From the President's Desk...
Ready or not, 2024 has arrived. As hard as it may be to believe, the new year is upon us, which to me means that we’re one day closer to the warmth of spring!
2023 was a challenging year in the banking industry, for a variety of reasons. Three extremely large banks failed in the first five months of the year, leading to concerns about the health of financial institutions everywhere. A very small Iowa bank failed late in the year, temporarily rekindling those concerns here in the heartland. The significant and ongoing increases in interest rates have resulted in bank funding costs increasing sharply as competition for deposits intensifies. While loan rates have also gone up, the pace of those increases has not kept up with deposit increases, which reduces bank interest margins and as a result reduces profitability.
WCF Financial Bank is not immune to those challenges, which should persist into the new year. It appears that interest rate reductions from the Federal Reserve are on the horizon, which at some point should reverse these negative trends. Storm clouds, however, related to the performance of the economy also have bankers nervous, wondering if there will be future problems with loan repayments.
It doesn’t take much to keep bank executives like myself awake at night. Despite the occasional insomnia, you can take solace in the fact that WCF, your community bank, remains financially strong with abundant capital and resources to weather any potential looming storm. Our bank is well-capitalized by regulatory standards, which has been the case now for many years. Our loan portfolio’s quality is rock solid, and we continue to see very strong growth in our three markets – and that growth is thanks to the confidence you have placed in our bank, its management, and our top of the line staff.
I remain grateful that you have chosen to do business with us, despite many other alternatives in our local communities, other larger cities, and digitally throughout the nation and the world. Our Board of Directors and staff remain committed to operating a successful bank here in rural Iowa and serving the needs of our communities and citizens.
Happy New Year’s greetings to all of you as we look forward to facing and meeting the challenges of 2024 and beyond – and more importantly, as we continue to provide you with the service and financial products that you need and deserve.