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THE
CORNERSTONE
REPORT
Benchmarks & Best Practices
for Mid-Size Banks
FIFTH EDITION
The Cornerstone Report: Benchmarks and
Best Practices for Mid-Size Banks
© 2012 Cornerstone Advisors, Inc.
The Cornerstone Report and its contents are protected by copyright laws, contain the trademark Cornerstone
Advisors, Inc., and are Cornerstone’s confidential and proprietary information. No part of this book shall be
reproduced, stored in a retrieval system, or transmitted by any means, electronic, mechanical, photocopying,
recording or otherwise, without written permission from Cornerstone Advisors. Cornerstone assumes no
liability with respect to the use of the information contained herein which is provided “as is” and there are
no warranties of any kind provided by Cornerstone with respect to this report. Cornerstone assumes no
responsibility for errors or omissions and will not be liable for any damages resulting from the use of the
information contained herein.
For information, contact:
Cornerstone Advisors
7272 E. Indian School Road, Suite 400
Scottsdale, AZ 85251
Tel: 480.423.2030
about cornerstone advisors
Cornerstone Advisors is a management consulting firm committed to helping financial
institutions improve their earnings and performance through the use of benchmarks
and best practices. One of the ways we do this is with educational resources, including
industry reports, white papers, conference presentations, and informational Web sites –
most notably, GonzoBanker (www.gonzobanker.com), our weekly, online newsletter that
is welcomed by more than 12,000 subscribers for its offbeat and often irreverent take on
events in the financial services industry.
This edition of The Cornerstone Report: Benchmarks and Best Practices for Mid-Size
Banks is the fifth in a series of benchmarking studies published by Cornerstone Advisors,
Inc. The cumulative data Cornerstone has collected for these reports make up our
proprietary database of metrics from over 100 mid-size banks. By providing the most
accurate and in-depth benchmarking data and best practice information available in the
industry, The Cornerstone Report can potentially identify millions of dollars of process
improvements and cost savings for mid-size banks.
Among the key features of the report is the Cornerstone Scorecard™, found in the
publication’s Introduction. The Cornerstone Scorecard™ is an invaluable tool that helps
mid-size banks compare their performance in more than 250 key functional areas with
Cornerstone’s proprietary database of peer bank benchmarks. A customized Scorecard, an
indispensable source of information in the preparation of next year’s strategic plan and
operating budget, is something Cornerstone can develop for your bank.
Cornerstone Advisors offers a wide array of consulting services to financial institutions
nationwide. The services below are examples of the many ways in which we help banks
achieve their vision of a competitive and profitable future.
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Strategic Planning and Implementation
Benchmarking
Best Practices and Process Improvement
Technology Planning and Oversight
System Selection
Vendor Management
Contract Negotiation
System Conversion Management
Merger Integration
For a customized Scorecard for your bank, or for more information about any of
Cornerstone’s services, please contact:
Scott Sommer
President and Chief Executive Officer
Cornerstone Advisors, Inc.
7272 E. Indian School Road, Suite 400
Scottsdale, AZ 85251
480.423.2030
ssommer@crnrstone.com
Contents
Introduction: The Best Game of Your Life?........................................................................ 1
The Cornerstone Scorecard™.................................................................................................................................................... 7
Study Methodology.......................................................................................................................................................................18
Chapter 1: Branch Sales and Service..................................................................................... 21
Branch Volumes and Staff Counts........................................................................................................................................21
New Accounts/Platform.............................................................................................................................................................24
Product and Service Penetration...........................................................................................................................................26
Checking Account Growth........................................................................................................................................................27
Teller.....................................................................................................................................................................................................28
Product Management, Sales Management and Regional Staff............................................................................30
Branch Compensation Plans...................................................................................................................................................31
Retail Non-Interest Income.......................................................................................................................................................32
Overall Retail Trends....................................................................................................................................................................33
Branch Sales and Service Best Practices.........................................................................................................................34
Chapter 2: Call Center.................................................................................................................... 35
Overall Call Volumes....................................................................................................................................................................35
Utilization............................................................................................................................................................................................37
Call Center Loan and Deposit Origination.........................................................................................................................38
Call Center Best Practices.........................................................................................................................................................40
Chapter 3: Web and Mobile Banking ..................................................................................... 41
Internet Banking..............................................................................................................................................................................41
Bill Pay.................................................................................................................................................................................................42
Mobile Banking...............................................................................................................................................................................44
Strategic Questions.......................................................................................................................................................................45
Insights / Trends for Web and Mobile Banking .............................................................................................................45
Web and Mobile Banking Best Practices..........................................................................................................................46
Chapter 4: Retail Cards and Payments ................................................................................. 47
Overall Debit Performance........................................................................................................................................................47
Staff Productivity.............................................................................................................................................................................51
Credit Cards......................................................................................................................................................................................52
Retail Cards and Payments Best Practices.......................................................................................................................54
Chapter 5: Consumer Lending................................................................................................... 55
Direct Lending.................................................................................................................................................................................55
Indirect Lending..............................................................................................................................................................................58
Consumer Lending Best Practices........................................................................................................................................60
The Cornerstone Report: Benchmarks and Best Practices for Mid-Size Banks – FIFTH EDITION
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THE CORNERsTONE REPORT: BENCHMARKS AND BEST PRACTICES FOR MID-SIZE BANKS – FIFTH eDITION
Chapter 6: Small Business Banking......................................................................................... 61
Small Business Lending.............................................................................................................................................................62
Organizational Issues...................................................................................................................................................................63
Small Business Banking Best Practices.............................................................................................................................65
Chapter 7: Mortgage Banking.................................................................................................... 67
Mortgage Banking Best Practices.........................................................................................................................................72
Chapter 8: Commercial Banking............................................................................................... 73
Commercial Lending – Overall Trends...............................................................................................................................74
Commercial & Industrial Lending Trends..........................................................................................................................75
Commercial Real Estate Trends.............................................................................................................................................75
Construction Trends.....................................................................................................................................................................76
Summary............................................................................................................................................................................................76
Commercial Banking Best Practices...................................................................................................................................78
Chapter 9: Treasury Management .......................................................................................... 79
Treasury Management and Commercial Lenders........................................................................................................80
Commercial Bill Pay ....................................................................................................................................................................81
Lockbox...............................................................................................................................................................................................82
Sweep Customers.........................................................................................................................................................................84
Positive Pay.......................................................................................................................................................................................84
ACH.......................................................................................................................................................................................................85
Strategic Issues...............................................................................................................................................................................85
Treasury Management Best Practices................................................................................................................................88
Chapter 10: Wealth Management............................................................................................ 89
Trust .....................................................................................................................................................................................................91
Insurance ..........................................................................................................................................................................................96
Private Banking...............................................................................................................................................................................96
Wealth Management Best Practices...................................................................................................................................98
Chapter 11: Deposit Operations and Item Processing.................................................... 99
Deposit Operations.......................................................................................................................................................................99
Wire Transfers and E-Statements....................................................................................................................................... 101
Item Processing........................................................................................................................................................................... 102
Deposit Operations and Item Processing Best Practices....................................................................................... 104
table of contents
Chapter 12: Loan Operations and Collections................................................................. 107
Loan Operations.......................................................................................................................................................................... 107
Collections...................................................................................................................................................................................... 112
Loan Operations and Collections Best Practices....................................................................................................... 114
Chapter 13: Information Technology................................................................................... 115
Technology Spending.............................................................................................................................................................. 115
Technology Deployment......................................................................................................................................................... 119
Technology Infrastructure and Deployment................................................................................................................. 122
Technology Staffing................................................................................................................................................................... 124
Information Technology Best Practices........................................................................................................................... 127
Chapter 14: Risk Management and Credit Administration......................................... 129
Risk Management – Staffing................................................................................................................................................. 129
Risk Management – Losses................................................................................................................................................... 131
Credit Administration................................................................................................................................................................. 132
Risk Management and Credit Administration Best Practices............................................................................... 134
Chapter 15: Accounting and Finance................................................................................... 135
Administration............................................................................................................................................................................... 135
Accounting and Finance Staffing........................................................................................................................................ 137
Other Non-interest Expenses................................................................................................................................................ 139
Accounting and Finance Best Practices......................................................................................................................... 140
Chapter 16: Marketing................................................................................................................ 143
Traditional Measures................................................................................................................................................................. 143
Major Spending Categories................................................................................................................................................... 144
Marketing Best Practices........................................................................................................................................................ 146
Chapter 17: Human Resources and Training................................................................... 147
Training............................................................................................................................................................................................ 149
Human Resources and Training Strategic Issues...................................................................................................... 150
Human Resources and Training Best Practices......................................................................................................... 151
Conclusion.................................................................................................................................... 153
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The Cornerstone Performance Report:
Benchmarks and Best Practices for Mid-Size Banks
A wealth of valuable peer data and performance improvement information not available elsewhere!
Designed to assist mid-size banks in their
efficiency improvement and strategic planning initiatives.
More than 300 detailed productivity and staffing benchmarks
across 17 key areas from 61 banks with assets of $1-$40 billion.
• Branch Sales & Service
• Call Center
• Web & Mobile Banking
• Retail Cards & Payments
• Consumer Lending
• Small Business Banking
• Mortgage Lending
• Commercial Banking
• Treasury Management
• Wealth Management
• Deposit Operations & Item Processing
• Loan Operations & Collections
• Information Technology
• Enterprise Risk Management
• Administration, Finance & Accounting
The Cornerstone Performance Report
can help banks answer these and
many other critical questions:
 How many employees should we
have in this function?
 What type of performance
benchmarks should we use to
measure success?
 What successes – and challenges –
are banks facing with alternative
delivery channels like Internet
banking, call center and ATM?
 What percentage of banks has
deployed a particular new
technology?
 How much are peer banks spending
on training?
 Where are they concentrating their
investment?
 What are peer banks outsourcing
and how much are they spending?
• Human Resources & Training
• Marketing
Learn more at www.crnrstone.com/publications/cornerstone-report-for-banks.php