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Echo Partners Community Bank Blog

    You can’t just compete on NIM anymore

    [fa icon="clock-o"]} [fa icon="user"] Howard Lothrop [fa icon="folder-open'] deposit profitability, analytics

    Examination of financial condition Stethoscope on pile of U.S. twenty-dollar bills isolated on white backgroundYou can’t just compete on NIM anymore…

    …You must also compete on noninterest income and expense. And #DepositProfitability gives you the advantage you need.

    Yes, I know community banks outperform on YEA and COF. But it’s not enough. You can’t ignore the rest of the income statement and focus only on your biggest strength.

    Imagine a football team with the best running game deciding to ignore the passing game. Or a great basketball team ignoring the 3-point shot. Neither one would win any championships. Probably not even make the playoffs.

    Deposit profitability gets your noninterest game balanced out. Balance is what we need to offset the cyclical nature of our NIM.

    I’m certainly not saying to overlook your existing net interest margin strengths. By all means exploit your advantages there. It’s just that in today’s competitive banking landscape you can’t afford to overlook noninterest income and expense.

    Fee income is a key component of noninterest income. The real challenge underlying fee income is knowing who to charge and who not to charge. That’s one area deposit profitability pays big dividends. Another key area is understanding where to invest and where to cut back in your delivery channels.

    Having these insights makes you a better and more profitable banker.

    Do you want to grow your bank profits with little to no risk? Click Here to  Discover How
    Howard Lothrop

    Written by Howard Lothrop

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