As interest rates have reached their highest mark in decades, banks and credit unions have had to do an about-face regarding their deposit strategies. Just one year ago, deposit growth was a non-conversation. Financial institutions were awash with liquidity and were content to let their deposit accounts earn a very low return without worrying about runoff.

What a difference a year makes.

Financial institutions have certainly felt some shaky ground so far in 2023, resulting in a few high-profile bank failures that, frankly, few of us predicted. But not everyone has struggled the same. In fact, some FIs have had no problem growing their deposits in this financial environment. Which led us at Q2 to ask, “What are they doing differently?”

So we dug into our proprietary Q2 PrecisionLender data to find out. Q2 PrecisionLender is our leading commercial relationship pricing and profitability tool used by more than 150 banks and credit unions from across the United States, ranging in size from small community banks to top 10 U.S. institutions.

The sheer breadth and depth of data in Q2 PrecisionLender helps us paint a pretty accurate picture of what’s happening in the commercial banking industry, and it highlighted some important reasons some FIs are succeeding while some are struggling right now. A few key takeaways:

-    Growth doesn’t come from the middle of the portfolio. It comes from the edges.
-    Pricing is not a single metric to be managed or micromanaged. It is a culture.
-    Relationship managers (bankers) tend to be more successful—across the relationship, not just in driving deposits—when they’re empowered to act and equipped with the tools to make informed decisions.

A Tale of Two Banks
From September 2022 to February 2023, Q2 PrecisionLender clients’ deposit portfolios showed that 40% of the FIs saw an increase in balances, approximately 40% saw a decrease in balances, and the remaining FIs saw no change. Using the Pareto Principle (also known as the 80/20 Rule) that specifies that 80% of consequences come from 20% of the causes, we can assert that the top-performing relationship managers at any given institution are driving most of the deposit growth. And by looking at the activity of those top bankers, we can determine several guiding behaviors for building liquidity.

We created an amalgamation of two banks—one that was successful and one that wasn’t—and took a deep dive into the data for each in a blog series on We found some common approaches in the success story, as well as some common pitfalls in the not-so-successful story.

I’ll share those approaches and pitfalls in a live webinar, "Chasing Deposits in a Liquidity Crisis, at 1 p.m. CT June 7, joined by a couple of my Q2 colleagues—Rollie Tillman and Todd Klapprodt. In the battle for liquidity, you need all the weapons you can get. Join us to add some arrows to your quiver.  

Andy Heusel

Written by Andy Heusel

Andy Heusel is an experienced banker having held leadership positions at Hancock Whitney Bank on both the production side as a regional president and the administrative side with various titles. Over his more than 20-year career in the financial services industry, he has led efforts related to M&A, market expansion, strategic planning, and budgeting, and he was responsible for Target Operating Model development for the Wholesale Bank, including transformative initiatives such as LOS and CRM implementation, prospecting efforts, and enhancing the pricing and profitability efforts using Q2 PrecisionLender. His current role at Q2 is on the Advisory Team helping financial institutions strategically implement Q2 PrecisionLender and maximize the results the platform can provide.