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How Time Flies!
As we near the turn of a new decade, it is instructive to look back to gain clarity going forward. Just 20 years ago we were on the verge of Y2K—a frightening unknown at the time. Ten years ago we were in the throes of a devastating economic recession that changed many lives. Now, we are entering a decade that begins with new challenges and a significant presidential election.

Where Are Our Economy and Country Headed?
The sense of economists is that we are entering a phase of economic slowdown. The question is: how much of a slowdown? This shouldn’t be a shocker after a decade of economic growth and prosperity. Doesn’t it seem that things run in ten-year cycles anyway? As far as our country, we obviously have numerous macro challenges: wrestling with foreign powers, affordable healthcare, a deficit social security fund, higher education access and costs, environmental issues, infrastructure deficiencies, and a seemingly fractured political system. On the banking front, the industry faces cybersecurity threats, margin compression, and fierce competition for deposits and loans. All of these challenges will no doubt impact our economy and our businesses for the foreseeable future.

What Does This Mean for Bankers?
Uncertainty creates risk for some and opportunities for others. Clearly, now would not seem like a good time to aggressively lend or lower credit standards, despite increased competition. That could be a recipe for disaster. Quite to the contrary, it is a good time to tighten things up and be prepared for a downturn. Having a solid loan portfolio and strong capital will allow you to get through a slowdown in good shape and keep your bank in good standing with the regulators. That, in turn, could create growth opportunities, including organic growth or potential whole bank or branch acquisitions.

Communicating with Your Constituents
One of the things which I have seen work well universally is when management regularly stays in touch with the bank’s various constituents. Whether it be your board of directors, employees, customers, shareholders and, particularly, regulators, keeping them apprised of your game plan is a win-win strategy. I am a big fan of the “No Surprise” philosophy. Explaining to folks your strategy and how you are taking a long-term view of things is normally well received. We clearly can’t control the economy, but we can be prepared to navigate through rough seas when they arise and come out relatively unscathed. Here’s to the decade of the 2020s and a Happy New Year!