Gregory Garcia, Managing Director at FinPro presented Key Strategic Planning Initiatives in 2013 following dinner. Greg gave an overview of the strategic planning process. He discussed the concerns that many bankers have raised in light of the current banking environment. For example, when will loan demand return? Will rates stay low forever? How do you remain competitive? Greg stressed that planning is critical although all banks cannot implement the same strategy. “Best in Class” strategic plans are derived from a flexible, pro-active methodology that builds value by lowering risk while meeting regulatory demands.

Greg laid out the potential options available to a bank.  He noted that historical performance should be used as the initial basis for developing a model. He recommended stress testing the scenario for the selected model. Your bank’s budget, business plan, strategic plan and stress test should utilize a single integrated data source for consistency and simplification. Examples of areas where FinPro utilizes stress testing include deposit runoff, net interest margin compression, loan charge-offs and various interest rate scenarios. Data integrity is of paramount importance for achieving valid stress test results. Greg recommended investing the time to “get it right”!

Greg noted that a comprehensive business plan should address the following key areas: economy, regulatory, capital, asset quality, loans, investments, funding, liquidity and merger and acquisition. He then discussed the factors that management should consider in each of these key areas.

The afternoon mini-session featured a timely presentation regarding the future of mobile banking. Phil Pratt from Strategy Corps presented attendees with the challenges facing community banks in regard to checking accounts. He noted how a checking account represents the key customer relationship and that banks “win” customers by utilizing “relationship” checking. Phil described how social networking and mobile banking will combine to be important factors in maintaining customer relationships. He noted that by the end of this year, 43% of customers are expected to have performed a smart phone transaction.