The Future is Now
By Stephen M. Klein
September 30, 2011
Rocky Mountain High
As I return from a visit with a bank in Denver, just on the eve of our annual CFO Conference, I realized that the future is now … not tomorrow or next year. We all must capitalize on the opportunities before us.
Capital is Still King
Even in these battered financial markets, several of our clients are in the midst of community/shareholder stock offerings. Capital remains essential as banks return to profitability. With historically low interest rates, eroding margins and increasing securities portfolios, capital is critical to future growth and meaningful profitability.
The Best Defense is a Good Offense
Through the economic debacle since 2008, most banks have played defense, cleaned up their portfolios and waited out the storm. Well, I think it is time to play some offense. While traditional loan growth is still tough, SBA lending and offering expanded products and services is one way to combat narrowing margins.
Stop Worrying About the Regulators
Yes, this is me speaking! While recognizing their enormous power and respecting their mission, we can no longer live in fear of the regulators. The best way is to have strong capital, some healthy growth, improved efficiencies and profitability. While questions still persist about the regulators’ view of community banks, being proactive (not confrontational) seems appropriate. My sense is the “fear factor” the regulators operated under the last several years has dissipated as the pace of bank failures has slowed.
Confidence is Critical
Just like the economy, the lion’s share of our challenge is restoring confidence in the banks. I think we should all work together to make this a top priority. As an industry, notwithstanding the current concern about a “double dip” recession, the vast majority of community banks have withstood the storm. Community banks remain a part of the fabric of this country and it is time they started to hold their heads proud again. Truly, the future is now, if we make it happen.
