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STRATEGIC PLANNING
CLIENT BankStar Financial, Elkton, SD TOTAL ASSETS $45,000,000 CHALLENGE The bank’s Strategic Planning process identified a critical issue for its long-range survival and success. It needed to pursue the establishment of a branch in a growing community. The bank realized that it needed to develop several internal systems in order to ensure its success when it established a branch. These systems included:a financial management tool – Profitstar, human resource management system, Backroom operations, data processing enhancements, marketing and advertising plan, website, sales culture, and leadership development. SOLUTION One of the first developments that bank initiated was to select a financial management tool. The bank selected Profitstar as it choice. Working jointly with PMC, the bank expanded the general ledger, ensured the download of data was clean, created custom ratios, and various reports provided by Profitstar. A formal ALCO structure was developed and also identified pricing opportunities to improve Net Interest Margin. RESULTS Once Profitstar was in place and confidence in the accuracy of the data was confirmed, various projections were run to determine the optimal pricing configuration. The new projections reflected an increase in Net Interest Margin of over 40 bpts. or equal to approximately $75,000 increase in Net Interest Income over a 12 month period. The bank actually realized a NIM that was greater than the projection by the end of the 12 month period.
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