L.T. “Tom” Hall
President & CEO
Resurgent Performance, Inc.
Alpharetta, GA
High Performance in the
“True Local Community Bank”
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• Banks with assets less than $350 million
WHAT IS A
TRUE LOCAL
COMMUNITY
BANK
(“TLC BANK”)?
• Primarily focused on banking needs of local
community
• Often overlooked and underappreciated
• Generally excelling in customer service, but underserving when it comes to technology and meeting
the changes of the new banking atmosphere
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As of September 30th 2015, there are 6,247 FDIC Insured banks.
3,711 or 59% of these banks are True Local Community banks
(<$350 million in assets)
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One in four banks
have failed or been
acquired since 2008
.
* Institute for Local Self-Reliance
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Given this
Statistic, is
there a
Future for
the True
Local
Community
Bank??
•
Due to regulatory demands and economic factors,
a significant amount of TLC banks have
disappeared in recent years.
•
TLC banks will continue to be acquired, at a
decreased rate, by the mid-sized and larger banks.
•
However, the TLC banks overwhelmingly make up
the largest asset size group, making it statistically
and realistically unlikely that this important group will
become extinct.
•
Not to mention, they are a pivotal part of many
communities.
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BUT...
TLC Banks that want to THRIVE, not only
survive, will have to create a culture of
Continuous Change.
MORE ON THIS LATER…
How have the TLC Banks been
performing in the last few years?
How has their
performance
compared to the
mid- and largesized banks?
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RETURN ON EQUITY
$1 billion to $3 billion
$300 million to $1 billion
$50 million to $300 million
(TLC BANKS)
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RETURN ON ASSETS
$1 billion to $3 billion
$300 million to $1 billion
$50 million to $300 million
(TLC BANKS)
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EFFICIENCY RATIO
$50 million to $300 million
(TLC BANKS)
$300 million to $1 billion
$1 billion to $3 billion
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NON INTEREST INCOME / AVERAGE
ASSETS
$1 billion to $3 billion
$300 million to $1 billion
$50 million to $300 million
(TLC BANKS)
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NET INTERST MARGIN
$1 billion to $3 billion
$50 million to $300 million
(TLC BANKS)
$300 million to $1 billion
OTHER INTERSTING
TRENDS IN COMMUNITY
BANKING…
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Banks less than
$1 billion
Banks less than $10
billion, greater than
$1 billion
Banks greater than
$10 Billion
(excluding five largest banks)
Top 5 Largest Banks
* “The State & Fate of Community Banking,” Harvard Kennedy School, 2015
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Banks less than
$1 billion
Banks less than $10
billion, greater than
$1 billion
Banks greater than
$10 Billion
(excluding five largest banks)
Top 5 Largest Banks
* “The State & Fate of Community Banking,” Harvard Kennedy School, 2015
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“Community banks also make up
a disproportionately large share,
46 percent, of the commercial real
estate lending market.”
* “The State & Fate of Community Banking,” Harvard Kennedy School, 2015
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Banks less than
$1 billion
Banks less than $10
billion, greater than
$1 billion
Banks greater than
$10 Billion
(excluding five largest banks)
Top 5 Largest Banks
* “The State & Fate of Community Banking,” Harvard Kennedy School, 2015
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* “The State & Fate of Community Banking,” Harvard Kennedy School, 2015
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* “The State & Fate of Community Banking,” Harvard Kennedy School, 2015
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* “The State & Fate of Community Banking,” Harvard Kennedy School, 2015
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In Other Words…
“Community Banks’ share of U.S. banking
assets has decreased by more than half – from
about 41 percent to 18 percent since 1994.
The five largest banks’ share of U.S. commercial
banking assets has more than doubled – from
roughly 18 percent to 46 percent.”
* “The State & Fate of Community Banking,” Harvard Kennedy School, 2015
PRESCRIPTON
EMBRACE CHANGE
• With the industry changing as rapidly as it is, only those
banks who adapt to a culture of endless change will
prosper.
• Leaders must be the starting point of change and
ensure their staff knows their change improvement
ideas are appreciated (consider anonymous staff
surveys to identify how processes can be improved or
updated)
• Those who fail to embrace the banking revolution, and
change accordingly, will ultimately fail to exist.
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PRESCRIPTON
AIM HIGH
• Seek High Performance in every aspect and area of your
bank.
• Setting incremental goals is surely the most effective way
to attain truly great performance.
• Even if you are looking to be acquired, High Performance
sets your bank up to receive the highest valuation.
• Download High Performance briefings off RPI website to
track performance and set goals
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PRESCRIPTON
HAVE A STRATEGY
• Stay Independent or Be Acquired?
• Both provide the best returns with High Performance.
• But, other strategy tactics differ greatly depending on
the end goal.
• Having a plan and strategy in place is immensely
important.
PRESCRIPTION
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REVIEW OFFERINGS
• Better align bank’s product service offerings with customer demands.
• Branch Traffic is obviously diminishing.
• Often when customers do enter a branch, they are looking for
advice; Become the TRUSTED ADVISOR.
• The modern day banking consumer is looking for information and
advice on how to save for retirement, the best investment options,
when to start saving for their children’s college, etc., etc., etc.
• Advice related community classes, product offerings, and marketing
materials will take community banks far in the new banking
atmosphere.
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PRESCRIPTION
UPDATE TECHNOLOGY
• Consumers (especially millennials) demand online banking,
functional banking apps, money transfer options, remote check
capture, etc.
• To stay in the game community banks must make technology a
priority. And, “big bank” technology is now much more affordable
for smaller banks.
• First step: Invest in an easy-to-use, eye appealing website and
app. Many community bank websites are severely outdated and
hard to navigate, which results in lost business
• Set a timeline and strategy for updating technology
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Final Thoughts…
Always Provide top-notch service
like a True Local Community
Bank…
but THINK like a Big Bank.
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QUESTIONS?
L.T. “Tom” Hall
President & CEO
Resurgent Performance, Inc.
Lthall@ResurgentPerformance.com
770-664-9329