GRAPEVINE, Texas, June 27, 2007 (PRIME NEWSWIRE) -- This week over 400 financial executives from around the country gathered in Grapevine for the annual Financial Managers Society's Finance & Accounting Forum (www.fms.org). Executives participated in customized curriculum sessions including peer2peer round-table discussion groups that generated thought-provoking conversations and energetic exchanges of ideas. Mark Roe, Regional Director, John M. Floyd & Associates, facilitated a session on Low Margin Market Strategies.
Roe indicated, "There was consensus in the room from participants that the yield curve -- and the resulting low margin market -- continues to be one of the biggest issues facing the industry. And, to address this margin erosion, non-interest income has become an essential tool to maintain profitability."
In a low margin market it is particularly important for executives to consider a variety of solutions to enhance their institution's profitability. The executive group felt there were growth opportunities available for those financial institutions that learn to navigate the maze of financial change. Some of the methods discussed by the executives included:
* Increasing the institution's profitability by identifying ways to increase non-interest income using a variety of methodologies such as: identifying customer thresholds on fees and service changes without "nickel and diming" the account holder; implementing overdraft privilege services; and looking at your branch cash management strategies to take advantage of the rising short-term interest rates. * Fully understanding your operating cost structure and cutting costs as needed. In today's competitive environment, all the participants felt inefficiencies can't be passed on. You can no longer look at operating costs and product pricing separately. * Growing customers/members and increasing product penetration is critical to long-term success. One key point made was that account holders many times don't mind the fees they are charged for various products and services, but they will remember the "experience." It is similar to fine dining -- people don't mind paying for good service, but don't expect them to come back if they are disappointed in the experience. * Using account acquisition programs focused on low cost deposits is one way to increase customers/members. A variety of give-a-ways were discussed including a vacation package. Many in the roundtable discussion commented on the success of pairing an account acquisition program with an overdraft privilege program to boost non-interest income. * Increasing competition from large banks for commercial loans is becoming heated. Large banks tend to price loans low and then aggregate the loans to sell them into the secondary market. This practice has put significant pressure on smaller financial institutions. One suggestion from the group was to conduct a process improvement review to check workflows and operating efficiencies. By improving efficiencies and driving down costs, a financial institution can price loans more competitively.
Roe wrapped up the session by using an example of JMFA's Net Operating Analysis to show participants how to review key metrics to discover additional ways to find revenue opportunities and areas for expense reduction. He summarized, "Executives today face many challenges, and this forum was a great exchange of ideas and take-home suggestions to help them find solutions to some of the most pressing industry challenges."
Executives in attendance were also given their institution's Net Operating Analysis, a valuable tool to help identify areas on which financial institutions should focus to improve the bottom line. Other executives interested in receiving a Net Operating Analysis of their institution should visit www.jmfa.com/noa.aspx.
Roe has over 23 years experience in the banking and financial services industry managing the accounting, budgeting, cash management operations and credit administration functions for community banks in the Dallas/Fort Worth area. He served in a sales management role with Bank of America, leading the banks' sales efforts in the downtown Fort Worth market prior to joining JMFA in 1996. Roe has held various positions with JMFA, moving from Consultant to Engagement Manager, and becoming Regional Director in 2001. He currently leads the sales and client relations' efforts in New York, New Jersey, Connecticut and Pennsylvania.
About JMFA:
John M. Floyd & Associates (JMFA) is a profitability and performance improvement consulting firm and a leading provider of overdraft privilege programs serving more than 2,000 financial institutions in 49 states and Central America. JMFA is also recognized for training, account acquisition, executive placement, fraud protections solutions and earnings enhancement programs, as well as product, service, pricing and technology improvement consulting. As a direct result of our programs JMFA has helped thousands of clients dramatically improve their performance and bottom line. To learn more about JMFA please visit www.JMFA.com or call 800-809-2307.
About Financial Managers Society:
The Financial Managers Society, Inc. is the only individual membership society exclusively devoted to the needs of finance & accounting professionals from financial institutions. FMS' 1,500 members are CFOs, controllers, CEOs, COOs, treasurers, investment officers and internal auditors from banks, thrifts and credit unions. FMS offers career-enhancing education, specialized publications, national leadership opportunities, a voice in shaping regulations and accounting principles, and worldwide connections with other industry professionals.