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Brad Dahlman

Brad Dahlman is the Product Manager for the Relationship Profitability Management (RPM) application. In this role he provides product direction and directly overseas all aspects of product delivery. He often speaks to clients and prospects and those in the financial services community about the importance and uses for Relationship Profitability. The combination of his previous experiences helps him bring "real world" applications into the use of Relationship Profitability. Brad has a broad background in banking and has held various positions in finance, audit, operations and technology with several mid-sized community banks. His most recent banking position was Senior Vice President of Operations and Technology at three community banks in the Minneapolis/St Paul community.

Recent Posts

5 Things You Need to Know About CECL

Posted by Brad Dahlman

Oct 11, 2017 4:00:00 PM

Current Expected Credit Loss (CECL) is far more than just a new Financial Accounting Standards Board (FASB) regulation to achieve regulatory compliance. The active credit management and integration of the potential credit losses to your financial institution (FI) is key to how you should be running your organization in the years to come. Taking a look at some simple tips can help to not only start the planning for CECL, but to then take your model results and implement them in your business. The CECL results you produce can be invaluable for your institution in order to stay competitive in the marketplace and increase the profitability of your organization.

Most financial institutions have some knowledge about the new CECL standards, however, many FIs still have questions about the requirements, what to expect, how to begin preparing, and the difference between various CECL models. Here is what you need to know about CECL...

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Topics: Financial Services Industry

Using Information to Effectively Engage With Clients

Posted by Brad Dahlman

Aug 10, 2016 10:00:00 AM

How often do you go to your favorite restaurant or shop at your favorite store?

I personally visit Costco every week to pick up items for my family of five. This gives Costco 52 opportunities per year to “engage with me” at their store, for roughly 45 minutes each week. Now turning to banking; how many times a year do you engage with your clients?

In a recent FDIC report titled “Brick and Mortar Banking Remains Prevalent in an Increasingly Virtual World” and Brett King’s article “What the FDIC study on bank branches misses and it’s a massive hole”, there is a healthy discussion of this topic – how many times do clients visit your branch? 

While this key stat isn’t available for US banks, I was drawn to one chart from a UK bank. Spare Bank has tracked visits per year and from 1995 to 2016 the results are staggering – branch visits dropped from 24.5 visits per year to 1.3 visits per year. Put simply, clients visit their bank or credit union once or twice a year and their favorite store weekly!

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Topics: Relationship Management, Profitability Management

Net Interest Margin in a Rising Interest Rate Environment

Posted by Brad Dahlman

Sep 16, 2015 9:16:00 AM

 

We all know it will happen, the real question is when?  As the Federal Reserve monitors unemployment inflation and global markets closely, it is widely expected that the federal-funds rate will be increased in the last quarter of 2015.  It has been almost ten years since the Fed raised rates!  The Fed dropped rates from 2006 to 2008 and has held them steady ever since.  An increase in the federal-funds rate would signal a dramatic change and should cause all financial institutions to consider the impact of a rising rate environment on their portfolio.  This will likely cause clients to reassess their products, services, and rates with their existing FI. 

Now is the time to:

  1. Quantify the impact of rising rates on your earnings – thru the use of an Asset Liability Management (ALM) tool or service.
  2. Devise customer facing strategies to protect profitable clients and provide pricing guidance.

Today I’ll focus on the customer facing strategies.

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Topics: Profitability Management

Key Client Identification and Retention

Posted by Brad Dahlman

Aug 28, 2015 4:31:02 PM

Did you know that, according to a recent J. D. Power and Associates study, 8.7% of customers switched their primary bank in the past year? Think about that … 8.7% of your customers left last year, and just to “maintain” your client count you need to attract that many new clients.

Now think about it in a different way. The loss of some of these clients hurts much more financially than the loss of others. As a profitability expert I know that, for most banks, over 180% of their profit comes from the top 20% of their clients. Losing these top clients really puts a dent in the bottom line. Therefore, financial institutions need to focus their retention efforts on their key clients in order to yield the greatest benefits.

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Topics: Profitability Management

How to Fight a Decreasing NIM in Your Financial Institution

Posted by Brad Dahlman

Aug 25, 2015 4:38:49 PM

The economic down turn of 2009 – 2012 is behind us.  We have started to see economic growth and increased loan demand, and charge-offs have returned to normal levels.  These are all positive trends for banks and credit unions.  The next big challenge bankers face is fighting the trend against margin compression.  For the banking industry over the past five years we have seen overall NIM decline by 19bp (3.02% - 2.83% - see Chart 1).

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Topics: Profitability Management

How Many Branches are too Many?

Posted by Brad Dahlman

Aug 25, 2015 4:28:38 PM

 

Most bankers I talk to these days are saying two things…

First, they are thankful to have weathered the financial downturn and feel somewhat optimistic about an economic recovery.  Second, they are all focused on improving profitability as a way to strengthen their balance sheet.

Any accountant can tell you that improving profitability is rooted in either higher revenues, lower costs, or a combination of both.  With weak loan demand and increased regulatory focus on fee income, many financial institutions (FIs) are taking a much harder look at expenses.

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Topics: Profitability Management

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