The Leverage Matrix: Understanding Your Bank’s True Strategic Position

Most community bank CEOs believe they’re in control — until a strategic question lands unexpectedly.

In this episode, Kurt Knutson introduces The Leverage Matrix, a practical framework that helps CEOs understand where real control comes from — and where it quietly erodes.

This episode sets the foundation for the entire series.

What This Episode Covers

• Why leverage isn’t about size, price, or intent
• How preparedness changes the power dynamic
• The difference between operational control and strategic control
• Why clarity — not avoidance — creates optionality

This conversation isn’t about selling your bank.
 It’s about understanding your position before anyone asks the question out loud.

Who This Episode Is For

• Community bank CEOs
• Leaders navigating growth, succession, or unsolicited interest
• CEOs who want to lead from confidence instead of reaction

New Here? Start With the Resource Guide

If you’re new to Community Bank Value™ Playbook, I’ve created a New Listener Resource Guide to help you get oriented.

It includes:

• An overview of the first fifteen foundational episodes
• Links to free resources referenced in the show
• Guidance on how to get the most value from the series

You’ll find it linked here: Guide

Next Episode:
How buyers really evaluate your bank — and why value is rarely what CEOs think it is.

And remember:
The best decisions come from knowing all your options.

Transcript

Most bank CEOs feel strategically prepared
 —until someone knocks on their door.

Mike Tyson had a blunt way of putting it:
 “Everyone has a plan until they get punched in the face.”

And in that moment, something changes.

You realize you’re no longer operating on your timeline.
You’re reacting to someone else’s.

There’s a simple framework that reveals exactly how much leverage your bank actually has.
And most CEOs believe they’re in a stronger position than they truly are.

 If you’re a CEO, CFO, or serve on a bank board, this matters.

Because once you understand where you really sit, you’ll know whether you’re commanding leverage —or quietly accepting a price.

Let me be very clear about something upfront.

This is not about selling your bank.
This is about building optionality.
And commanding leverage—whether you ever pursue a transaction or not.

Everything you’re about to hear makes you a better-run bank.

 I’m Kurt Knutson.

I founded and led a community bank as CEO and chairman.
I’ve navigated the strategic decisions you face every day—raising capital, building a strong shareholder base, developing leadership, and growing a bank customers proudly called their bank.

I’ve been in your seat through every phase of a bank’s lifecycle.
That perspective is what you’ll hear in every episode of the Community Bank Value™ Playbook.

Today, I’m going to walk you through what I call The Leverage Matrix.

And by the end of this episode, you’ll know exactly where your bank sits—and what that means for your future.

Most of you will recognize your position before we’re done.

Picture a simple two-by-two grid.

On one axis is Readiness—how prepared you are to make informed strategic decisions.

On the other axis is Urgency—how soon a liquidity event might be in your future.

Those two forces create four distinct positions.

Rather than walk through this visually, I want you to feel each one.
Because that’s how you’ll recognize where you are.

Let’s start with where most banks actually are.

Not where they think they are.
Where they really are.

I call this position “On the Clock.”

Low readiness.
High urgency.

 And I want to normalize something right now.

If this describes you, you’re not failing.
You’re in good company.

Most teams in this position believe they’re somewhere else—until the knock on the door.

They believe they’re ready.
They believe they have options.
They believe they’ll figure it out when the time comes.

And then the time comes.

And they realize they’re six to twelve months behind where they need to be.

There are two common paths that put a bank “on the clock.”

The first is internal.

Leadership knows there will be a liquidity event someday.
It might be three years out.
Five years.
Or twenty.

It might be an IPO.
It might be a sale.
But it will be needed.

And while it feels like there’s plenty of time, getting into position doesn’t happen quickly.

Preparation cannot start too early.

That’s not a cliché.
It’s the difference between commanding leverage and accepting terms.

The second path is external.

An unsolicited offer.

At first, it feels validating.
Someone sees your value.

And then—almost immediately—you feel it.

The anxiety.

You’re now operating on someone else’s timeline.

They’re asking for information you don’t have organized.

They’re setting expectations you haven’t validated. 

They’re running a process you don’t control.

 And your leverage starts slipping.

That instinct is correct.

But here’s what you need to hear.

 Value can be recovered. But only by pausing, regaining your footing, and rebuilding leverage intentionally.

There’s no shame in being on the clock.

The only mistake is staying there by default.

I knew from the very beginning that our bank was on the clock.

When I founded the bank, I told our shareholders we were building for the long term. Not a quick flip. Something sustainable.

But I also knew we would eventually need a liquidity event.

Then the financial crisis hit.

If our shareholders hadn’t already been prepared for a long-term horizon, it could have been a disaster.

 We had patient capital. But we also had urgency.

So every year, we measured ourselves against one question: Are we moving closer to a position of strategic command?

That mindset shaped everything.

 And that brings us to the position you actually want to be in.

I call it Strategic Command.

 High readiness. Low urgency.

These are banks built to own forever—but positioned to sell tomorrow.

They intend to remain independent. But they preserve optionality.

They have consistent performance. Management depth. Documented processes. Board and shareholder alignment.

They can evaluate any opportunity—and confidently say yes or no based on data, not emotion.

The banks that preserve independence the longest? They’re here.

And the banks that achieve the strongest outcomes when they sell? Same place.

So here’s the real question.

If a buyer called tomorrow, could you run a competitive process with confidence?

If the answer is no—or even “probably not”—you’re not in strategic command.

And that’s okay.

Most banks aren’t.

Knowing where you are is the first step to moving where you want to be.

There’s another position you need to understand.

High readiness. High urgency.

I call this “Readiness Is Relative.”

 A transaction is likely within the next twelve months.

The bank is operationally sound. But something has accelerated the timeline.

Shareholder pressure. Leadership transition. An external opportunity.

There’s no time for major changes. Only polish.

Strong outcomes are still possible—but there’s no margin for error.

One bad quarter. One lost producer. One credit event.

Ready—but exposed.

 And then there’s the most deceptive position of all.

Low readiness. Low urgency.

I call this “No Need for Realization.”

Often family-owned banks sit here.

There’s no pressure. No plans. No forcing function.

But stability creates blind spots.

 Legacy becomes pride. Pride becomes resistance.

And one day, something shifts.

Succession. Regulation. Market conditions.

And suddenly—you’re on the clock.

Without preparation.

If you’re here by choice, that’s fine.

Just make sure it is a choice. Not a default.

So those are the four positions.

Readiness. Urgency.

Every bank sits somewhere on this grid.

There’s no shame in any quadrant.

What matters is whether you know where you are—and whether you’re moving intentionally.

You don’t have to stay where you are.

Banks move all the time.

The question is whether you’re moving with clarity—or reacting under pressure.

Most buyers are counting on you being unprepared.

Strategic positioning isn’t selling.

It’s leadership.

And it creates competitive advantage whether you transact or not.

When we started, I promised to show you how to recognize your position.

What you got was more than a framework.

You got a diagnostic most CEOs have never seen. Permission to be honest without judgment. And the foundation for everything that follows in this series.

The Leverage Matrix shows you where you are.

The work ahead shows you how to move.

And that awareness—by itself—changes everything.

If you’re new to the Community Bank Value™ Playbook, I’ve created a New Listener Resource Guide to help you get oriented.

It includes an overview of the first fifteen foundational episodes, links to free resources, and the best ways to engage with the content.

You’ll find it linked in the show notes.

Season One—all fifteen foundational episodes—is available now.

Remember—

The best decisions come from knowing all your options.