Just like many businesses and organizations do, we’ve just came out of strategic planning sessions for our business year in December.
One of the interesting things we came across was the difference between goal measurements.
How often have you seen this?
We want the bank to earn $________ in 2019.
That’s great, and you should set goals like that for your bank. How would it change your bank if every revenue goal had to be accompanied by two or three goals fed by actionable items? These goals would tie into that bigger goal, but your entire team would feel they could actually influence the larger goal.
Some ideas of actionable goals include:
- Our loan department will assess credit risk more stringently, ensuring we have fewer bad loans and therefore lower charge-offs.
- Each department head will review all overhead expenses annually for potential cost savings.
- Our ALCO will review loan and deposit pricing practices to help maintain a healthy net interest margin.
- Our operations staff will not waive more than X% of assessed charges and fees to improve fee income.
We want to ensure you have a great 2019, and it’s not too late to schedule a strategic planning session with our team. Don’t hang a big, hopeful goal out there without some strategic goals that your team can effectively tackle to make the big goal come true.
We’ll be happy to teach you how to do it. Give us a call at (918) 791-0699.
Dustin Matthews, President
On to the Bottom Lines Up Front (BLUFs) for January 17, 2019:
Fed’s Bostic sees one US interest rate increase this year (source)
- The Federal Reserve may only need to raise interest rates once in 2019, Atlanta Fed President Raphael Bostic said on Monday, focusing on business executive’s nervousness about the economy and a global slowdown as factors that may hold the US central bank back.
- Though US economic growth was faster than expected in 2018 and prompted the Fed to raise rates 4 times, Bostic said his business contacts appear less confident about the coming months.
- Fed Chairman Jerome Powell said the central bank would be “patient” as it assesses what to do next.
- As the Fed’s short-term policy rate approaches neutral, Bostic said the central bank needs to be careful not to go too far and unintentionally tighten credit markets too much. “This is an area where we have to watch robustly. If It’s 2.50% and you go to 2.75 or 3%, you might have tripped beyond neutral and that would be contractionary.”
Federal Reserve debated whether December rate hike was a good idea, Fed minutes show (source)
- The Federal Reserve voted unanimously to hike interest rates in the 4th quarter by another quarter of a percentage point. This hike was the fourth in 2018.
- It appeared that the Fed was able to maintain a united front, but minutes released on January 9th revealed that the members of the Federal Open Market Committee were in deep debate before agreeing to lift rates again.
- “Participants expressed that recent developments, including the volatility in financial markets and the increased concerns about global growth, made the appropriate extent and timing of future policy firming less clear than earlier,” the minutes said.
- The Fed decided to raise rates, even though US stocks fell toward the end of the year, posting their worst December since the Great Depression.
Federal Reserve’s Powell predicts no recession in 2019 (source)
- Federal Reserve Chair Jerome Powell predicted the economy is not going to plunge into a deep downturn this year.
- “I don’t see a recession” in 2019, Powell said January 10th in an interview at The Economic Club of Washington D.C. “The US economy is solid and there’s good momentum going into this year.”
- Several prominent economists and investors have said there’s a heightened chance of a recession by 2020.
- Powell stressed the Fed is “watching” the situation closely and monitoring potential cracks in the economy.
- Powell warned that if there is an “extended shutdown,” it would have an impact on the economy that “would show up in the data very clearly.”
For the first time since 2006, not a single US bank failed last year (source)
- Not a single bank failed last year, a rare occurrence that highlights the strength of the US banking system.
- 2018 was the first year since 2006 and only the third since the Federal Deposit Insurance Corporation was founded in 1933 that a calendar year passed without a bank failure.
- The peak year for failures after the financial crisis was 2010, when 157 institutions collapsed. Before that, during the savings and loan crisis, the peak year for failures was 1989, when 534 lenders failed.