Advice

Midyear Check-In: Why It Matters and How to Do It Right

Posted on July 15, 2024 Published by

As the midpoint of the year is now in the rearview mirror, banks and credit unions have a good opportunity to conduct a midyear check-in. This process will help for evaluating progress, adjusting strategies, and ensuring that the financial institution remains on track to meet its annual goals. Here’s a quick guide on what community based financial institutions should do for this Midyear Check-In: Why It Matters and How to Do It Right.

The Importance of a Midyear Check-In

A midyear check-in allows a financial institution to review, reassess, and realign goals. Economic conditions can change significantly within six months. Revisiting annual goals ensures they are still realistic and aligned with your strategy.

Steps for a Successful Midyear Check-In

1. Re-Evaluate Goals

  • Review Performance Metrics: Look at key performance indicators (KPIs) such as loan growth, deposit levels, and profitability. Compare these against the goals set at the beginning of the year.
  • Adjust Targets if Necessary: If the economic environment has changed, such as a slower-than-expected reduction in interest rates by the Fed, adjust the targets accordingly. For instance, slower interest rate cuts might affect lending rates and, subsequently, loan growth targets.

2. Double Check Assumptions

  • Economic Assumptions: Verify the assumptions made at the start of the year. Has the economic forecast changed? Are inflation rates, unemployment, and GDP growth in line with expectations?
  • Market Conditions: Assess the competitive landscape. Have there been significant changes in your market? Are there new competitors, or have existing ones changed their strategies?

3. Loan Portfolio Health

  • Monitor changing borrower performance: Review your borrower’s 2023 financial statements and see how they are impacted by the current environment. Are there challenges that you can get in front of?

4. Customer and Employee Feedback

  • Customer Satisfaction: Conduct surveys or focus groups to gauge customer satisfaction. Understanding customer needs and experiences can highlight areas for improvement or new opportunities.
  • Employee Insights: Employees are on the front lines and can provide valuable insights into operational efficiencies and customer interactions. Regular feedback from staff can inform better decision-making.

5. Strategic Planning for the Second Half

  • Set New Initiatives: Based on the findings, set new initiatives or adjust existing ones. Ensure that these initiatives are actionable and aligned with the bank’s revised goals.
  • Resource Allocation: Reallocate resources as necessary to support the new or adjusted initiatives.

Conclusion

A midyear check-in is more than just a review; it’s a strategic exercise that can significantly impact your financial institution’s success. By reassessing goals, double-checking assumptions, reviewing loan portfolio health, and gathering feedback, financial institutions can navigate the remainder of the year more effectively. This proactive approach not only helps in achieving annual targets but also strengthens the financial institution’s position in an ever-evolving market. Reach out if you have any questions and learn more about Enlighten Financial here.

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“The staff at Enlighten have been available for questions, in addition to the engaged work that they do. They've been very helpful as a resource beyond the major audit.”
— Meghann Kasper, Chief Credit Officer, Bank First
“Enlighten gives us a very good second set of eyes on our transactions. They're not afraid to challenge us on some of the work that we've done, which is what is needed. I don't need to pay somebody to tell me I'm good, I need to pay somebody to tell me where I've made mistakes.”
— Robert McPherson, VP of Risk Management, Peoples State Bank
“Enlighten provided industry best practices that weren’t going to show up in an audit report. They would say, ‘Hey, I noticed you do this. This is really unique, you do a really great job of it.’ And then they might add, ‘Some other clients that I have are doing something like this.’”
— Bill Beardsley, President, Michigan Business Connection
“By questioning some of our methodologies, Enlighten has helped us say, ‘Okay, this is where we need to train staff better and focus on so that they understand what they're doing better.”
— Robert McPherson, VP of Risk Management, Peoples State Bank
“The organization of the communication — before, during, and after the reporting process — was certainly better with Enlighten than what I've experienced with a lot of auditors.”
— Bill Beardsley, President, Michigan Business Connection
“The staff at Enlighten have been available for questions, in addition to the engaged work that they do. They've been very helpful as a resource beyond the major audit.”
— Meghann Kasper, Chief Credit Officer, Bank First
“Enlighten gives us a very good second set of eyes on our transactions. They're not afraid to challenge us on some of the work that we've done, which is what is needed. I don't need to pay somebody to tell me I'm good, I need to pay somebody to tell me where I've made mistakes.”
— Robert McPherson, VP of Risk Management, Peoples State Bank
“Enlighten provided industry best practices that weren’t going to show up in an audit report. They would say, ‘Hey, I noticed you do this. This is really unique, you do a really great job of it.’ And then they might add, ‘Some other clients that I have are doing something like this.’”
— Bill Beardsley, President, Michigan Business Connection
“By questioning some of our methodologies, Enlighten has helped us say, ‘Okay, this is where we need to train staff better and focus on so that they understand what they're doing better.”
— Robert McPherson, VP of Risk Management, Peoples State Bank
“The organization of the communication — before, during, and after the reporting process — was certainly better with Enlighten than what I've experienced with a lot of auditors."
— Bill Beardsley, President, Michigan Business Connection