Plansmith Blog

If we’re being honest, the annual planning season is rarely met with a standing ovation. For many financial institution leaders, it feels like a chore – a box to check for the regulators or a heavy document destined to collect dust on a shelf.

The problem is that many management teams are still operating under the old rules of planning. These misconceptions keep brilliant leaders buried in "spreadsheet land," where they spend their time managing data instead of managing the organization.

If you want to move from a static plan to a dynamic strategy, it is time to debunk these five common myths.

I'm thrilled to share a recap of last week’s first-ever Plansmith Forum, which was an incredible success!

Attendance & Experience

We welcomed 21 attendees representing a wide range of leadership and management roles from financial institutions across the country. Hosted at the Renaissance Hotel near our corporate offices in Schaumburg, IL, the event delivered two full days of learning, collaboration, networking, and social engagement with the Plansmith team — and, most importantly, with industry peers.

“Can’t stress enough the importance of talking with other Compass users.”

“Wonderful event for new and experienced users!”

AI is transforming the way we work, and, at Plansmith, we're excited to be part of the movement. In August 2025, we proudly launched our latest innovation, RiskGPS AI Assist, available in our BankersGPS model. Since then, we've received thoughtful questions from clients exploring the new feature. One in particular stood out, and we couldn't resist sharing it with you.

Regulatory compliance costs are skyrocketing!

The focus of safety and soundness examinations continues to move towards asset/liability management and ensuring financial institutions are complying with the guidance issued in the last several years.

So why do we keep hearing about “surge” deposits and how important it is to know if you’re holding any? Well, it might be because in the past 10 years, CD balances in FDIC insured institutions have fallen by $880 Billion; yes, that’s Billion with a capital “B.” And while that may be the bad news, the good news is that over the same time period, non-maturity deposits (DDAs, NOWs, Savings, and MMDAs) have grown by $5.9 Trillion (with a capital “T”).

Backtesting can be a painful topic for bankers. In this post, I'll answer the top 5 most common questions I hear about backtesting. I'll reference my first post, Independent Review, Model Validation, and Backtesting, so you might want to revisit it before reading on. In that blog, we looked at the interrelationship of these three items and brought up a few questions on backtesting.

Specifically, we questioned 5 things: who should do it, how often should it be done, what period should be covered, do you need to backtest model results and assumptions, and why even bother if market rates really aren’t changing.

In its Semiannual Risk Perspective, the OCC said strategic risk remains high as banks consider business model changes and face revenue challenges.

Yep, the 90s. It was all the rage and I jumped on board like a millennial on the Grateful Dead Fare Thee Well scene – I’m not sure what it’s all about, but I want to say I was there.
 

“Where is someone that will pay me 1.5X book?; that’s what my Interest Rate Risk model says my bank is worth.” That statement, along with “there is no way this bank could be sold for 1.5X book”, are two comments I’ve heard a few too many times lately from bankers and examiners. While I will let you figure out which group is responsible for each statement, both illustrate a somewhat common misconception that capital values (sometimes called “market value of equity”) from interest rate risk models are meant to reflect actual current and projected institution sales prices.