Sticking to the Plan


The importance of seeking steady, consistent growth

By Steve Peotter

Until a few years ago, our community bank never had a formal strategic plan. This changed on the heels of the recession as our board and executive leadership team embraced the new expectations of community banks. We made it a priority to set out a clear path for our bank.

Our strategic plan was approved in December 2012 and has us growing 10 percent annually over 10 years—from $180 million in assets to what we hope will be $500 million in assets after 10 years. This is the goal we’re working toward. Not 5 percent a year, not 15 percent. So far, it’s been very manageable and we’ve hit our targets. Importantly, we’ve been able to do it without taking the kinds of risks that keep bankers up at night.

Some banks grow based strictly on market conditions. They don’t have a target or a number; they just go about their business and see where they end the year. For our organization, we feel very strongly that our strategy of moderate, sustained, steady growth is more appropriate. By growing at a consistent pace, in a managed way, we believe our earnings will be more predictable and we’ll be better positioned to handle any unexpected events that may come our way. In short, moderate, steady growth simply feels right.

Our 10-year plan is broken out into short-, medium- and long-term goals. Our short-term tactics may shift somewhat as markets fluctuate and new products and technologies gain traction. But while our specific actions may vary from year to year, we don’t expect to stray from the long-term goals we’ve set for ourselves.

We monitor our progress continually. We are committed to making sure we’re heading in the direction we want to go, and we don’t hesitate to update our tactics as needed to match our goals and expectations. While the changes so far haven’t been dramatic—nor do we anticipate making big tweaks—a yearly review helps ensure that we continue to share the same vision.

Our plan encompasses a concept we call the “Core Four.” For starters, we hire the best people and retain top-performing personnel. Second, we are committed to credit quality at all levels in the organization—making the right loans to the right people. Third, we seek to grow the bank at a manageable, consistent level by developing and furthering direct relationships with lending and deposit customers. Finally, we seek to be in the top quartile for financial performance of banks of our size.

Some banks focus all of their discussions around the numbers of banking—return on assets, return on equity and net interest margins. We are fortunate to have those strong numbers. It is just that our culture talks about the actions to achieve them, not the numbers themselves. We believe that earnings are a byproduct of hiring the right people and doing the right things in a consistent fashion. You don’t get strong earnings by underpaying people and ignoring risk and attempting to grow exponentially. You attain strong earnings by focusing on consistency and predictability over a manageable period of time.

Most important, our strategic plan is shared throughout the organization. We also talk about the plan with our clients and potential clients. We feel it’s important for them to know who we are and where we are going. We also closely monitor our results, and our leadership is held accountable for meeting our goals.

There are some who might find consistency boring. We see it differently. Predictable strong performance, delivered by market-based tactics in a growing, diverse organization, seems exciting to us. We find it comforting to know that we’re growing our organization in a managed way, so that our plan comes together nicely.

For us, it’s all about finding the right balance. It has worked well these past few years, and we expect it will continue to help us generate strong returns that match our plan and we can be proud of.

Steve Peotter ( is president and CEO of Oregon Community Bank in Oregon, Wis.