Pub. 11 2021-2022 Issue 1

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S www.coloradobankers.org 8 FEATURE ARTICLE 3 Tips for Bank Leaders in Today’s Environment BY STEVE KINNER, SENIOR MANAGING DIRECTOR, INTRAFI NETWORK W ith the pandemic ebbing and the economic situation still uncertain, banks are trying to figure out how to position their institutions for the future. In a recent webinar, I spoke with Darling Consulting Group President, Matt Pieniazek and Abrigo Managing Director, Dave Koch about how bank leaders can capitalize on the current environment. While we discussed an array of topics – from the need to reimagine what asset-liability committees can and should be to the importance of thinking differently about pricing – my top three takeaways were: 1. Focus on developing relationships with new customers At the start of the pandemic, deposits at some banks swelled by as much as 20%. Today, excess liquidity remains a concern. However, just over a year ago, many banks had high loan-to-deposit ratios and were wondering from where their next dollar would arrive. Bank leaders can think of their balance sheets as two separate financial statements: a traditional balance sheet and a COVID balance sheet composed of assets and liabilities from new customers. Hidden in those latter financial statements, one layer below the numbers is a huge opportunity. Given the correlation between core deposits and franchise value, bank leaders can bolster their institutions for years to come by taking steps to develop strong, lasting relationships with new customers today. Sure, those customers could withdraw their funds as soon as the economy improves. But even if they do, banks will be closer to winning their loyalty than they were before an economic downturn. During periods of financial or