Ten Questions to Ask Yourself before Choosing a New Bank

There aren't many good news stories about banks these days so if you're looking for a new bank you may be facing the quagmire of what to look for and who to turn to when searching for a new bank. The answer may rest upon what your personal and or business banking needs are.

For business owners, entrepreneurs and consumers seeking personal guidance, it is important to recognize that your relationship with your bank is extremely important. This is one relationship that requires serious time and examination.

I believe the examination process is twofold. On one side of the equation you'll want to look at the financial stability and business model of the bank to ensure it can provide the financial strength and safety needed to stay in business and serve your needs in a favorable manner to you. On the other side of the equation I'm sure you'll agree that personal recommendations for a banker from your trusted associates may be a great place to begin your search.

Once you've honed in on banks with good reputations for customer service and a broad array of products and services, you'll want to identify your own needs and the necessary resources to conduct your business.

For example, if you are a business owner, what stage of the business cycle are you in? Is your business domestic, international or both? What are your credit, deposit and cash management needs? Then examine if the banks on your short list can handle your needs.

What should you look for when examining the banks?

Once you've identified your needs, you'll want to assess the banks to determine which may be best suited to meet your needs.

• What is the bank's financial condition?
• What are their capital ratios? Are they well capitalized?
• How is the bank's loan portfolio, and are their NPAs affecting their lending capabilities?
• What's the bank's liquidity position (as this could also affect their lending capabilities)?
• Is the Bank covered by FDIC insurance?
• What is the bank's operating profile?
• Is the bank national, regional, or local (as this may impact where the decision-makers are also)?
• Is the bank oriented towards business or consumer customers or both, and is their focus right for your needs?
• What is the experience level of the bankers, which is especially important if you have complex financials.
• Does your bank focus on customer service or is it more focused on transactional types of relationships such as access to ATM machines and online banking?

Giving your banking relationship some thoughtful consideration will also be helpful to you as it relates to the cost associated with the type of accounts you set up with the bank. Having the right banker help you determine the most advantageous accounts for you can save you money also because you don't want to pay for excess fees unnecessarily. In these economic times every dollar saved is a dollar earned and we all can work towards saving a little more.

John Harelson is Vice President & North County Market Manager of Torrey Pines Bank. Mr. Harelson aids business owners in securing working capital, equipment and real estate financing.