Welcome to 2024! It’s amazing how quickly the first quarter is passing us by.
I wanted to provide some information on how we are doing as a Bank.
It was a different environment for 2023 compared to previous years, and nothing that we have experienced before. The rising rates impacted both the bank’s cost of funds and local economic growth immediately. This slow down led to a 1.5% decrease in our loan portfolio year over year. Even though the loan market was not as strong as previous years we were still able to establish some new, strong, commercial relationships in both the Cedar Valley and Des Moines markets. Another win in 2023 was the continued improvement of the loan portfolio credit quality. We ended the year with only $10.5MM in classified loan balances, a 45% reduction from the start of the year.
Our goal for loan growth in 2024 remains at 5% and with a little help from the Fed we feel this is very obtainable. We have seen a lot of success with joint prospecting calls in 2023 and will continue that plan of attack into 2024. We are currently recruiting for new lenders in the DM market with the intent to keep increasing the visibility, awareness, and profile of FSB in the DM metro.
We ended 2023 with YTD growth of 350 net new checking accounts and 1% overall deposit growth. This was below target levels, but still a positive given the conditions and the decline of deposits at a national level. Obtaining new non-maturity core deposits may continue to be a challenge in 2024 but we are confident we have the processes and employees in place to generate positive results. Additional good news is as rates decrease; our other metrics should come in line. We continue to work on transitioning CDs into other accounts and focusing on outbound calling through the creation of lists. The Mortgage lending department continues to focus on selling loans to secondary market.
WHAT THE FUTURE HOLDS
In 2024, we will continue our partnerships with schools in the area. So far, our employees have met with more than 50 students through the Waterloo Career Center. At the end of 2023, we focused on centralizing our fraud work in the virtual branch (VB) which was renamed to the FSB Contact Center. We also worked to improve service and efficiency with experts in the Contact Center to support our Treasury Management customers moving forward. Additionally, ITM usage is up and Waverly has done well promoting usage.
EMPLOYEE NEWS
Employee turnover remains low and is below industry average. Work has begun on the 2024 training calendar which will include a transition to from BAI to BVS, known as FSB-U, for internal training, a continuation of the Franklin Covey training programs and a focus on excel, outlook and product knowledge trainings.
FUTURE MARKETING
On the marketing front, we hope you are enjoying the Shovel and the ongoing communication. Continuing to provide updates on this platform helps to reduce email clutter and provides the ability to search older articles. Overall, social media is still primarily focused on brand awareness in the DM market and will continue through 2024. The new software Total Expert is still being implemented. It is currently being used within the mortgage loan process, but will be expanded to enhance the onboarding experience for new deposit clients and generate other customer communications.
PREMIER INFORMATION
Overall, Premier continues to grow with new clients! They focused on providing customers with Medicare plan options in late 2023. In 2024, they plan to do more targeted marketing through the use of purchased marketing lists. The recent Schwab conversion was challenging at times, but the team has done very well adjusting to the new platform. There remain some challenges at times, but the team continues to do a good job dealing with the pain points.
