For Banks, What Is Top Quartile Performance?
What is top quartile financial performance? I am often asked this question, and top quartile performance appears as stretch goals in many strategic plans. And I say bravo! Nobody wants to be average. Usually top quartile performance is compared to a bank’s or thrift’s pre-selected peer group. Executive compensation is often tied to it. I […]
BS: Focus On Execution First
Over 10 years ago Larry Bossidy, former CEO of Honeywell, and Ram Charan, an academic and consultant, wrote the book Execution, The Discipline of Getting Things Done. As a student of strategy, I read it quickly. One thing kept gnawing at me, though, that still gnaws at me today. Get what done? In November, Rosabeth […]
Bankers: Ask What Customers Want. Then Do That.
Steve Jobs showed customers what he thought they would want, and convinced them that they wanted it. An unlikely scenario for bank products, wouldn’t you agree? So what do your customers want? This presumes you know who your target customers are. Bankers used to try and be everything banking to everyone in the towns where […]
Banking’s Top 5 in Total Return to Shareholders: 2017 Edition
For the past six years I searched for the Top 5 financial institutions in five-year total return to shareholders because I am weary of the persistent “get big or get out” mentality of many bankers and industry pundits. If their platitudes about scale are correct, then the largest FIs should logically demonstrate better shareholder returns. […]
Checking Analysis: The Betamax of Bank Products
Don’t think about how it is. Think about how it should be. Now apply this philosophy to business checking. If we did, would we continue to offer Analysis Checking or some variation of it? Yet we do. Even though the Dodd-Frank Act eliminated Reg Q, that pesky reg that did not allow banks to pay […]
Bank Dividends: Go Ahead and Drink The Kool Aid
Dividends are no longer sexy. So says Rob Isbitts, a Forbes contributor in a recent article that he penned. Not sure they ever were sexy, but he has a point. Read the article, make your own judgement. Or read on. Today I had another debate with my colleagues about discount rates. You know, those rates […]
Schmidlap Bank, A Division of Community Bank
“We want to keep our charter because the OCC is a more distinguished regulator.” Seriously, that is what a bank chairman told me when arguing to keep his bank’s charter during merger negotiations. But I try not to judge. Perhaps, if I thought the argument weak, which I did, there was something else behind it. […]
Guest Post: Financial Markets and Economic Update by Dorothy Jaworski
Quarterly Financial Markets & Economic Update- October, 2017 I love this time of year. The leaves are changing colors and soon fall will give way to winter. I cannot say I love the cold, bitter winter, especially when the roads are bad from snow and ice. The markets have not given way to anything, with […]
Bankers: What’s Your Art of War?
I will occasionally quote Sun Tzu from his seminal book, The Art of War. I am not trying to imply that winning battles and winning in a competitive marketplace is the same thing. One leads to lessons learned, perhaps a loss of wealth, but never death and conquest. But Sun’s wisdom cannot be ignored. He […]
Bank Lending: Shifting Emphasis from CRE to C&I
Although bank commercial real estate (CRE) lending has been more profitable than commercial and industrial (C&I or Business Loans), both now AND immediately after the financial crisis, regulatory CRE guidelines are causing financial institutions to consider a switch of emphasis to Business Lending. Here are my thoughts on how to do so. Your thoughts? ~ […]