---
title: Plansmith Blog | Bill Smith
---

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# Plansmith Blog

## Bill Smith

### Recent Posts

## [Margin Risk Tolerance: How Much Risk Can Your Financial Institution Afford?](https://blog.plansmith.com/margin-risk-tolerance-how-much-risk-can-your-financial-institution-afford)

 Posted by [Bill Smith](https://blog.plansmith.com/author/bill-smith) on 4/4/25, 9:14 AM

- [Tweet](https://twitter.com/share)

[![margin-risk-tolerance](https://blog.plansmith.com/hubfs/Postcard%203.05.2024.jpg)](https://blog.plansmith.com/margin-risk-tolerance-how-much-risk-can-your-financial-institution-afford)

Risk is inevitable in banking; in fact, it’s what makes banking profitable. The question is, how much risk is acceptable? Recognizing that existing techniques of measurement were sometimes misleading and arbitrary, Plansmith developed a simple calculation called "Margin Risk Tolerance" that defines how much risk each bank can take. Despite the wealth of banking information Plansmith has at hand, we believe risk relates to the individual bank, and cannot be measured to any peer standard or magic number.

Margin risk tolerance calculates the minimum net interest income and net interest margin necessary to maintain continuing operations. Minimum margin consists of two basic components: 1) earnings needed to maintain an acceptable capital ratio and pay dividends, and 2) earnings needed for overhead.

[Read More](https://blog.plansmith.com/margin-risk-tolerance-how-much-risk-can-your-financial-institution-afford)

## [My Budget Is Done, Now What?](https://blog.plansmith.com/my-budget-is-done-now-what)

 Posted by [Bill Smith](https://blog.plansmith.com/author/bill-smith) on 8/17/20, 2:30 PM

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[![budget](https://blog.plansmith.com/hubfs/calculator-385506_1920.jpg)](https://blog.plansmith.com/my-budget-is-done-now-what)

Most of us hate planning. So why would I want to start now, when I could wait until the usual time next year?

Actually, there are two great reasons to plan early and often:

[Read More](https://blog.plansmith.com/my-budget-is-done-now-what)

## [Planning: Crisis and Recovery](https://blog.plansmith.com/planning-crisis-and-recovery)

 Posted by [Bill Smith](https://blog.plansmith.com/author/bill-smith) on 5/13/20, 12:55 PM

- [Tweet](https://twitter.com/share)

[![](https://blog.plansmith.com/hubfs/money-2696229_1920.jpg)](https://blog.plansmith.com/planning-crisis-and-recovery)

Plansmith believes in the power of planning to help manage the future.

Our mission has been to provide the best tools and services to strengthen execution for sustained growth and quality earnings. Over the past 50 years thousands of financial institutions have benefited from the tools we build and the services we offer.

In the current crisis there is no better time to rethink the use of complicated and confusing systems in favor of an easier, more flexible and a more understandable way to avoid the risk of bad decisions. Plansmith provides resources including dedicated people, expert advisors, educational offerings and great decision technology components for managing your future.

[Read More](https://blog.plansmith.com/planning-crisis-and-recovery)

## [Turn Your Budget into Action](https://blog.plansmith.com/turn-your-budget-into-action)

 Posted by [Bill Smith](https://blog.plansmith.com/author/bill-smith) on 1/9/20, 11:05 AM

- [Tweet](https://twitter.com/share)

[![](https://blog.plansmith.com/hubfs/youtuber-2838945_1920.jpg)](https://blog.plansmith.com/turn-your-budget-into-action)

A budget without a Playbook is just numbers on a page.

You know what your targets are but you also need to define how you will get there.  A Playbook defines the actions needed for success, and the people who will manage the process.

But many managers say they just don’t have the time or resources.

Plansmith’s *Playbook* is a simple online platform to help you create clearly defined initiatives, track progress, and reach your targets by creating an action plan for your budget.

[Read More](https://blog.plansmith.com/turn-your-budget-into-action)

## [Why “E-Learning” Is Succeeding](https://blog.plansmith.com/why-e-learning-is-succeeding)

 Posted by [Bill Smith](https://blog.plansmith.com/author/bill-smith) on 7/10/18, 10:12 AM

- [Tweet](https://twitter.com/share)

[![laptop-3087585\_1280](https://blog.plansmith.com/hubfs/laptop-3087585_1280.jpg)](https://blog.plansmith.com/why-e-learning-is-succeeding)

“E-Learning” is rapidly expanding here at Plansmith and client comments have been very positive. Right now there are more than 50 different sessions available and many more sessions are in development.

Why has the “E-Learning” approach been so popular, especially since Plansmith has always provided such a high level of live, personal support and is committed to continuing that?

[Read More](https://blog.plansmith.com/why-e-learning-is-succeeding)

## [How Much Risk Can Your Community Bank Afford?](https://blog.plansmith.com/how-much-risk-can-your-community-bank-afford)

 Posted by [Bill Smith](https://blog.plansmith.com/author/bill-smith) on 4/1/15, 11:30 AM

- [Tweet](https://twitter.com/share)

[![HowMuchRiskYourBankAfford.jpg](https://blog.plansmith.com/hubfs/HowMuchRiskYourBankAfford.jpg)](https://blog.plansmith.com/how-much-risk-can-your-community-bank-afford) 

Risk is inevitable in banking, in fact it’s what makes banking profitable. The question is how much risk is acceptable. Recognizing that existing techniques of measurement were sometimes misleading and arbitrary, Plansmith developed a simple calculation called ‘Margin Risk Tolerance’ that defines how much risk each bank can take. Despite the wealth of banking information Plansmith has at hand, we believe risk relates to the individual community bank, and cannot be measured to any peer standard or magic number.

Margin risk tolerance calculates the minimum net interest income and net interest margin necessary to maintain continuing operations. Minimum margin consists of two basic components: 1) earnings needed to maintain an acceptable capital ratio and pay dividends, and 2) earnings needed for overhead.

[Read More](https://blog.plansmith.com/how-much-risk-can-your-community-bank-afford)

## [Community Bankers, There's Room For Improvement](https://blog.plansmith.com/community-bankers-theres-room-for-improvement)

 Posted by [Bill Smith](https://blog.plansmith.com/author/bill-smith) on 3/2/15, 5:30 PM

- [Tweet](https://twitter.com/share)

[![TheresMoreRoomImprovement.jpg](https://blog.plansmith.com/hubfs/TheresMoreRoomImprovement.jpg)](https://blog.plansmith.com/community-bankers-theres-room-for-improvement) 

Most community bank and credit union boards and executives spend a lot of time looking at past performance data. But many only look at projected data once a year at budget time.

Seems backwards to me. As George Bush (the older one) said, "The past is over". The future is unlimited. We can do nothing to change what has happened, but we can do anything to change the future.

[Read More](https://blog.plansmith.com/community-bankers-theres-room-for-improvement)

## [Is Your Community Bank Ready For Rising Rates?](https://blog.plansmith.com/is-your-community-bank-ready-for-rising-rates)

 Posted by [Bill Smith](https://blog.plansmith.com/author/bill-smith) on 8/22/14, 11:30 PM

- [Tweet](https://twitter.com/share)

[![AreYouReallyReadyForRisingRates.jpg](https://blog.plansmith.com/hubfs/AreYouReallyReadyForRisingRates.jpg)](https://blog.plansmith.com/is-your-community-bank-ready-for-rising-rates)

Lately I’ve talked to a lot of bankers who are actually looking forward to the inevitable rise in market interest rates. They believe that their institution’s net interest margin and profit will increase because that’s what their rate risk analysis is telling them.

[Read More](https://blog.plansmith.com/is-your-community-bank-ready-for-rising-rates)

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