Robust earnings eliminate a potential impediment on the road toward progress with strategic objectives. The current environment, however, is placing pressure on earnings in a variety of ways. Net interest margin compression, increasing operating expense ratios, higher projected reserves for loan losses, and potential decreases in non-interest income sources all seem to be impacting financial … Continued
While none of us can predict the future, those who anticipate various future scenarios and work through their options tend to fare materially better than those who don’t. Utilizing scenario planning to rehearse for potential future events can boost confidence in decision-making for an unknown tomorrow, while building the strength to handle it along the … Continued
Great news! The elevated rate environment provides financial institutions (FI’s) an opportunity to take advantage by putting new assets on their books at higher rates as existing lower yielding assets roll off. By itself, this helps improve their net interest margin (NIM). However, the other side of the balance sheet is also adjusting to higher … Continued
4 minute read – More and more decision–makers are understanding how important it is to have a financial roadmap – similar to their technology roadmaps – that links to strategy. After receiving great feedback on this topic, we have decided to remind leaders how important it can be to use roadmaps as a way to communicate longer-term financial outcomes to stakeholders and help align … Continued
6 minute read – Strategic plans are all about possibilities, but the possibilities for risks to get in the way are also part of the equation. Knowing that there are risks and knowing that they can impact financial performance means that choices must be made. Those choices are better made after reaching as much clarity and … Continued
4 minute read – Over the last 18 months, the conversations we’ve had with management teams and board members across the United States have focused on concerns around interest rate risk – rates sat at or near 0% for so long that most people in leadership positions were not in decision-making positions the last time … Continued
5 minute read – It’s no surprise that borrowings have increased significantly over the last year. With non-maturity deposits shrinking, institutions have been filling the gap with borrowings. As more borrowings are being added and used more actively, it is important to keep a few points in mind. * First, borrowing strategically can … Continued
4 minute read – Unprecedented. We hear this word used every day. However, if you are a student of history, you know that there are no new stories and we’ve read a version of this story before, except now it has new economic twists and technological turns. The questions being asked, and the assumptions being … Continued
4 minute read – Risk often comes in pairs, and right now, interest rate risk (IRR) and liquidity risk are the dynamic duo putting pressure on financial institutions’ balance sheets. In looking at paths to address these risks, the options don’t always look that great. In some cases, they may create other issues with earnings … Continued
4 minute read – The world is becoming more complex by the minute. As this happens, many Boards are stepping back and asking themselves how their role should continue to evolve to best help the organization. Many Boards are expressing a desire, as well as realizing the necessity, to go to a more strategic level … Continued
