With over 600 impaired or failed banks and I estimate another 800 to 1,000 heading that way, there is no questions a disconnect exists between banks needing help and what they are doing about it exists. Pretty much the Grand Canyon of disconnects that, if not dealt with NOW, will have the pundits talking about a double dip recession actually working at Baskin Robbins in about two years.
So, here’s my: TOP FIVE THINGS BANKS SHOULD BE DOING
1) Clean House.
A good place to start would be to take a hard look at and improve their Balance Sheets.
2) Implement Best Practices.
The government estimates that only 10% of banks have” best practices” in place and less than 10 percent of these banks are prepared for the audit process. Here’s my blatant pitch: Hire a qualified consultant or group to help. One that offers coaching and change management would be a good start. If we aren’t a good fit, we have a great network to call on.
3) More Transparency:
Banks need a transparent vehicle for foreclosures and loans. There is a lot of investment capital stuck in the pipeline with willing buyers, although often with opportunistic motives and unrealistic expectations. Investors have been far too willing to provide banks with valuable inlel as part of the due diligence process.
4) Improve Documentation.
Accessibility of knowledge for banks right now is usually limited to the appraisal valuation method. Lacking a sophisticated and expensive Scandocs system, outsourcing is probably the best and most cost-effective solution and we have a great resource. Guidelines are being set that will result in faster and more accurate responses to offerings and potentially higher ratios when compared to banks’ and the FDIC’s Desired Investment Value (DIV).
5) Utilize Existing Programs.
The FDIC is moving to roll-out the Risk Sharing Program. At W+A, we are already familiar and ready to assist you. The Troubled Bank Program and others are also tools to help you. Albeit many of these programs feature that special governmental agency language that is so helpful, they are still viable options for certain banks assets. If you find this to be the case or just don’t know where to start, W+A can help.
I estimate, with elections approaching, banks have about 18 months to make decisions that will have significant impact on their futures. How will the Fed view their performance? Will they even survive? Visit Winslow + Associates Financial Group www.winslowassociates.com and we will be happy to provide a no-obligation, FREE needs assessment of your bank’s present situation. We can help you clean up your balance sheet, and get your general ledger (GL) and profit and loss (P&L) statements ready for when the feds come knocking.
David “Dave” Winslow worked for the Department of Housing and Urban Development (HUD) and the RTC and served on the Oversight Board for, what was then, the largest resolution in U.S. history; The Sunbelt Savings FSB receivership in Dallas, Texas. W+A is based in Kansas City, with locations in Dallas and Los Angeles.