Download bankrank performance/ market attractiveness analysis sample

BANKRANK PERFORMANCE/
MARKET ATTRACTIVENESS ANALYSIS
SAMPLE DELIVERABLES
January 2014
Contents
A.
B.
C.
D.
Office Performance Model Summary
1.
Project Background
2.
Model Overview
Office Decision Matrix & Model Results
1.
Office Performance Matrix Overview
2.
Office Performance Matrix
3.
Office Performance Detail
4.
Trade Area Attractiveness Detail
Branch Network Strategic Recommendations
1.
Recommendations
2.
Supporting Analysis: Consolidation & Divesture Candidates
Priority Expansion Market Summary
1.
Macro Market Expansion Opportunity Analysis Results
2.
Sample Priority Expansion Market Profile
APPENDIX: Detailed Model Hierarchies, Data Dictionary, etc.
The final report submitted to BANKRANK clients
typically contains the information listed at left.
This document includes samples of all items, with the
exception of the Appendix. Please note that sample
materials were pulled from various completed projects
and will not all represent the same geographic area.
The BANKRANK Appendix typically includes detail on
the model hierarchies, information on the treatment of
special cases (both in terms of branch and market
data), and a data dictionary containing detail on the
definition, source, and adjustments (if any) of all data
used in the model.
Please contact Mary Beth Sullivan at (202) 337-7872
with any questions.
A. OFFICE PERFORMANCE MODEL SUMMARY
1.
Project Background
2.
Model Overview
Model Overview
Our assessments of market opportunity and office performance were conducted with models that rate each geography and branch relative
to the others under consideration based on a number of weighted variables. The variables and weights used were determined based on
XYZBank’s operating model, business priorities, and available data.
Office Performance
Consumer Deposit Sales
Consumer Loan Sales
Business Deposit Sales
Business Loan Sales
Transaction Volumes
Office Profitability
Trade Area Attractiveness
Consumer Opportunity
Market Size
Projected Market Growth
Median Income
Projected Income Growth
Deposit, Loan, & Investment Balances
Households/Bank & Thrift Branch
Business Opportunity
Number of Businesses
Workforce Population
Businesses/Bank & Thrift Branch
15.0%
15.0%
15.0%
15.0%
10.0%
30.0%
50.0%
5.0%
17.5%
5.0%
2.5%
10.0%
10.0%
50.0%
25.0%
12.5%
12.5%
Office PerformanceTrade Area Attractiveness
Matrix
Note: The variables and weights shown on
this page represent a sample hierarchy only.
CPG will work with your bank to determine the
variables and weights that best reflect your
operating model, business priorities, and
strategic goals.
Detailed model hierarchies can be found in the Appendix.
A-2
Model Overview
The model used for the analyses assigns a score to each trade area or office relative to the others based on its distance from the
mean value for the group on a number of evaluation factors. It then calculates a weighted average of the scores to create a
composite market attractiveness or affiliate/office performance score. To facilitate interpretation, the scores may be translated
into ratings from 5 to 1 or A to F. The resulting composite ratings approximate a normal distribution.
Weighted Attractiveness or
Performance Rating
Lowest
1
2
3
4
5
15%
20%
30%
20%
15%
Highest
In presenting the results of our analysis, we have chosen in some cases to show a ranking of the offices or geographies on
particular attributes. This provides a greater level of detail than the 1 through 5 ratings.
The results of our data-based market and performance analyses are intended to be an input to the management decision-making
process at XYZBank. The output must be viewed in the context of other quantitative and qualitative factors that are not reflected
in the data available for modeling.
A-3
B. OFFICE DECISION MATRIX & MODEL RESULTS
1.
Office Performance Matrix Overview
2.
Office Performance Matrix
3.
Office Performance Detail
4.
Trade Area Attractiveness Detail
Office Performance Matrix Overview
At the office level, office performance was mapped against the attractiveness rating of the surrounding trade area relative to all XYZBank branches to
suggest high-level strategic considerations for the management of the affiliate's office network.
Invest & Protect
High
Drive Better Results
♦ Balance resources to ensure focus on both new
customer acquisition and retention.
♦
Focus on improving rates of new customer acquisition.
♦
Consider relocating branch to higher traffic area within
the sub-market to capture greater market share.
♦
Design and implement marketing programs to drive
more traffic to the office.
♦ Allocate additional sales staff where appropriate to
increase product sales and cross-sell.
♦
Analyze staffing requirements; add sales staff or
improve the productivity of the existing sales force.
♦ Invest in physical branch appearance to update
interior and enhance signage.
♦
Reconfigure physical branches to update interior
and/or improve signage.
Trade Area Attractiveness
♦ Selectively expand capabilities to drive higher market
and wallet share (e.g., open niche product sales
centers).
♦
Identify transferable best practices for application in
lower-performing offices.
♦ Look to high performing offices for best practices.
Maintain & Retain
Target Efficiencies
♦ Focus branch staff on customer retention and superior
service delivery.
♦ Identify opportunities to improve profitability of current
customers.
♦ Continue to operate on a status quo basis.
♦ Challenge local management to reduce office expense loads.
♦ Protect market share, but make limited investment.
♦ Implement low-cost operating structure focused on
transaction cost efficiencies.
♦ Invest in physical branch appearance to update interior
and enhance signage.
♦ Actively monitor market developments to identify
competitive threats.
♦ Analyze staffing requirements and streamline personnel
needs.
♦ Avoid making major investments in new delivery capabilities.
♦ Consider opportunities to consolidate offices or exit market.
Low
High
Office Performance
Low
B-1
XYZBank
Office Performance Matrix
At the office level, office performance was mapped against the attractiveness rating of the surrounding
trade area relative to all XYZBank branches to suggest high-level strategic considerations for the
management of the affiliate's office network.
Invest & Protect
Drive Better Results
Trade Area Attractiveness
High
Low
Low
15-1
15-2
15-5
15-6
15-12
15-13
15-19
15-25
15-40
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
1
2
5
6
12
13
19
25
40
15-10
15-16
15-17
15-18
15-20
15-21
15-22
15-23
15-27
15-28
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Maintain & Retain
15-4
15-7
15-9
Branch 4
Branch 7
Branch 9
High
10
16
17
18
20
21
22
23
27
28
15-29 Branch 29
15-40 Branch 40
Target Efficiencies
15-24 Branch 24
15-26 Branch 26
15-45 Branch 45
Office Performance
Low
Office
15-1
15-2
15-4
15-5
15-6
15-7
15-9
15-10
15-12
15-13
15-16
15-17
15-18
15-19
15-20
15-21
15-22
15-23
15-24
15-25
15-26
15-27
15-28
15-29
15-40
15-44
15-45
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
Branch
1
2
4
5
6
7
9
10
12
13
16
17
18
19
20
21
22
23
24
25
26
27
28
29
40
44
45
Office
Trade Area
Performance Attractiveness
Score
Score
4.07
7.96
7.71
8.12
7.18
4.07
4.54
5.10
5.25
6.94
4.75
3.61
4.32
4.21
2.42
7.41
3.66
5.30
4.24
9.54
2.56
6.93
1.68
9.23
1.27
7.99
3.51
8.16
2.75
5.53
3.56
7.81
2.66
7.52
2.58
5.84
2.66
4.07
3.67
6.09
3.06
4.76
2.27
7.95
3.07
6.92
1.90
7.12
4.22
8.21
2.82
8.10
2.96
4.91
Specialty Offices Not Rated
Retirement facilities
Offices closed during the past 12 months
B-2
XYZBank
Office Performance
Consumer Deposit Sales, YTD Average Monthly
Rating
Office
Branch 1
(1-5, 5=Highest)
1
Noninterest DDA
Accounts Balances
2.8
3,249
Interest DDA
Accounts Balances
0.2
967
Savings
Accounts Balances
CD
Accounts Balances
IRA
Accounts Balances
4.6
464,783
7.6
630,470
0.6
9,746
Branch 2
4
5.0
50,918
1.2
8,984
9.2
609,311
13.4
1,122,527
3.4
119,387
Branch 4
5
7.8
68,148
3.8
93,192
13.8
869,440
42.6
2,725,306
1.4
11,251
Branch 5
3
Branch 6
2
Branch 7
3
Branch 9
3
4.8
Branch 10
1
Branch 12
3
Branch 13
Branch 17
Branch 18
This
of the BANKRANK
report typically
the relative
of 5,014
4.4 section
48,366
1.6
38,646
7.8 provides
340,452detail on
14.2
445,106 performance
0.8
various
offices
by
category.
Categories
and
variables
may
vary
from
bank
to
bank,
5.4
14,704
0.2
1,284
7.0
229,656
22.0
1,939,604
0.8
22,131
depending
upon
operating
models,
business
priorities, 18.4
and strategic
goals. 1.8
6.0
31,659
2.0
17,420
13.4
495,923
334,946
8,678
5,357
1.0
10,827
9.6
285,539
1.2
3,523
0.2
5.0
13,287
1.8
2
2.4
34,593
0.4
1
1.4
4,459
0.0
1
2.0
21,445
0.0
25.8
543,135
5.6
31,405
1.4
294,004
5,253
7.8
367,565
4,103
4.4
335,041
5.8
0
0.8
94,546
1.0
0
1.6
52,489
1.4
90,064
0.8
25,004
0.0
0
16.6
531,549
3.6
61,867
561,765
2.4
21,868
82,563
0.0
0
48,381
0.8
2,004
Branch 44
2
3.2
6,476
0.6
6,993
4.4
296,783
22.0
973,070
1.2
7,981
Branch 45
3
2.0
889
3.4
6,130
5.0
258,830
26.0
823,590
1.0
12,570
Branch 16
1
2.0
5,153
0.0
0
3.6
27,232
2.4
212,138
0.6
10,602
Branch 19
3
2.2
15,947
0.8
1,917
4.0
266,293
39.6
1,751,560
0.6
6,954
Branch 20
2
4.8
10,249
0.2
0
3.8
150,006
31.6
909,414
2.4
8,871
Branch 21
3
4.2
2,798
0.4
149
3.8
160,520
98.4
6,793,869
3.8
110,094
Branch 22
2
2.0
3,871
0.6
5,607
3.0
231,238
32.0
954,226
1.4
22,633
Branch 23
2
2.2
1,063
0.2
1
2.6
113,841
38.6
989,836
3.0
65,795
Branch 24
2
1.4
808
1.4
7,321
5.4
55,179
38.6
1,236,844
3.0
27,326
Branch 25
3
5.0
6,801
0.2
2,867
8.8
391,954
54.8
1,442,571
4.6
36,607
Branch 26
3
2.8
3,794
3.4
4,330
5.8
177,415
25.4
911,028
0.2
695
Branch 27
1
1.8
1,130
0.6
3,090
1.4
110,454
25.6
840,361
0.2
4,041
Branch 28
3
3.6
2,816
0.2
11,900
5.8
485,820
40.2
1,545,670
1.6
31,824
Branch 29
1
1.8
2,424
1.8
1,163
1.0
55,152
13.6
547,061
0.6
12,367
Branch 40
2
4.0
3,558
0.0
0
3.8
246,326
30.2
3,319,875
0.8
2,723
8.8
24,452
1.0
16,496
11.4
297,838
19.3
564,017
4.2
58,821
XYZBank Average
B-3
XYZBank
Office Performance
Business Deposit Sales, YTD Average Monthly
Rating
Office
(1-5, 5=Highest)
DDA
Accounts Balances
Consumer Loan Sales, YTD Average Monthly
Savings
Accounts Balances
189,612
Rating
(1-5, 5=Highest)
1
Direct Loans
Accounts Balances
0.0
0
3
0.6
2
0.0
0.0
Home Equity
Accounts Balances
Branch 1
4
5.8
59,126
1.6
0.0
0
Branch 2
5
11.2
1,187,635
17.6
368,511
Branch 4
5
7.6
172,996
4.2
485,191
5,361
2.2
159,030
0
0.8
Branch 5
5
2.8
347,996
0.8
111,968
2
19,356
0
0.8
53,074
Branch 6
5
3.4
139,952
6.4
215,702
2
0.2
4,000
0.2
1,980
Branch 7
4
3.8
43,218
1.8
278,932
2
0.8
5,000
1.0
42,648
Branch 9
2
2.6
27,958
0.8
830
2
1.0
9,542
1.0
22,732
Branch 10
3
1.8
47,512
0.4
241,720
1
0.0
0
0.0
0
Branch 12
3
2.6
22,466
1.6
124,582
2
0.0
0
0.2
15,000
Branch 13
4
3.8
138,867
1.2
42,621
2
0.6
9,119
0.4
25,520
Branch 17
1
0.6
2,797
0.2
7,042
2
0.0
0
0.2
4,620
Branch 18
2
2.2
52,669
0.0
0
1
0.0
0
0.0
0
Branch 44
2
1.4
28,859
0.2
20
2
0.2
3,300
0.2
22,000
Branch 45
2
1.2
5,628
0.2
10,232
2
0.6
12,265
0.2
0
Branch 16
4
3.4
121,990
0.6
504,361
2
0.2
4,180
0.0
0
Branch 19
3
2.8
65,856
1.0
161,637
1
0.0
0
0.0
0
Branch 20
1
0.6
10,272
0.4
9,855
1
0.0
0
0.0
0
Branch 21
2
1.8
5,903
0.2
131,008
1
0.0
0
0.0
0
Branch 22
2
1.6
34,891
0.6
45,927
1
0.0
0
0.0
0
Branch 23
1
0.6
900
0.0
0
1
0.0
0
0.0
0
Branch 24
2
1.0
2,653
0.2
61,859
2
0.2
3,000
0.0
0
Branch 25
1
1.0
1,028
0.0
0
2
0.4
2,920
0.2
0
Branch 26
2
2.0
3,862
0.2
12,001
2
0.4
3,400
0.6
26,496
Branch 27
1
0.8
2,286
0.0
0
1
0.0
0
0.0
0
Branch 28
2
1.2
15,203
0.8
140,445
2
0.0
0
0.2
6,000
Branch 29
2
1.6
3,437
0.8
27,809
1
0.0
0
0.0
0
Branch 40
5
2.6
80,102
0.8
1,174,215
1
0.0
0
0.0
0
3.1
56,131
0.8
114,690
1.3
16,082
1.6
55,329
XYZBank Average
B-4
XYZBank
Office Performance
Business Loan Sales, YTD Average Monthly
Rating
Office
(1-5, 5=Highest)
Profitability, YTD Annualized
Business Loans
Accounts Bal Comm.
Rating
(1-5, 5=Highest)
Non-Interest Income
$
/ Avg Dep
Direct Non-Int Exp
$
/ Avg Dep
Avg Deposit
Balance
Branch 1
3
0.4
198,000
3
260,414
0.60%
592,047
1.37%
43,126
Branch 2
3
2.2
174,685
5
496,622
0.31%
1,262,806
0.80%
158,712
Branch 4
3
1.6
207,536
4
402,890
0.27%
1,489,202
1.01%
146,825
Branch 5
2
0.2
1,919
3
204,799
0.44%
712,497
1.53%
46,514
Branch 6
2
0.4
663
4
202,959
0.23%
762,229
0.88%
86,751
Branch 7
2
0.6
87,505
3
225,045
0.62%
661,066
1.82%
36,388
Branch 9
2
0.4
21,841
3
293,110
0.53%
721,327
1.30%
55,612
Branch 10
2
0.0
0
2
19,089
0.12%
303,409
1.84%
16,514
Branch 12
2
0.0
0
3
118,688
0.31%
636,516
1.64%
38,813
Branch 13
3
0.6
125,081
3
188,120
0.61%
713,145
2.31%
30,903
Branch 17
2
0.0
0
2
723
0.09%
13,478
1.70%
795
Branch 18
2
0.0
0
1
9,159
0.43%
653,335
30.59%
2,136
Branch 44
2
0.2
141,000
3
81,313
0.44%
519,264
2.80%
18,549
Branch 45
2
0.0
0
3
84,122
0.41%
549,835
2.67%
20,585
Branch 16
2
0.2
29,329
2
41,709
0.34%
546,035
4.45%
12,271
Branch 19
2
0.0
0
3
69,036
0.10%
606,253
0.89%
67,853
Branch 20
2
0.0
0
3
114,073
0.42%
389,366
1.43%
27,248
Branch 21
2
0.2
9,000
3
108,893
0.15%
665,888
0.93%
71,937
Branch 22
2
0.2
1,989
3
58,668
0.33%
449,731
2.53%
17,793
Branch 23
2
0.2
6,166
3
87,184
0.27%
442,281
1.36%
32,497
Branch 24
2
0.2
30,904
2
21,450
0.09%
411,070
1.67%
24,656
Branch 25
2
0.0
0
3
420,260
0.70%
1,554,083
2.59%
60,007
Branch 26
2
0.4
6,597
3
60,469
0.17%
502,948
1.42%
35,307
Branch 27
2
0.0
0
2
61,811
0.40%
425,897
2.75%
15,511
Branch 28
2
0.0
0
3
58,083
0.16%
623,831
1.67%
37,421
Branch 29
2
0.0
0
1
16,043
0.19%
436,303
5.24%
8,321
Branch 40
2
0.0
0
3
190,431
0.20%
1,101,746
1.18%
93,014
1.4
227,456
199,676
0.57%
400,299
1.45%
43,347
XYZBank Average
B-5
XYZBank
Office Performance
Transactions, YTD Average Monthly
Rating
Office
(1-5, 5=Highest)
Teller + ATM
Teller
Transactions/FTE
Branch 1
2
7,173
5,460
Branch 2
4
18,999
10,920
Branch 4
1
8,662
3,987
Branch 5
1
4,453
3,969
Branch 6
3
11,705
8,097
Branch 7
3
11,923
8,247
Branch 9
3
11,001
8,983
Branch 10
1
1,438
2,985
Branch 12
2
6,655
6,966
Branch 13
2
4,728
6,713
Branch 17
1
574
736
Branch 18
1
938
615
Branch 44
1
3,932
3,897
Branch 45
1
4,038
4,407
Branch 16
1
1,734
1,453
Branch 19
1
2,229
3,030
Branch 20
1
3,748
3,085
Branch 21
1
2,938
2,499
Branch 22
1
2,267
1,540
Branch 23
1
1,852
1,814
Branch 24
1
2,097
2,278
Branch 25
2
11,277
5,219
Branch 26
1
1,836
1,767
Branch 27
1
3,552
3,666
Branch 28
1
3,712
3,102
Branch 29
1
1,925
3,904
Branch 40
1
3,203
2,517
13,925
8,642
XYZBank Average
Specialty Offices Not Rated
Retirement facilities
Offices closed during the past 12 months
B-6
XYZBank
Trade Area Attractiveness Detail
Consumer Attractiveness
Rating
Office
Branch 1
Branch 2
Branch 4
Branch 5
Branch 6
Branch 7
Branch 9
Branch 10
Branch 12
Branch 13
Branch 17
Branch 18
Branch 44
Branch 45
Branch 16
Branch 19
Branch 20
Branch 21
Branch 22
Branch 23
Branch 24
Branch 25
Branch 26
Branch 27
Branch 28
Branch 29
Branch 40
XYZBank Average
Current
5 Yr.
(A-F, A=Highest) Households Proj. Growth
D
A
C
B
B
C
C
B
C
B
A
D
A
B
F
B
C
A
C
B
C
A
B
A
A
B
C
Current
Med Inc
5 Yr.
Proj. Growth
Deposits
Balances
Loans
Investments
Households/
Branch
3,726
-0.23%
90,762
2.47%
1,087,292,315
1,995,549,407
2,121,835,856
9,180
0.68%
59,987
1.88%
3,705,839,314
6,926,945,748
7,074,578,619
3,058
0.25%
242,086
1.79%
988,037,316
2,034,459,332
2,423,927,017
This
the BANKRANK
provides detail
on the relative
opportunity of
3,168section of
0.02%
151,128 report typically
1.56%
1,301,341,450
2,299,696,460
2,970,425,601
various trade
areas by category.
Categories
and variables3,521,059,657
may vary from2,997,196,145
bank to bank,
5,258
3.71%
65,866
1.99%
1,477,374,082
2,932
1.46% upon operating
84,140
3.35% business
576,739,296
2,021,698,062
1,235,718,463
depending
models,
priorities,
and strategic
goals.
4,005
0.77%
80,194
2.81%
1,460,480,852
4,425,442,100
3,205,833,203
5,414
2.19%
95,925
2.20%
1,279,545,144
3,095,704,888
2,745,375,826
4,684
1.05%
94,532
3.20%
1,408,708,871
4,136,520,927
3,259,660,215
8,393
0.86%
62,035
1.86%
2,847,740,544
4,624,702,776
5,400,457,031
6,432
1.21%
90,106
2.38%
3,733,300,371
7,302,543,872
7,904,590,493
5,808
2.77%
40,274
4.10%
641,506,917
957,485,521
1,115,556,209
8,040
6.59%
92,475
1.80%
2,017,767,613
6,890,137,500
4,594,855,804
4,479
1.59%
95,852
2.38%
1,277,256,400
4,148,044,291
2,883,889,404
1,957
1.50%
40,084
2.42%
157,201,771
305,058,681
265,300,910
4,307
1.85%
81,112
3.13%
1,959,116,941
4,321,777,541
4,232,669,240
4,115
0.21%
81,227
1.99%
1,926,521,598
5,540,213,327
4,194,399,193
5,119
-0.05%
126,495
2.19%
4,064,756,437
7,323,872,662
9,211,676,713
4,209
3.32%
72,358
2.56%
811,970,941
1,789,061,139
1,600,483,177
4,687
0.89%
93,399
2.89%
1,869,006,816
4,386,457,482
4,163,993,443
2,048
5.19%
75,203
3.26%
269,824,398
736,733,009
580,615,130
4,554
4.02%
60,055
0.59%
1,092,814,545
3,262,594,113
2,198,788,101
5,596
2.14%
83,811
3.30%
1,062,320,749
3,142,134,761
2,271,987,021
9,176
4.87%
79,174
3.96%
2,220,247,813
6,813,885,694
4,701,209,203
9,531
2.14%
76,341
3.24%
3,315,479,563 10,174,044,201
6,726,061,411
7,941
4.95%
60,019
3.15%
1,060,740,165
3,264,715,765
2,038,575,867
4,705
1.41%
74,776
2.26%
889,255,066
1,520,124,210
1,766,440,510
3,177
3.91%
62,050
6.66%
644,381,910 1,313,183,977
1,200,663,453
138
612
278
1,056
438
419
501
451
586
466
585
194
536
640
38
392
412
301
324
426
341
2,277
933
510
733
794
362
824
B-7
XYZBank
Trade Area Attractiveness Detail
Commercial Attractiveness
Rating
Office
Branch 1
Branch 2
Branch 4
Branch 5
Branch 6
Branch 7
Branch 9
Branch 10
Branch 12
Branch 13
Branch 17
Branch 18
Branch 44
Branch 45
Branch 16
Branch 19
Branch 20
Branch 21
Branch 22
Branch 23
Branch 24
Branch 25
Branch 26
Branch 27
Branch 28
Branch 29
Branch 40
XYZBank Average
(A-F, A=Highest)
A
A
D
D
A
D
D
A
C
A
A
A
B
D
A
A
C
A
A
C
D
C
D
B
C
B
A
Total
2,307
1,186
317
238
1,210
198
279
1,280
513
2,147
1,597
4,781
1,061
343
7,562
1,604
735
1,354
1,424
782
345
207
253
1,150
628
920
1,562
505
< $1 mill
1,437
793
223
172
870
108
201
697
348
1,375
1,139
3,033
699
219
4,677
1,132
516
916
803
587
249
156
173
818
454
538
840
328
Number of Businesses
$1-$5 mill $5-$20 mill $20-$50 mill
708
313
80
57
294
70
65
457
140
628
395
1,403
295
96
2,371
412
205
392
524
171
86
44
69
282
145
299
538
131
131
61
13
8
39
14
10
95
22
109
57
262
55
22
400
52
14
41
68
23
9
6
9
39
24
64
132
21
25
12
1
1
6
5
3
18
3
24
6
58
9
4
83
7
0
4
15
1
1
1
2
11
5
13
36
4
$50 mill +
6
7
0
0
1
1
0
13
0
11
0
25
3
2
31
1
0
1
14
0
0
0
0
0
0
6
16
1
Workforce
Population
33,121
24,770
3,014
1,986
13,680
7,501
2,742
22,955
7,081
45,832
18,280
110,995
16,973
6,638
160,398
18,663
6,576
12,673
36,278
7,679
3,261
2,075
3,518
15,494
7,259
18,172
53,152
7,719
Businesses/
Branch
85
79
29
79
101
28
35
107
64
119
145
159
71
49
145
146
74
80
110
71
58
104
42
64
48
92
120
88
B-8
C. BRANCH NETWORK STRATEGIC RECOMMENDATIONS
1.
Recommendations
2.
Supporting Analysis: Consolidation & Divesture Candidates
XYZBank
Branch Network Optimization
Branch Network Strategic Recommendations
Patriots Branch
Expand capabilities and identify transferable best practices for application in lower-performing offices. Location
generates significant investment product sales.
Giants Branch
Expand capabilities and identify transferable best practices for application in lower-performing offices. Office
serves as a funding source.
Eagles Branch
Consolidate in Year 2, after permanent Ravens Branch has been reestablished.
Raiders Branch
Consolidate in Year 1. Lease expires soon; significant Year 1 and recurring benefit.
Vikings Branch
Consider consolidation in Year 1. Small negative benefit in Year 1; significant benefit in Year 2. Location has
parking, access, and traffic issues.
Packers Branch
Hold and consider future relocation. Minimal benefit to divestiture or consolidation.
Jets Branch
Hold and improve performance. Divestiture would be costly, and recent local initiatives may create significant
development nearby.
Steelers Branch
Consider consolidation if Year 1 negative impact can be funded via other activities. Significant recurring benefit
from consolidation.
Redskins Branch
Consider consolidation if Year 1 negative impact can be funded via other activities.
Significant recurring benefit from divestiture; office located on periphery of network and would likely require
significant investment to improve performance.
Cowboys Branch
Cardinals Branch
Texans Branch
Develop and implement aggressive performance improvement plans and aggressively manage expenses.
C-1
XYZBank
Branch Network Optimization
Supporting Analysis: Consolidation & Divesture Candidates
XYZBank should consider consolidating or divesting selected branches. Consolidation candidates should be chosen with two
objectives in mind:
1.
To reduce overall expenses by eliminating the costs of operating unprofitable branches in low opportunity markets, and
2.
To make resources available for re-deployment from low potential markets to areas that represent greater opportunity in
line with the Bank’s strategic direction.
The offices we have identified as consolidation candidates typically share a number of attributes:
♦
Limited market potential in the surrounding trade area, particularly with respect to business presence
♦
Low transaction volumes relative to both internal and external benchmarks
♦
Relatively low volumes of sales across most or all product categories
♦
Low or negative profitability
Offices should be considered for relocation or consolidation on a regular basis to allow for redeployment of resources to high
opportunity areas and optimization of the branch network.
Low-performing offices in markets with less opportunity that are not targeted for consolidation this year should be reassessed after a one-year period to determine if they are adding value to the XYZBank network.
C-2
XYZBank
Branch Network Optimization
Consolidation & Divesture Candidates: Financial Impact Detail
While several of the recently purchased offices are underperforming, the required write-off of intangible assets makes divestiture
untenable this year. Aggressive performance improvement plans should be developed for these offices, and they should be
reassessed in one year to determine if consolidation or divestiture is warranted and feasible.
Type of
Opportunity
2007 Annualized
Net Income
Change in Net Income
Year 1
Recurring
Resulting Net Income
Net Income, Y1 Net Income, Y2
Balance Sheet Impact
Deposits
Loans
Sandy Spring
Consolidation
384,571
441,640
29,643
826,211
414,214
(1,011,593)
(505,797)
Annapolis West
Consolidation
125,338
94,234
151,173
219,572
276,511
(2,625,444)
(1,312,722)
Urbana
Divestiture
(226,276)
15,467
27,557
(210,809)
(198,719)
(5,242,380)
(2,669,263)
Merrifield
Consolidation
(47,152)
(15,415)
134,222
(62,567)
87,070
(2,194,960)
(1,097,480)
Candidate
Eastport
Divestiture
(90,541)
(6,417)
5,673
(96,958)
(84,868)
(4,458,340)
(2,242,795)
Consolidation
241,116
(42,534)
15,920
198,582
257,036
(377,542)
(188,771)
(215,081)
(155,110)
78,204
(370,191)
(136,877)
(7,912,914)
(4,039,006)
(59,513)
(165,416)
166,011
(224,928)
106,498
(828,851)
(414,426)
Branches
Asbury
would be
Millersville
listed
here.
40 West
Divestiture
Consolidation
Lansdowne
Divestiture
(378,296)
(306,072)
233,757
(684,368)
(144,539)
(4,645,320)
(2,347,660)
Potomac
Divestiture
28,973
(286,889)
(136,069)
(257,917)
(107,096)
(11,001,114)
(5,658,678)
Chantilly
Divestiture
(97,920)
(377,675)
(31,084)
(475,595)
(129,004)
(18,438,756)
(9,219,378)
Pasadena
Divestiture
354,286
(1,092,046)
(271,186)
(737,761)
83,100
(16,956,326)
(8,792,717)
C-3
D. PRIORITY EXPANSION MARKET SUMMARY
1.
Macro Market Expansion Opportunity Analysis Results
2.
Sample Macro Market Profile: Westchester County, NY
Note: Available detail on the macro market and its recent
developments and future trends may vary significantly from
one market to the next. These reports depend upon
information provided to the public through planning and
zoning departments, economic development departments,
chambers of commerce, and local newspapers.
Amtrak Corridor
Connecticut, Massachusetts, Rhode Island, New York City Metro Area, Northern New Jersey, Philadelphia Metro Area
Macro Market Expansion Opportunity Analysis
#1: Middlesex, MA
#6: Bergen, NJ
#5: Westchester, NY
#10: Providence, RI
#4: Hartford, CT
#9: New Haven, CT
#8: Montgomery, PA
#7: Fairfield, CT
#2: Suffolk, NY
#3: Nassau, NY
BankRank
Rating
A
B
C
D
F
D-2
Amtrak Corridor
Connecticut, Massachusetts, Rhode Island, New York City Metro Area, Northern New Jersey, Philadelphia Metro Area
Macro Market Expansion Opportunity Analysis
Middlesex,
MA
Suffolk, NY
Nassau, NY
Hartford, CT
Westchester,
NY
432,638
345,439
Five Year Proj. Households
572,738
489,230
424,801
351,289
346,581
337,432
329,421
306,342
335,166
241,245
Median Household Income
$75,071
$83,344
$91,151
$61,810
$78,530
$80,726
$81,101
$75,108
$59,812
$47,172
Consumer Deposit Balances ($MM)
$28,895
$29,575
$30,370
$14,336
$20,439
$22,264
$17,067
$17,757
$13,296
$8,419
Consumer Loan Balances ($MM)
$54,686
$46,181
$42,193
$28,055
$30,108
$32,033
$35,562
$29,547
$28,851
$16,736
Consumer Investment Balances ($MM)
$57,938
$49,835
$53,071
$30,030
$40,313
$48,115
$33,536
$32,087
$24,162
$15,135
73,017
74,583
72,367
44,894
48,738
53,801
52,020
42,940
41,143
28,319
Sales <$5MM
69,762
71,885
69,833
42,883
47,019
51,825
50,127
41,007
39,631
27,198
Sales $5MM+
3,255
2,698
2,534
2,011
1,719
1,976
1,893
1,933
1,512
1,121
938,876
808,257
747,481
601,633
516,510
542,387
529,100
576,807
433,511
356,483
494
443
485
276
370
487
406
376
275
130
$33,189
$36,413
$50,738
$27,306
$37,656
$29,742
$23,727
$20,884
$17,163
$19,696
1,150
1,092
892
1,252
926
687
806
797
1,198
1,854
Total FDIC Deposits ($MM)
Households/ Branch
Businesses/ Branch
299,597
329,398
Providence,
RI
483,725
Area Branches
327,309
Montgomery, New Haven,
PA
CT
568,125
Workplace Population
334,688
Fairfield, CT
Total Households
Number of Businesses
342,713
Bergen, NJ
241,038
148
168
149
163
132
110
128
114
150
218
1,901
1,825
1,541
2,180
1,396
1,114
1,303
1,534
1,576
2,742
Total Branches
--
--
--
16
--
--
8
--
28
--
Total Deposits ($MM)
--
--
--
$1,167
--
--
$160
--
$1,895
--
Total Market Share
--
--
--
4.3%
--
--
0.7%
--
11.0%
--
150
174
167
94
112
77
98
67
67
80
$11,575
$17,480
$18,552
$16,325
$15,534
$8,463
$8,365
$5,989
$7,273
$16,797
34.9%
48.0%
36.6%
59.8%
41.3%
28.5%
35.3%
28.7%
42.4%
85.3%
Workplace Population/ Branch
XYZBank Presence:
Presence:
NewAlliance
Top 2 Competitors:
Total Branches
Total Deposits ($MM)
Total Market Share
D-3
Amtrak Corridor
Connecticut, Massachusetts, Rhode Island, New York City Metro Area, Northern New Jersey, Philadelphia Metro Area
Macro Market #5: Westchester County, NY
CONSUMER RESULTS
BUSINESS RESULTS
Orange
Orange
Orange
Orange
Westchester
Westchester
Westchester
Westchester
Fairfield
Fairfield
Rockland
Rockland
Fairfield
Fairfield
Rockland
Rockland
Bergen
Bergen
Bergen
Bergen
0
0
0
0
0
0
5
5
5
5
5
5
10
10
10
10
10
10
0
0
0
0
0
miles
miles
5
5
5
5
5
10
10
10
10
10
miles
miles
A
B
C
D
F
XYZ Branch
D-4
Amtrak Corridor
Connecticut, Massachusetts, Rhode Island, New York City Metro Area, Northern New Jersey, Philadelphia Metro Area
Macro Market #5: Westchester County, NY
COMPETITIVE ASSESSMENT
Westchester County accounts for approximately 7% of the total deposits in the market analysis area (not including the five boroughs
of New York City and Suffolk County, MA). Market share in the county is fairly concentrated – the top four competitors hold
approximately 60% of all market deposits.
Growth in total deposit balances in the county has been double the rate of growth in total branches during the past three years. This
can be attributed primarily to a large increase in deposit balances between June 30, 2007 and June 30, 2008 by New York Private
Bank & Trust Corporation, the parent company of Emigrant Bank and Emigrant Direct.
The rapid growth in branches has contributed to an increase in competitive density in the market – between 2000 and 2008, the
number of households per branch in Westchester County decreased from 1,098 to 926. This is significantly below the national
average of 1,163, and implies that Westchester may be overbranched.
Rank
Institution
Deposits
($MM)
Deposit
Branch
Share (%) Branches Share (%)
Branch
Parity
Growth, 2005 to 2008
Deposits Branches
1
JPMorgan Chase & Co.
$8,113.9
21.5%
107
28.9%
75
1.9%
10.3%
2
New York Private Bank & Trust Corporation
$7,420.4
19.7%
5
1.4%
1458
2861.3%
150.0%
3
Wells Fargo & Company
$6,373.8
16.9%
34
9.2%
184
54.2%
3.0%
4
Citigroup Inc.
$4,566.1
12.1%
24
6.5%
187
4.8%
9.1%
5
HSBC Holdings plc
$2,299.6
6.1%
26
7.0%
87
9.0%
4.0%
6
Hudson Valley Holding Corp.
$1,154.2
3.1%
17
4.6%
67
-0.6%
13.3%
7
Capital One Financial Corporation
$979.4
2.6%
12
3.2%
80
19.1%
20.0%
8
Toronto-Dominion Bank
$970.2
2.6%
13
3.5%
73
50.7%
116.7%
9
Bank of America Corporation
$937.0
2.5%
23
6.2%
40
-6.2%
4.5%
10
Hudson City Bancorp, Inc.
$843.6
2.2%
10
2.7%
83
25.8%
25.0%
$3,997.3
10.6%
99
26.8%
40
15.7%
47.8%
$37,655.6
100.0%
370
100.0%
100
41.8%
20.5%
All Others
Total
D-5
Amtrak Corridor
Connecticut, Massachusetts, Rhode Island, New York City Metro Area, Northern New Jersey, Philadelphia Metro Area
Macro Market #5: Westchester County, NY
CONSUMER SEGMENT COMPOSITION
The largest demographic segments in Westchester County are the Financial Elite and Young Up & Comers segments. Together, these
represent approximately 39% of the county’s total population. The distribution of households in Westchester County skews older and
more affluent than both the existing XYZBank footprint and the aggregate market analysis area.
Within Westchester County, the segments listed above are also expected to see the greatest increase in terms of number of
households over the next five years. This pattern varies slightly from that seen in both the XYZBank footprint and the aggregate
market analysis area, where the Young Up & Comers, Flourishing Families, Boomer Comfort, and Wealthy Seniors segments are
expected to see the most growth.
Projected growth rates for all segments in Westchester County are significantly lower than those expected for either the footprint or
the aggregate area. As a whole, Westchester County’s household population is expected to increase by 1.13% between 2009 and
2014, compared to projected growth rates of 1.75% and 1.37% for XYZBank’s footprint and the aggregate market analysis area,
respectively.
Number of Households by Segment
Segments
XYZBank
Westchester, Existing
NAL
NY
Footprint
Distribution
XYZBank
Aggregate Westchester, Existing
NAL
Market Area
NY
Footprint
Projected Five Year Growth
XYZBank
Aggregate Westchester, Existing
NAL
Market Area
NY
Footprint
Projected Five Year Growth Rate
XYZBank
Aggregate Westchester, Existing
NAL
Market Area
NY
Footprint
Aggregate
Market Area
Y1
Young Up & Comers
53,874
219,989
1,606,106
15.7%
12.7%
14.2%
Y2
Metro Mainstream
35,493
187,131
1,517,386
10.4%
10.8%
Y3
Fiscal Fledglings
13,303
98,762
511,412
3.9%
5.7%
F1
Flourishing Families
28,783
163,835
969,088
8.4%
9.5%
8.6%
524
5,803
25,800
1.8%
3.5%
2.7%
F2
Boomer Comfort
30,468
203,501
1,311,631
8.9%
11.7%
11.6%
313
4,777
18,295
1.0%
2.3%
1.4%
F3
Mass Middle Class
15,483
152,452
926,313
4.5%
8.8%
8.2%
1
1,621
F4
Working-Class Country
17,553
141,298
894,004
5.1%
8.2%
7.9%
M1
Financial Elite
79,949
152,971
1,035,235
23.3%
8.8%
9.2%
1,402
2,934
15,063
1.8%
1.9%
1.5%
M2
Wealthy Seniors
29,806
168,775
990,020
8.7%
9.7%
8.8%
490
4,140
15,775
1.6%
2.5%
1.6%
M3
Suburban Achievers
17,668
94,456
561,010
5.2%
5.5%
5.0%
279
2,007
9,068
1.6%
2.1%
1.6%
M4
Upscale Empty Nests
12,140
92,509
588,527
3.5%
5.3%
5.2%
126
1,205
5,567
1.0%
1.3%
0.9%
M5
Midscale Matures
8,193
56,273
387,100
2.4%
3.2%
3.4%
(58)
488
3,634
-0.7%
0.9%
0.9%
895
6,145
30,923
13.4%
251
1,862
13,607
0.7%
1.0%
0.9%
4.5%
(148)
3,631
-1.1%
-0.3%
0.7%
(207)
(311)
(382)
1.7%
2.8%
1.9%
7,150
0.0%
1.1%
0.8%
6,411
-1.2%
-0.3%
0.7%
D-6
Amtrak Corridor
Connecticut, Massachusetts, Rhode Island, New York City Metro Area, Northern New Jersey, Philadelphia Metro Area
Macro Market #5: Westchester County, NY
BUSINESS SEGMENT COMPOSITION
Westchester County accounts for just over 3% of the total number of businesses in the aggregate market analysis area. Westchester
County contains a greater percentage of small businesses with annual sales of less than $1 million than both the XYZBank footprint and
the aggregate market analysis area.
Number of Businesses by Sales Size
Annual Sales Size
Less than $500K
$500K to $999K
Distribution
XYZBank
XYZBank
Westchester, Existing
NAL
Aggregate
Westchester, Existing
NAL
Aggregate
NY
Footprint
Market Area
NY
Footprint
Market Area
29,282
132,588
902,132
60.1%
59.8%
59.8%
10,148
45,027
317,379
20.8%
20.3%
21.0%
$1MM to $2.4MM
5,799
26,627
177,089
11.9%
12.0%
11.7%
$2.5MM to $4.9MM
1,790
8,957
57,379
3.7%
4.0%
3.8%
$5MM to $9MM
900
4,746
28,932
1.8%
2.1%
1.9%
$10MM to $19MM
500
2,392
15,332
1.0%
1.1%
1.0%
$20MM to $49MM
247
1,111
7,415
0.5%
0.5%
0.5%
$50MM to $99MM
46
206
1,650
0.1%
0.1%
0.1%
$100MM to $499MM
24
127
1,013
0.0%
0.1%
0.1%
$500MM to $999MM
2
18
87
0.0%
0.0%
0.0%
$1B +
0
3
26
0.0%
0.0%
0.0%
48,738
221,802
1,508,434
100.0%
100.0%
100.0%
TOTAL
D-7
Amtrak Corridor
Connecticut, Massachusetts, Rhode Island, New York City Metro Area, Northern New Jersey, Philadelphia Metro Area
Macro Market #5: Westchester County, NY
RECENT DEVELOPMENT & FUTURE TRENDS
Westchester County, NY serves as a bedroom community for individuals who work in New York City or in Fairfield County, CT.
Westchester County is a primarily residential area and therefore does not have the major hubs of commercial activity that Fairfield
County does; however, Westchester has significant business developments along its major throughways and corridors in the southern
part of the County. The largest commercial developments in Westchester can be found along Central Park Avenue (Route 100).
Future development in Westchester is tempered by the county’s desire to preserve the scenic and rural character of the region,
particularly in the county’s northern half. The concentration of development in southern Westchester is also a result of the Croton
Watershed agreement, which preserves 40% of the county’s land to protect large water reservoirs used by the county and New York
City.
Westchester County’s 2008 comprehensive plan proposes a high speed transit system for the region. The proposed high speed rail
would run east to west across the I-287 corridor from Suffern to Port Chester and would connect five north to south transit lines
running from Stewart Airport to Stamford, CT.
There is also development underway on the waterfront of the Hudson River and Long Island Sound to transition these areas from
industrial to residential use. Two parcels of land on the Hudson River waterfront are being developed into the Palisades Point
Residential Development. This development will have 436 residential units and is being built as part of a broader renewal of the River
Park Center in downtown Yonkers.
Residential building permit activity in Westchester has been steadily declining since 2000. Building activity continued to slow in 2008;
however, the number of permits reported decreased by 31% – a lower percentage than the decreases seen in either Fairfield County,
the NewAlliance footprint, or the aggregate market area.
D-7