Straight Talk — Advice for tough times

Many of the bankers I talk to tell me lately they are working harder and making less — a recipe for irritableness if ever there was one. .Things changed in a hurry. Only 18 months ago, the economy was strong and banks were reporting record profits. Last month, the FDIC reported that 56 percent of the nation's banks reported lower earnings for the second quarter. In the Upper Midwest, almost 13 percent of banks actually lost money. A larger percentage of banks lost money in Minnesota (16.78 percent); Colorado (16.56 percent); Missouri (15.21 percent) and Illinois (13.91 percent). The situation is really tough in Michigan, where 30 percent of the banks reported losses. .Sometimes when you are a manager, you actually have to manage, and now is one of those times. It is the tough times that test your management ability, not the good times. Here are a few things to keep in mind:.As tough as times may be for you, they may be tougher for someone else. Keep your eye open for bargain-priced assets. Someone else may need to get rid of a branch or equipment that you could put to good use..Now may be the time to resolve that issue involving a long-time under-performing employee. Sometimes banks get "stuck" with someone on staff who clearly isn't pulling his or her weight. Low or negative earnings provide the rationale for letting that person go. People understand layoffs when earnings are down; it is much harder to gracefully lay someone off when earnings are strong..Market the bank based on its strength rather than its growth and earnings. Whether economic times are good or bad, people want to know that their money is in a strong institution more than they care that the institution is growing. Banks can tout their capital, their loss reserves, FDIC insurance, products such as excess deposit insurance or CDARS, and even longevity if you've been around for several decades. .Now is also a good time to do something special for your customers – not something expensive, but something that people will notice. A lobby display depicting the history of the community or an event where bank employees read to preschoolers at the library might be just the thing. Earnings are public information, so while you should assume that everyone in town will know you are not making money you should show them that the current situation hasn't in any way dampened your enthusiasm for the community..Finally, don't give up. Now is not the time to sell your bank. Sometimes when things are slow, an owner can be tempted to sell the franchise and move to a warmer climate. But resist! Times will improve and so will your earnings.