RankingBanking 26 Digital - Flipbook - Page 11
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“For every bank,
for all of time, the net
interest margin has been
the driver of success.”
Even so, he notes, high-performing banks have
found success by gathering sticky deposits and ensuring that their relationships aren’t just based on
loans. “The ticket for most banks is that they have
to get the loan and deposit relationship synced,”
he says. “You can’t just talk about, ‘We’re going
to get the deposit account later.’ You have to get it
now. You have to incent and reward behavior. You
Charles “Skip” Hageboeck,
City Holding Co.
have to pay your people to bring in deposits.”
People Focused
Keeping a strong NIM despite today’s competition is a “constant battle,” says Community
Trust’s Gooch. But it is one the bank succeeds
against irregular cash flows.”
The industry is “fragmented. It’s large, it’s
in despite customers getting more rate sensitive
over the years.
complex, at least to other people,” he says, which
“As long as you take care of them, provide them
is what makes it compelling. “We live and breathe
their financial needs — whether it’s on the lending
this vertical every day,” he says, and clients are
side, whether it’s the brokerage side or the trust side
able to call him and the management team directly.
— they’ll have at least a degree of loyalty,” he says.
That level of service “hopefully earns me the
Even as more of its customers opt for Commu-
right to ask for your operating and escrow ac-
nity Trust’s online banking tools, the bank remains
counts,” he says.
a presence at local events, he says.
It’s “hard to find a scoreboard” in its markets
Not the Only Metric
For all the strengths of NIM, it’s far from the
only way to measure a bank’s performance.
Sengupta, the Kansas City Fed researcher, says
the “meat-and-potatoes banking model” of taking
deposits and making loans boosted some banks’
without its name, he says, and bankers volunteer
in local organizations consistently. Gooch notes
the generations of customers and families that the
bank has grown alongside with.
“If they’re successful, we’re successful, and
we’ll continue to grow,” he says.
NIMs as rates rose. But those whose NIMs under-
It is a “tough model,” he acknowledges, and it
performed did better on their fee income, including
requires investing in the same types of online tools
with capital markets operations.
that big banks offer, he says. But “the biggest tool
“Whichever strategies banks choose to apply,
both are profitable,” Sengupta says. “It’s just that
the sources of profits are different.”
that we have is our people,” he says.
“It’s not the easiest model to do, but if you’ve
got good people, it’s one that works,” he says.
It is why Brean Capital’s Marinac tends to pre-
“It allows us to perform in the upper echelon
fer looking at pre-provision net revenue — which
compared to other banks our size. We hope to
includes fee income as well as banks’ general ex-
continue doing that.”
penses. NIMs are a “piece of the puzzle,” Marinac
says, but investors can sometimes get too focused
Polo Rocha is journalist and contributor to
on margins rather than more holistic measures.
Bank Director.
