What is BankForward?
BankForward isn’t just a name--it’s a direction. BankForward is an advisory resource established to help community bankers find a path through the deep woods of an industry in transition. The community banking business is not imploding as some believe, but it most certainly is evolving. On the other side of this challenging wilderness is a sustainable business model that both meets the needs of an engaged community and offers a prosperous future for its stakeholders.
There is more than one path through the woods. Some trails intersect, sometimes they curl backwards... and sometimes they just end. Trees will fall and streams will get your feet wet. What’s essential on this adventure of business survival is direction, consistency…and a compass.
If you’re waiting for the "market" to come back, you’re going to be disappointed. If you're thinking you just have to "hang on" and come through the downturn to get back to the land of plenty, good luck. The "market" will revive, but you won’t recognize it when it does...and you’ll be operating with a woefully outdated service model.
BankForward offers competent guidance for the journey. Some of the markers along the way will be time-honored and conventional; others will be cutting-edge. There will be paths to pursue and others to avoid. Following are fundamental questions that we believe bankers must set out to answer along the journey:
1. What guides your balance sheet strategy to maximize net income and ROI, navigate interest rate risk and demonstrate strategic competence to all stakeholders--including regulators? Pro-active balance sheet planning is a critical competency. The evolving rate environment is uncharted territory. Most community bank CFO's have never needed the IRR and A/L skill sets that now are vital for financial performance and regulatory confidence.
2. Who is your target client, how many do you have and how many are in your service area? Targeting and crafting the client base is key to managing the balance sheet. There is no substitute for defining your preferred client base and executing a plan to cover your service area. Do your core product and service offerings match your target client base? Whose job is that in your organization?
3. What is your bank’s most profitable product or service? It's astonishing how little cost accounting and profitability analysis is undertaken in the community bank industry. Which of your accounts are unprofitable because of overhead costs, fee waivers, maintenance and regulatory controls? Do your key employees understand and agree as to how and when the bank makes money?
Check out the "Opportunities" tab for thoughts on where we believe the industry is headed.