MyState Financial said on Friday that there was "potential for rebalancing [the] tier one and tier two mix to fund growth and drive earnings per share growth."The Tasmanian-based banking and trustee business said its board had reduced its target minimum capital ratio to 12.5 per cent from 13.5 per cent (the ratio at December 2012).An investor presentation lodged with the ASX on Friday did not elaborate on the options for the rebalancing, which could include a share buyback or an increased dividend payout ratio (which is already high at in excess of 80 per cent).MyState also disclosed that it is targeting annualised savings of A$4.5 million a year out of annual operating expenses of $82 million a year. It said it undertook an "external cost benchmarking review" in May and June 2012.Recent savings arise from the closure of five branches and staff cuts of seven per cent.MyState said it would look for more productivity gains once the overhaul of its core banking system was complete.