Best Banking Practices Looking from the Inside Out The Key Questions What is our strategic plan What is our potential Existing Retail amp Commercial How successful have we been reaching that potential ID: 781694
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Slide1
Measuring Opportunity and Success
Best Banking Practices - Looking from the Inside Out
Slide2The 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?
Slide3Asset Median
National Median
ROA
0.80%
0.76%
ROE
7.37%
6.95%
Capital to Assets
10.32%10.54%Efficiency Ratio70.76%72.58%Earning Asset Yield4.18%4.15%Average Loan Yield5.44%5.55%Total Loan Growth-3.14%-3.77%Loan to Assets61.54%59.51%Net Chargeoffs0.06%0.04%Total Delinquencies0.87%0.92%Cost of Funds0.58%0.56%Core Deposit Growth7.57%7.76%Net Interest Margin3.55%3.54%Noninterest Income to Assets0.62%0.54%
Key Financial Ratios
In order to market effectively, we must understand the key financial issues, and how they create the framework of our strategic plan
Slide4Measuring Potential Through Segmentation
Segmentation backed by national research allows you to quantify the opportunity for products, services, and balances, as well as estimate channel usage
Slide5Product Potential in Segments
Slide6Slide7Slide8Depth of Relationship – Retail HH’s
Realizing Potential
Do we still have opportunity for organic growth?
Total Retail HHs
Services Per Household – Retail HHs (Services
w/balance)
Services Per Household – Retail HHs (All Services)
Sales Activity
Sales Activity Excluding CD’s
Checking PenetrationLoan PenetrationAvg Loan Balance- RetailAvg Deposit Balance - RetailShare of Wallet – Loans (No 1st Mtges)Share of Wallet - DepositsRevenue /HH - RetailExpense/HH - RetailIncrease A HHsRe-engage E HHs
Slide9Depth of Relationship – Commercial HH’s
Realizing Potential
Do we still have opportunity for organic growth?
Total Commercial HHs
Services Per Household – Commercial HHs
Commercial Loan Penetration
Average
Loan Balance –
Commercial HH’s
Non Performing Loan RatioCommercial Checking PenetrationAvg Commercial Deposit BalanceRevenue /HH – Business HHsExpense/HH – Business HHsIncrease A HHsRe-engage E HHsRetail Loan Penetration – Commercial HHsRetail Deposit Penetration –Commercial HHsAvg Retail Loan Balance –Commercial HHsAvg Retail Deposit Balance –Commercial HHs
Slide10Create Accountability and Recognize Success
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)
A culture of recognition creates higher levels of customer satisfaction and higher cross sales
Slide11Measure 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 performanceService PerformanceWhat attributes are most important to your customersHow are we performing on different service attributes
Slide12Measure Market Potential
Existing and Proposed
Segmentation
Market Size
Market Share
Number of Competitors
HH growth, balance growth
Market Deposits
Deposit Share
Market LoansLoans ShareFair ShareHH’sLoansDeposits
Slide13Answering 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 MetricsAre our customers willing to give us their future business? -Measuring Customer Loyalty, Engagement, and Service PerformanceWhat is our market potential? – Studying the Market
Slide14Thank You
Raddon Financial Group
701 East 22nd Street, Suite 400
Lombard, IL 60148
Office: 800.827.3500
www.raddon.com
www.theraddonreport.com
Contact Information
Kory Kunze
Bank Strategic Advisorkkunze@raddon.com