Community banks have experienced three tumultuous years. As you move into 2011, consider any or all of the following as top initiatives for your financial institution:
- Remember, capital is your most precious resource, and it is imperative to determine if the capital devoted to support various lines of business is or will be capable of supporting a sufficient ROE.
- Have a firm understanding of the financial risks facing your financial institution such as interest rate and credit risk.
- Understand customer retention statistics and measure the retention against an internal benchmark to determine if changes to service or products are warranted.
- Determine a methodology to assess if each product line is meeting ROE goals. Profitability can be changed either by collecting what you are entitled to or changing pricing to meet ROE objectives.
- Have the right people doing the right things.
- Is diversification appropriate for both credit and funding sources?
- Challenge the effectiveness and economic viability of your branch system.
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Length: 7 pages (PDF 2790 kB)