Independent Banker - May 2019 - 58

COMMUNITY BANK CFO OUTLOOK 2019
Has a strong economy made it more difficult to
attract deposits in order to grow the bank?
20.51%
Challenges have not
deviated from historical
experience due to the
current economy
6.84%
Deposit-taking
has become easier
with the stronger
economy
72.65%
More challenging
than what we would
have experienced in
a weaker economy
risk level and interest-rate risk. " You'll see more of a focus
on managing risk and margin in diff erent scenarios and
maybe less on the day-to-day accounting side, " he says.
" There will always be that need, but I'm seeing a lot of
CFOs really get engaged in overall balance sheet strategies,
funding strategies and using noncore products to manage
the balance sheet. "
Bonvechio knows there will always be new accounting
rules, but for now she thinks her bank's growth, and
shifting lines of business from residential to commercial
lending, will have the biggest impact on her role.
" It goes back to managing and monitoring capital and
the risk, and how the risk profi le can change with diff erent
activities, " she says.
Bonvechio says CFOs have become more responsible and
involved in the oversight of IT, determining how to spend
resources on systems, licenses, software and security,
instead of building branches and buying equipment.
" As we grow, we have to think about how big we want to
be and what does that mean, " she says. " It wasn't that long
ago that we were a $400 million[-asset] bank. "
Thom predicts more reliance on forecasting as CFOs try
to anticipate future challenges.
" There's increased complexity in fi guring out how to
fund growth, maintain capital ratios and keeping net
interest margin in line, " he says. " It takes more creativity
than in the past. "
Kelly Pike is a writer in Virginia.
58 Q ICBA Independent Banker Q May 2019
Funding mix
An expanding array of funding options have
substantially increased the complexity of the
CFO job, say a third of respondents, including
Louise Bonvechio, senior vice president and CFO
at Community National Bank. While committed
to core deposits, her community bank has found
itself relying more on brokered deposits and other
wholesale funding sources. " It's more than just
borrowing overnight from FHLB at end of day or a
ladder of some FHLB advances, " Bonvechio says.
Jennifer Halligan, CFO and vice president at
Bank of Bird-in-Hand, finds herself thinking about
how to position the balance sheet if rates go
down, including buying investments. " We don't
want to buy at the bottom of the market, but we
might be at the top now, " she says. " Maybe the
next few years will be the right time. "
First National Bank used to rely heavily on
wholesale funding and CDs to fund its balance
sheet, peaking at $33 million in FHLB advances
in 2008. Now it relies on core deposit funding,
having just come off of its highest-ever year of
deposit growth. CFO Quentin Leighty attributes
much of this to community bank consolidation.
His bank has also been strategic with its gains.
" It would have been easy to grow the balance
sheet by paying up on all deposit products.
We have worked hard to find clients that need
'utility' accounts where the rate isn't the primary
driver, but more the relationship, " he says of First
National Bank's conservative approach to capital.
Has your bank's funding mix changed
enough over the past 10 years to bring
about new challenges for your role?
51.28%
Changed slightly,
with some noticeable
changes in my job
14.53%
No changes, or any
haven't resulted in
new challenges for
me
34.19%
Changed in a
substantial manner,
resulting in new
challenges in my job
Independent Banker - May 2019

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