While no one can predict the future, with a looming national election and continuing global turmoil, at the very least, 2024 is bound to hold some uncertainty. We asked local business leader Jimmy Stubbs how River Bank is prepping for the year ahead, including a possible economic downturn.
HOW ARE YOU PREPARING FOR A POSSIBLE ECONOMIC DOWNTURN IN 2024?
Our first line of defense is carefully monitoring loans that hit the past due list. This is an early indicator of recessionary struggles for households and businesses. Our second line of defense is reviewing our own expenditures and making sure we spend with caution. If a downturn occurs, then a decrease in revenue or flat revenue will follow. Expense reduction and control of some variable costs and delaying capital expenditure projects will soften the declines in revenue.
WHAT PRECAUTIONS ARE YOU TAKING?
• Reviewing economic data and news at all levels from local to global.
• Having conversations with our existing customer base and getting their input on the economic activity/struggles within their lines of business.
• Monitoring loan activity and deposit trends. Well-run businesses will borrow less and hold more cash before and during economic downturns.
WHAT ADVICE CAN YOU OFFER OTHER LOCAL BUSINESSES TO MINIMIZE RISK AND STAY RESILIENT?
Make sure you understand how your business behaves.
ARE YOUR SALES IMPROVING OR DECLINING?
If your trends indicate a slowdown, then watch your expenses and build up some cash to weather the slowdown.
Jimmy Stubbs, CEO, River Bank & Trust
