Pub. 10 2021 Issue 6 11 Stanley Strecker and Jim McLaughlin with Central States Capital Markets, Prairie Village, KS. Alan Deines, Beneficient Fiduciary Financial, Hesston, KS; Matt Lephardt, Patrick Smith and Cole Thompson, BOK Financial, Overland Park, KS. Presenter KC Mathews, Commerce Bank, Kansas City, MO. Current KBA Chairman Mike Ewy, Community State Bank, Coffeyville, KS. Historic cycles may give us some clues to the future. While this cycle is a bit unique due to the pandemic, nevertheless, since WWII the average cycle has lasted 54 months. With that in mind, the current cycle could be moving into its last two-thirds. History tells us that equity performance moderates in the last two-thirds of the cycle, yet returns have been far superior to bonds and cash. We may see some slowdown in the data as the economy deals with the delta variant, shortages, and inflation. Offsetting these issues: continued strong demand for goods, lean inventories, and low borrowing costs will support GDP growth. We are in the Great Recovery phase, and it will continue into 2022. Day two of the conference began with Sean Payant, Haberfeld’s session, “Upside Down Thinking on Efficiency: Change Your Priorities to Change Your Results.” Financial institution executives spend considerable time thinking about strategies to improve efficiency to improve overall profitability. Often, this includes a focus on expense reductions. “Once a financial institution can no longer materially improve its efficiency ratio by further reducing costs, what’s next?” asks Payant. He then shared his thoughts on a solution. Rather than focusing on reducing expenses, focus on increasing core/PFI customer relationships. The majority of banks could significantly increase core customer acquisition if they put the energy effort and budget toward this goal. In the end, you will make more money, AND your efficiency ratio will improve. Jackson Hataway, Missouri Bankers Association, presented a talk on “Competition and Success in a New Landscape.” Banks and new competitors are entering markets and business areas they have previously been unwilling to undertake. There is a lot of new penetration into verticals or geographies that were already owned by banks OR that banks felt like they could not get. Hataway emphasized how banks need to consider how this impacts their competitive stance and what it will mean about their subsequent growth efforts. The conference closed with an inspiring presentation, “Brace for Impact,” by Dave Sanderson. When U.S. Airways Flight 1549, or Continued on page 12
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