Academic journal article ABA Banking Journal

The Headache: Finding a Way to Diversify

Academic journal article ABA Banking Journal

The Headache: Finding a Way to Diversify

Article excerpt

Banks face financial pressures, and we asked prescribers how they hove been addressing them through repricing, staff reorganization, and diversification. In this, the lost of the three installments, we hear about diversification. You can find the earlier Aspirins at www.ababj.com/blog/277.html, where you can add your own ideas.

Remedy 1: "Recycle"

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Paul Siebenmorgen, president and CEO, Farmers & Merchants State Bank, 8944.4 million-assets, Archbold, Ohio

With loan demand still soft, many borrowers are wanting to reduce debt and not increase borrowings. It's been hard to pull another rabbit out of the hat. This year, our best idea is to mine our portfolio of sold loans to see if it makes sense to rewrite them and refinance the borrowers, and sell them again. It's not new, but it's worked in the short run.

Remedy 2: Sell online ads

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Stacey Bentley, Cedar Valley market president, Community National Bank, $228.4 million-assets, Waterloo, Iowa

Selling ads on our website is a revenue approach we recently adopted. While currently in the test phase, our hope is to sell this space to our business customers, linking viewers to their sites. Ads will be sold on a rotating basis. This idea came about during the planning stages of our redesigned website. Other revenue-generating products in the works are annuity sales and overdraft protection. Neither are new to the bank, as both have been offered in the past. We just felt it was time to reintroduce them into our product mix.

Remedy 3: Build online suite

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Daniel Yates, president and CEO, Brattleboro Savings & Loan, $179. 2 million-assets, Brattleboro, Vt.

While somewhat "behind the eight ball" on this, we recently added online cash management, remote deposit capture, and interbank transfer services to our product offerings. Our next offering, probably after the first of the year, is likely to be mobile banking--although in our rural area, widespread connectivity is an issue.

Remedy 4: Expand your niche

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Frank Campbell, president and CEO, Pilgrim Bank, $171.4 million-assets, Cohasset, Mass.

During the last couple of years, we have expanded our niche in non-owner occupied real-estate lending, particularly rehab to permanent loans. …

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