Infographic: The bank CFO detective — before you forecast, do some digging

It begins with the headline “The bank CFO detective: Before you forecast, do some digging” and the following sentence.

Building an actionable forecast for your community bank requires a mix of historical data and a real-time assessment of the current landscape. Before you start the forecasting process, take the time to fully understand the situation.

The main subsection has a photo of a man looking at his computer, and a series of eight icons with related content surrounding the image.

#1 icon is of a virus particle. “Consider the impact of COVID. Has the pandemic shifted customer interactions? How will your branch network change? What capital is required to adapt?”

#2 icon is of a spreadsheet with a dollar sign. “Fine tune your income statement. Tweak asset yields, deposit costs, non-interest income and non-interest expenses to align with your forecast goals.”

#3 icon is of a bar chart. “Set assumptions. Set numbers or percentages for metrics such as charge-off ratio, risk-weighted assets/total assets, targeted ROA and ROE.”

#4 icon is of a balance sheet. “Look at your balance sheet structure. How do you need to restructure your balance sheet to reach the goals of your forecast? Look for shifting trends and adapt.”

#5 icon is of a sound waves broadcasting. “Confirm financial goals. Build a bottoms-up forecast based on input from branch and market managers. Top-down forecasts often drive unrealistic goals.”

#6 icon is of a dollar sign. “Evaluate large expenses. Do you have any new one-time expenses, any new recurring expenses, or expenses that will roll off the books?”

#7 icon is of a percentage mark. “Contemplate interest rates. Think critically about what rates will do next, and when. Historically low rates will eventually rise–but what is the timeline?”

#8 icon is of a group of people.  “Check in with the board. Revisit the strategic plan and its relevancy now. Set realistic expectations on where you are going from here.”

A black box at the bottom of the infographic reads “Case closed: The investigating you do up front will ensure an accurate, realistic forecast that drives business success.”

Sources:

https://deluxefs.wistia.com/medias/dof3cha4ml

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