Measuring Opportunity and Success
Best Banking Practices - Looking from the Inside Out
©2013 Fiserv, Inc. or its affiliates
www.raddon.com / 800.827.3500
The Key Questions
• What is our strategic plan?
• What is our potential?
• Existing Retail & Commercial
• How successful have we been reaching
that potential?
• Customer Development
• Employee Accountability/Recognition
• Are our customers willing to give us their
future business?
• What is our market potential?
©2013 Fiserv, Inc. or its affiliates
www.raddon.com / 800.827.3500
Key Financial Ratios
Asset Median National Median
ROA
ROE
Capital to Assets
Efficiency Ratio
0.80%
7.37%
10.32%
70.76%
0.76%
6.95%
10.54%
72.58%
Earning Asset Yield
Average Loan Yield
Total Loan Growth
Loan to Assets
Net Chargeoffs
Total Delinquencies
4.18%
5.44%
-3.14%
61.54%
0.06%
0.87%
4.15%
5.55%
-3.77%
59.51%
0.04%
0.92%
Cost of Funds
Core Deposit Growth
0.58%
7.57%
0.56%
7.76%
Net Interest Margin
Noninterest Income to
Assets
3.55%
3.54%
0.62%
0.54%
©2013 Fiserv, Inc. or its affiliates
In order to market
effectively, we must
understand the key
financial issues, and how
they create the framework
of our strategic plan
www.raddon.com / 800.827.3500
Measuring Potential Through Segmentation
Consumer Segments: Combining Age And Income
Household Income
18 to 34
35 to 44
Head of Household Age
45 to 54
55 to 64
65+
Upscale
14%
$125,000
or More
Credit Driven
15%
Middle Market
21%
$50,000 to
$124,999
Under
$50,000
Middle Income Depositor
22%
Fee Driven
11%
Low Income Depositor
18%
NB&T
Customer Relationship Group
Segmentation backed by national research allows you to Group
quantifyPeer
the opportunity
Region
National
Consumer
Segment Definitions¹
Key Issue
Consumer
Segment
2013
Average
for products,
services,
and balances,
as well
as estimate
channelGroup
usageAverage Average²
Age 18-44; Income <$50K
Age 18-34; Income $50K or More
Age 35-54; Income $50K to $124.9K
Age 45 and Over; Income <$50K
Fee Generation
Loan Generation
Loan Generation
Deposit Generation
Age 55 and Over; Inc. $50K to $124.9K Loan, Deposit & Invst.
©2013
Fiserv,
Inc. orLoan,
its affiliates
Age 35 and Over;
Income
$125K+
Deposit & Invst.
Fee Driven
Credit Driven
Middle Market
Low Income Depositor
Middle Income Depositor
Upscale
11%
15%
21%
18%
22%
14%
8%
6%
16%
30%
25%
14%
9%
9%
19%
6%
7%
9%
16%
18%
16%
29%
28%
32%
26%
27%
13%
www.raddon.com
14%
12% / 800.827.3500
12%
Product Potential in Segments
Product
And Delivery
Anywhere
(Indices)
Product
And Delivery
UsageUsage
Anywhere
(Indices)
Product Usage
Product Usage
NB&T
Loan Products
Loan Products
Auto/Truck Loan
Auto/Truck Loan
34%
Mortgage Loan
Mortgage Loan
47%
Home EquityHome
Loan Equity Loan
10%
Home EquityHome
Line Equity Line
11%
Overall Credit
Card Credit Card
58%
Overall
VISA®/MasterCard®
54%
VISA®/MasterCard®
Rewards VISA®/MasterCard®
32%
Rewards VISA®/MasterCard®
Personal Line
of Credit
10%
Personal
Line of Credit
Other Loan Other Loan
12%
Deposit Products
Deposit Products
Savings
77%
Savings
Checking Checking
98%
Money Market
31%
Money Market
CD
36%
CD
IRA
43%
IRA
Investment Investment
Products Products
Mutual FundMutual Fund
18.1%
Annuity
-Annuity
Stocks/Bonds
23.3%
Stocks/Bonds
Retirement Retirement
InvestmentsInvestments 42.0%
Traditional Delivery²
Traditional Delivery²
Branch Teller
Transaction
Branch
Teller Transaction 78%
Telephone--Employee
41%
Telephone--Employee
Electronic Delivery²
Electronic Delivery²
Direct Deposit
78%
Direct Deposit
AVR
16%
AVR
ATM
71%
ATM
Direct DebitDirect Debit
52%
Overall Debit
Card Debit Card
68%
Overall
Debit/CheckDebit/Check
Card
66%
Card
Rewards Debit/Check
Card
Rewards Debit/Check
Card12%
Prepaid Debit
Card Debit Card
7%
Prepaid
Online Banking
64%
Online Banking
Mobile Banking
25%
Mobile Banking
Online Bill Payment
Service
Online Bill
Payment Service 33%
Online Acct.Online
Statements
50%
Acct. Statements
Consumer Segments¹
Consumer Segments¹
Credit
Middle
Middle
Low Inc. Low
Mid.Inc.
Inc. Mid. Inc.
Driven
Market Depositor Depositor
Market Depositor
Upscale
Fee
NB&T
Driven
Fee
Credit
Driven
Driven
34%
79
47%
54
0
10%
14
11%
77
58%
74
54%
47
32%
28
10%
107
12%
79
141
54
134
74
0
100
14
122
77
121
74
168
47
109
28
167
107
141
145
134
144
146
74
110
100
104
122
108
121
115
168
77
109
116
167
145
64
144
62
53
146
50
110
73
104
73
108
41
115
117
77
56
116
64
61
62
78
124
53
100
50
107
73
107
73
88
41
76
117
67
56
61
150
78
146
148
124
224
100
136
107
138
107
162
88
190
76
133
67
150
146
148
224
136
138
162
190
133
96
77%
102
98%
28
31%
30
36%
35
43%
122
96
101
102
72
28
73
30
112
35
113
122
101
101
100
72
91
73
100
112
82
113
99
101
73
100
84
91
90
100
98
82
100
99
132
73
135
84
105
90
102
98
102
100
156
132
137
135
142
105
102
102
156
137
142
16
18.1%
---26
23.3%
25
42.0%
107
16
---117
26
131
25
91
107
---81
117
104
131
61
91
---50
81
65
104
127
61
---125
50
117
65
199
127
---222
125
170
117
199
-222
170
111
78%
102
41%
109
111
75
102
104
109
91
75
93
104
105
91
99
93
115
105
100
99
108
115
100
108
85
78%
103
16%
117
71%
82
52%
137
68%
140
66%
61
12%
64
7%
129
64%
188
25%
86
33%
149
50%
113
85
106
103
121
117
114
82
124
137
124
140
193
61
131
64
137
129
229
188
149
86
153
149
107
113
108
106
108
121
112
114
112
124
113
124
110
193
113
131
112
137
117
229
121
149
105
153
95
107
101
108
88
108
87
112
99
112
101
113
30
110
113
113
64
112
33
117
60
121
66
105
99
95
99
101
84
88
87
87
73
99
72
101
76
30
92
113
84
64
17
33
78
60
68
66
102
99
86
99
110
84
121
87
92
73
89
72
121
76
111
92
115
84
104
17
132
78
109
68
102
86
110
121
92
89
121
111
115
104
132
109
Upscale
¹Index > 120 = A bo ve
A verage;
<80
B elo wIndex
A verage
²Delivery channel data
is available
nly foisr Custo
meroRelatio
nship Survey
participants.
¹Index
> 120 =Index
A bo ve
A=
verage;
<80 = B elo w A verage
²Delivery
channelodata
available
nly fo r Custo
mer Relatio
nship Survey participants.
©2013 Fiserv, Inc. or its affiliates
www.raddon.com / 800.827.3500
Small Business Segment Account Balances 1
Annual
Sales Size
Type of Business (NAICS Code)
Less Than
$100K
Entrepreneurs
$100K $499.9K
Micro-Firms
$500K to
$1.99M
Small Business
$2M and Above
Emerging Middle
Market
1Combined
Retail/Wholesale Trade Firms
Avg. Checking Bal.
$5,926
Avg. Dep. Bal.
$26,347
Avg. Loan Bal. - 32% with Loan
$34,418
Service-Related Firms
Avg. Checking Bal.
$8,078
Avg. Dep. Bal.
$27,117
Avg. Loan Bal. - 30% with Loan
$54,596
Other Business Firms
Avg. Checking Bal.
$9,923
Avg. Dep. Bal.
$36,675
Avg. Loan Bal. - 31% with Loan
$43,500
Entrepreneur
Trade Firms
Entrepreneur
Service Firms
Other
Entrepreneur Firms
Avg. Checking Bal.
$15,277
Avg. Dep. Bal.
$46,810
Avg. Loan Bal. - 53% with Loan
$48,086
Avg. Checking Bal.
$21,050
Avg. Dep. Bal.
$109,628
Avg. Loan Bal. - 38% with Loan
$95,887
Avg. Checking Bal.
$19,331
Avg. Dep. Bal.
$55,840
Avg. Loan Bal. - 52% with Loan
$89,956
MicroTrade Firms
MicroService Firms
Other
Micro-Firms
Avg. Checking Bal.
$31,542
Avg. Dep. Bal.
$138,959
Avg. Loan Bal. - 62% with Loan
$94,308
Avg. Checking Bal.
$35,481
Avg. Dep. Bal.
$208,067
Avg. Loan Bal. - 58% with Loan
$148,078
Avg. Checking Bal.
$42,574
Avg. Dep. Bal.
$232,779
Avg. Loan Bal. - 72% with Loan
$329,966
Small Business
Trade Firms
Small Business
Service Firms
Other
Small Business Firms
Avg. Checking Bal.
$56,161
Avg. Dep. Bal.
$363,134
Avg. Loan Bal. - 72% with Loan
$275,978
Avg. Checking Bal.
$64,098
Avg. Dep. Bal.
$524,772
Avg. Loan Bal. - 67% with Loan
$359,975
Avg. Checking Bal.
$61,695
Avg. Dep. Bal.
$493,878
Avg. Loan Bal. - 76% with Loan
$429,233
Emerging Middle
MarketTrade Firms
Emerging Middle
Market Service Firms
Other Emerging
Middle Market Firms
SBNR database from fall 2011, spring 2012 and fall 2012
©2013 Fiserv, Inc. or its affiliates
www.raddon.com / 800.827.3500
Business Product and Service Use by Segments 1
SBNR Small Business Segmentation Model
Bus. Product
- Service Use
Deposit Products
Free Bus. Checking
Business Checking
Bus. Debit Card
Database
Entrepreneurs
Wtd.
Less Than $100K
Total
Trade Svc.
Other
52%
37%
38%
25%
Business Savings
Money Market Acct.
CD
Loan Products
Bus. Credit Card
LOC-With Balance
LOC-With Zero Bal.
Vehicle Loan-Lease
Equip. Loan/Lease
14%
SBA Loan
Term Loan
Comm'l. RE Fin.
Construction Fin.
Business Services
Merchant Crd. Svcs.
Direct Deposit
9%
8%
7%
4%
38%
32%
23%
Cash & Coin
29%
23%
Payroll Services
ACH-Wire Transfer
Remote Capture
Courier Svcs.
Cash Mgt. Services
Broker-Ins. Svcs.
Bus. Invest. Sweep
24%
20%
18%
17%
11%
10%
7%
5%
12%
13%
6%
4%
3%
Base
1Combined
24%
48%
49%
22%
37%
28%
15%
18%
14%
8%
5%
65%
23%
17%
15%
42%
12%
4%
4%
4%
2%
1%
2%
3,637
55%
--44%
---
191
57%
Micro-Firms
$100K - $499.9K
Trade
Svc.
Other
41%
56%
35%
37%
56%
35%
40%
18%
17%
22%
25%
8%
5%
6%
8%
14%
13%
16%
12%
37%
10%
8%
5%
2%
2%
2%
2%
1%
42%
14%
8%
8%
4%
2%
3%
2%
71%
23%
64%
20%
20%
21%
6%
10%
22%
22%
16%
12%
7%
4%
4%
1%
535
4%
1%
4%
1%
147
4%
24%
6%
12%
12%
9%
7%
6%
4%
4%
1%
60%
22%
39%
14%
12%
14%
19%
7%
5%
4%
187
51%
43%
33%
47%
31%
28%
12%
14%
22%
12%
66%
23%
14%
17%
77%
35%
79%
28%
25%
18%
13%
14%
8%
7%
8%
5%
11%
7%
6%
3%
11%
8%
38%
30%
30%
70%
27%
32%
25%
28%
19%
23%
16%
48%
35%
35%
17%
14%
11%
7%
5%
4%
4%
1%
21%
18%
12%
6%
7%
4%
518
51%
39%
37%
Small Business Firms
$500K - $1.99M
Trade
Svc.
Other
9%
18%
19%
18%
12%
9%
6%
15%
19%
9%
10%
4%
218
139
49%
Emerging Middle Mkt.
$2M and Above
Trade
Svc.
Other
55%
39%
48%
48%
39%
50%
51%
28%
32%
47%
58%
35%
39%
30%
37%
42%
45%
26%
20%
23%
20%
38%
28%
38%
26%
40%
34%
70%
88%
47%
88%
39%
36%
23%
30%
13%
88%
45%
37%
39%
48%
26%
34%
14%
11%
4%
30%
30%
36%
38%
30%
29%
8%
6%
46%
47%
31%
29%
31%
39%
27%
26%
23%
18%
16%
10%
508
33%
31%
16%
23%
31%
21%
12%
13%
306
21%
31%
28%
16%
15%
15%
27%
20%
20%
11%
28%
17%
57%
61%
37%
54%
42%
30%
29%
26%
30%
19%
447
45%
59%
46%
53%
35%
6%
59%
47%
55%
43%
33%
23%
40%
30%
18%
16%
127
16%
43%
34%
29%
26%
314
SBNR database from fall 2011, spring 2012 and fall 2012
©2013 Fiserv, Inc. or its affiliates
www.raddon.com / 800.827.3500
Depth of Relationship – Retail HH’s
Realizing Potential
Total Retail HHs
Revenue /HH - Retail
Services Per Household – Retail
HHs (Services w/balance)
Expense/HH - Retail
Do we still have
opportunity for organic
growth?
Increase A HHs
Services Per Household – Retail
HHs (All Services)
Re-engage E HHs
Sales Activity
Sales Activity Excluding CD’s
Checking Penetration
Loan Penetration
Avg Loan Balance- Retail
Avg Deposit Balance - Retail
Share of Wallet – Loans (No 1st
Mtges)
Share of Wallet - Deposits
©2013 Fiserv, Inc. or its affiliates
www.raddon.com / 800.827.3500
Depth of Relationship – Commercial HH’s
Realizing Potential
Total Commercial HHs
Services Per Household –
Commercial HHs
Commercial Loan Penetration
Average Loan Balance –
Commercial HH’s
Non Performing Loan Ratio
Retail Loan Penetration –
Commercial HHs
Retail Deposit Penetration –
Commercial HHs
Avg Retail Loan Balance –
Commercial HHs
Avg Retail Deposit Balance –
Commercial HHs
Do we still have
opportunity for organic
growth?
Commercial Checking Penetration
Avg Commercial Deposit Balance
Revenue /HH – Business HHs
Expense/HH – Business HHs
Increase A HHs
Re-engage E HHs
©2013 Fiserv, Inc. or its affiliates
www.raddon.com / 800.827.3500
Create Accountability and Recognize Success
A culture of recognition creates higher
levels of customer satisfaction and
higher cross sales
Banks that provided bonus incentives
to their commercial lenders for loan
growth achieved higher levels of
profitable, commercial loan growth.
(Incentives also factored credit quality
and document exceptions)
©2013 Fiserv, Inc. or its affiliates
www.raddon.com / 800.827.3500
Measure Customer Sentiment
• Loyalty
• Primary Financial Institution
• Overall Satisfaction
• Willingness to give us their future business
• Barriers to future business
• Willingness to refer us to their friends and family
• Engagement – Emotional Connection to the bank
• Leads to higher loyalty, higher SOW, and higher
financial performance
• Service Performance
• What attributes are most important to your customers
• How are we performing on different service attributes
©2013 Fiserv, Inc. or its affiliates
www.raddon.com / 800.827.3500
Measure Market Potential
Existing and Proposed
•
•
•
•
•
•
•
•
•
•
©2013 Fiserv, Inc. or its affiliates
Segmentation
Market Size
Market Share
Number of Competitors
HH growth, balance growth
Market Deposits
Deposit Share
Market Loans
Loans Share
Fair Share
• HH’s
• Loans
• Deposits
www.raddon.com / 800.827.3500
Answering the Key Questions
• What is our strategic plan? – Understanding the financials
• What is our potential?
• Existing Retail & Commercial – Through Segmentation
• How successful have we been reaching that potential?
• Customer Development
• Employee Accountability/Recognition
-Measuring through Household Metrics
• Are our customers willing to give us their future business?
-Measuring Customer Loyalty, Engagement, and Service
Performance
• What is our market potential? – Studying the Market
©2013 Fiserv, Inc. or its affiliates
www.raddon.com / 800.827.3500
Thank You
Contact Information
Raddon Financial Group
701 East 22nd Street, Suite 400
Lombard, IL 60148
Kory Kunze
Bank Strategic Advisor
kkunze@raddon.com
Office: 800.827.3500
www.raddon.com
www.theraddonreport.com
©2013 Fiserv, Inc. or its affiliates
www.raddon.com / 800.827.3500