Being Small Doesn’t Mean You’ll Be Gobbled Up

FDIC reports that now there are only a third as many banks as there were in 1980. This trend is also true for credit unions.

What is surprising is that studies show that size is not necessarily the determining factor when comparing those that have survived to those that have been liquidated or merged.

In fact, some of the smallest banks have done quite well over the last 40 years.

So, what are the factors that separate a financial institution (FI) that has done well from a financial institution that has ceased to exist?

Based on experience and research I conclude the following traits are common in FIs that have survived the last 20 or so years.

Management of successful FIs:

  • Establishes short term and long term strategic plans with clear and measurable goals
  • Establishes those markets they want to focus on and don’t allow distractions to get in their way
  • Is open to new and sometimes controversial methods to meet their growth and profitability goals
  • Establishes and follows budgets using realistic (based on statistically validated) forecasting methods
  • Uses accurate and stochastically derived risk management tools including Credit Migration and Asset Liability Management modeling service
  • Has accurately identified the expenses for services they provide and has priced those services to cover expenses plus reasonable profit margins

For 25 years, Thompson Consulting and Training (TCT) has provided management teams of small to mid-sized financial institutions with the training, skills and stochastically derived tools necessary to be successful.

TCT provided training, skills, and tools include:

  • Strategic Planning
  • Budgeting and Forecasting
  • Credit Migration
  • Risk Based Loan Pricing
  • Deposit Pricing
  • Asset/Liability Management
  • Loan Delinquency Tracking and Management
  • Loan Policy Formulation
  • Small Business Lending
  • Regulatory Compliance
About the Author
Dennis Child

Dennis Child is a 40 year veteran credit union CEO recently retired. He has been associated with TCT for 25 years. Today, Dennis enjoys providing solutions and training for credit union managers. He also uses his financial credentials and advisory skills to assist the Boomer generation plan and prepare for their retirement years. He and his wife, Geri, live in Logan, Utah. Dennis can be reached at