Looking Forward: Leadership Opportunities Through The Covid-19 - PowerPoint PPT Presentation

Looking Forward: Leadership Opportunities Through The Covid-19 Pandemic June 18, 2020

What we will cover: • Customer shift to virtual and remote channels: Are you participating? • Organizational and leadership opportunities • Changes in the credit environment & ALLL • Strategic planning for the evolving environment • Key takeaways

Customer Shift to Remote or Other Channels Key Observations Strategic Implications • • Continued shift to greater Investments in technology and reliance on remote channels Fintech applications to improve PPP loan experience has driven the customer experience and customers to reconsider leverage existing staff relationships • Expand “market presence” • Accelerated reimagining of without adding branches customer facing technology & • Ensure that compliance client acquisition techniques policies, procedures and • Many conversations about processes are effective and closing branches scalable for remote channels

Operations, Finance & Accounting Strategic Implications Key Observations • Updated financial forecasts and • Need for flexibility in the workforce long-range plans. Including and work-flows technology and automation • Management of remote teams investments • Process improvement and • Card/Contactless transactions can reengineering create complex reconciliation flows • Ensure process consistency for • Increased ACH/Wire volumes drive remote workers. upgraded processes, technologies • Updated internal controls and staff • • Operations and compliance Process scalability for branch training operations with fewer branches and/or branch transactions • Appropriate outsourcing • Investment Portfolio management • Processes should reflect emerging is challenging business realities

Organizational and Leadership Opportunities Key Observations Strategic Implications • • The pace of change since Communication with March has been rapid, employees is critical to moving unprecedented through these changes • • Shift in customer reliance to Work being done will be new channels requires evolving to meet new management and employees Customer expectations, new to adapt tech and evolving market conditions • Employees are uncertain about • what’s next at work and at Change will create home opportunities for existing staff • • Maintaining strong Plan for the organization relationships is key changes required to meet the new environment

Organizational and Leadership Opportunities • This crisis is a challenge. It’s also a chance to move your bank forward. Bring your leadership team along on the journey, show your community that you’re there for them, make the business changes your customers need and engage employees in new ways. • Understand that one size doesn’t fit all when it comes to work. • Employee personal needs are your concern as an institution – your community and your customers rely on you to handle them. • With transparent communication, a vision of where you’re headed and a flexible approach, employees will deliver what is needed. • Try to acknowledge your own experiences over the past few months – what has worked well, what has been difficult.

Changes in The Credit Environment Key Questions Strategic Implications • • Plan for managing declining asset Borrowers under stress quality including: Work outs, • Administration of larger portfolio reserve adequacy and TDRs of SBA loans may be challenging • Support for borrowers looking to • Historical assumptions such as restructure loans real estate collateral values and • SBA expertise either in-house or business cash flows have changed as a consultant • Need for more robust stress • Reevaluate, update and testing. For all segments of document new assumptions for portfolio, including C&I loans Stress testing and ALLL • Work with incurred loss and CECL models to preserve reserve adequacy

Strategic Plan Updates • Investments in technology and Fintech applications to improve the customer experience and leverage existing staff • Changes to branch strategies • Employee communication plans • Remote workforce management • Benefits from process improvement, reengineering, and outsourcing • Problem asset management and forecasts • Updated financial forecasts and long-range plans. Including technology and automation investments

Key Takeaways • Operating environment will continue to evolve • Focus on your customers and expenses • Make transparency and regular communication to employees a regular part of Management’s routine • Ensure that processes reflect today’s business reality • Update strategic plan scenarios before the regulators ask for them

Contacts Larry Davis Paul E Fitzgerald Director Vice Chairman CFO Consulting Partners LLC Crown Bank 609.309.9307 x716 fitzpaul71@gmail.com ldavis@cfoconsultingpartners.com 201.874.5517 www.cfoconsultingpartners.com Jill Freeman Eric Segal Senior Consultant Managing Director Employment Practices Group LLC CFO Consulting Partners LLC 917.679.8945 609.309.9307 x702 Jill.freeman@epgstrategy.com esegal@cfoconsultingpartners.com www.epgstrategy.com www.cfoconsultingpartners.com