they operationally process services is not considered a priority (beyond a budgetary metric). Before you say that isn’t our institution- consider that the most recently published 2022 Independent Banker Association’s CEO Survey.  The top

I was at a risk conference put on by the ABA a couple of years ago and one of the hot topics was the coming new rules and adoption of Current Expected Credit Loss (CECL) accounting standard. At that time, the larger institutions had begun implementing their various strategies and approaches to meeting the new demands. While the larger banks in the conference debated proxies that would be satisfactory be leading economic indicators, or the challenges in completeness of historical data (especially those that grew through mergers), there was the cadre of small bank’s sunk in the corners of the room, chewing on their breakfast sweetbread- relieved that they didn’t have to yet wade into the heady changes on how portfolio health and reserves should be accounted for under this standard approved by the Financial Accounting Standard Board. Well put down the blueberry muffin cause the day is here at

XYZ bank’s competitive edge is our people and how we serve our clients. Sound familiar? In 25 years of working with bank clients- large or small, the steady competitive strategic edge uttered repeatedly how they provide their clients with great service. The follow up question of HOW do you achieve delivering this superior understanding and service is usually framed around a variation of hiring only the best people and being responsive to client’s needs. Yet, when asked what tools or resources are applied to help achieve this level of service- that’s when the blank stares start.  That’s not true completely true.  They will tell me that is why they only hire the best people. Of course, I often wonder, if they indeed go through the time and expense to find, recruit and hire the best people, then why don’t they equip them to succeed? A few baseline statistics for your

XYZ bank’s competitive edge is our people and how we serve our clients. Sound familiar? In 25 years of working with bank clients- large or small, the steady competitive strategic edge uttered repeatedly how they provide their clients with great service. The follow up question of HOW do you achieve delivering this superior understanding and service is usually framed around a variation of hiring only the best people and being responsive to client’s needs. Yet, when asked what tools or resources are applied to help achieve this level of service- that’s when the blank stares start.  That’s not true completely true.  They will tell me that is why they only hire the best people. Of course, I often wonder, if they indeed go through the time and expense to find, recruit and hire the best people, then why don’t they equip them to succeed? A few baseline statistics for your