Opportunities Assessment Report

Transcription

1 Opportunities Assessment Report Community Credit Union Winter 2017 Data as-of 12/31/2016

2 Opportunities Assessment Report Introduction The Opportunities Assessment Report (O.A.R) is designed to bring focus to the strategic initiatives that have the greatest potential earnings impact for your organization. This report assesses your institution's current performance on key organizational metrics and then quantifies the potential chane to earnings if your performance improves or worsens. An explanation of how to interpret the report's design is demonstrated below: 1 The blue columns in the top graph show your credit union's prior and current period ratios, while the green column reflects the asset group average. The respective percentiles for your institution's ratios are shown in blue circles below the columns. 4 The report identifies the potential income uplift by improving ratio performance from the current period percentile (e.g. 30th) to the next attainable percentile threshold (50th). 2 The orange columns represent the ratios that fall at each of the designated percentile thresholds (25th, 50th*, 75th, 90th and 95th+*) among all program participants. *50th percentile = median ratio 95th+ percentile = avg. of top 5% 3 The columns in the graph directly below these thresholds demonstrate the potential change in earnings should your institution's ratio increase or decrease to the respective percentile ranking. 2

3 Opportunities Assessment Report Growth Loan to Deposit Ratio Loan Share of Wallet Gen Y Loan Share of Wallet Services per Household New Household Loan Penetration Cross-Sold Households Net Household Growth Investment Services Penetration 3

4 Loan to Deposit Ratio has a 72.4% (27th percentile) loan-to-share ratio compared to the median (50th percentile) at 82.7%. 120% 100% 80% 70.3% 72.4% 79.2% Loan to Deposit Ratio 70.7% 82.7% 93.4% 100.5% 110.6% 60% 40% 20% 0% 32nd 27th Potential Change in Net Income ($000s) $500.0 $ $400.0 $ $300.0 $ Achieving results in the 50th percentile translates to a potential net income uplift of $123,115. $200.0 $100.0 ($100.0) $ ($20.46) 4

5 Loan Share of Wallet 's loan share of wallet is 28% (36th percentile), compared to the median (50th percentile) at 31%. 60% Loan Share of Wallet 52.7% 50% 43.7% 40% 30% 25.2% 27.5% 30.9% 24.9% 30.7% 36.3% 20% 10% 0% 28th 36th Achieving results in the 50th percentile translates to a potential net income uplift of $40,334. $350.0 $300.0 $250.0 $200.0 $150.0 $100.0 $50.0 ($50.0) ($100.0) ($34.20) Potential Change in Net Income ($000s) $40.33 $ $ $

6 Loan Share of Wallet with Millennials 60% 's share of Millennial members' loan wallet is 23% (33rd percentile), compared to the median (50th percentile) at 25%. Millennials Loan Share of Wallet 50% 49.4% 40% 30% 20% 20.0% 22.6% 26.1% 21.1% 25.4% 31.5% 38.6% 10% 0% 25th 33rd Achieving results in the 50th percentile translates to a potential net income uplift of $8,757. $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 ($10.0) Potential Change in Net Income ($000s) $8.76 $27.28 $49.17 $81.92 ($4.38) 6

7 Products per Household has 2.25 products per household (73rd percentile), compared to the median (50th percentile) at Potential Change in Net Income ($000s) $50.0 $ rd 73rd $40.0 Achieving results in the 90th percentile translates to a potential net income uplift of $19,564. $30.0 $20.0 $10.0 ($10.0) ($20.0) ($30.0) ($40.0) Products per Household ($29.10) 2.05 ($15.83) 2.27 $ $

8 New Household Loan Penetration 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 's loan penetration into new households is 44.1% (42nd percentile), compared to the median (50th percentile) at 49.8%. 27.2% 44.1% 46.1% $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 ($10.0) ($20.0) ($30.0) 33.0% ($16.82) 49.8% Potential Change in Net Income ($000s) $ % $ % 19th 42nd Achieving results in the 50th percentile translates to a potential net income uplift of $8,623. New HH Loan Penetration $ % $

9 Cross-Sold Households 25% 20% 15% 10% 's cross-sold household ratio is 14.5% (82nd percentile), compared to the median (50th percentile) at 11.0%. 15.4% 14.5% 12.2% Cross-Sold Households 9.3% 11.0% 13.5% 16.2% 21.1% 5% 0% 87th 82nd Achieving results in the 90th percentile translates to a potential net income uplift of $11,333. $50.0 $40.0 $30.0 $20.0 $10.0 ($10.0) ($20.0) ($30.0) ($40.0) Potential Change in Net Income ($000s) ($23.21) ($6.76) $11.33 $43.33 ($34.70) 9

10 Net Household Growth 25% has a household growth rate of 3.2% (40th percentile), compared to the median (50th percentile) at 4.2%. Net Household Growth* 22.5% 20% 15% 10% 5% 3.2% 6.2% 1.5% 4.2% 7.6% 11.1% 0% -5% -2.1% 10th 40th Achieving results in the 50th percentile translates to a potential net income uplift of $4,181. *Client ratio is annualized growth from most recent prior period. s are annualized six-month growth rates. $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 ($10.0) ($20.0) ($7.1) Potential Change in Net Income ($000s) $4.2 $18.6 $33.3 $

11 Investment Services Penetration did not supply information regarding its investment services. 12% Investment Services Penetration - % of HHs 11.3% 10% 9.7% 8% 6% 5.6% 4% 2% 0% 0.0% 0.0% $100.0 $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $ % Potential Change in Net Income ($000s) N/A N/A Achieving results in the 25th percentile translates to a potential net income uplift of $8,914. $ % $ % $27.54 $45.06 $90.86 has negative or missing profit on investment services; National Average investment svc profit was used to compu te uplift. 11

12 Opportunities Assessment Report Earnings Non-Interest Income per Household Net Interest Margin Earning Asset Yield Cost of Funds Checking HH Cross-Sell Profit New Household Profit Unprofitable Households 12

13 Non-Interest Income per Household $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 's non-interest income per household is $221 (53rd percentile), compared to the median (50th percentile) at $218. $225 $221 $201 $1.4 $1.2 $1.0 $0.8 $0.6 $0.4 $0.2 ($0.2) ($0.4) $182 60th 53rd Achieving results in the 75th percentile translates to a potential net income uplift of $314,762. Non-Interest Income $218 Potential Change in Net Income ($M) (2) $269 $0.31 $316 $0.61 $424 $1.32 ($0.25) 13

14 Net Interest Margin 6.00% has a 3.87% net interest margin (81st percentile), compared to the median (50th percentile) at 3.26%. Net Interest Margin 5.00% 4.00% 3.00% 3.82% 3.87% 3.92% 2.88% 3.26% 3.75% 4.12% 4.83% 2.00% 1.00% 0.00% 78th 81st Potential Change in Net Income ($M) $1.5 $1.17 $1.0 Achieving results in the 90th percentile translates to a potential net income uplift of $304,928. $0.5 ($0.5) ($1.0) ($1.5) $0.30 ($0.14) ($0.73) ($1.18) 14

15 Earning Asset Yield has a 4.13% yield on earning assets (71st percentile), compared to the median (50th percentile) at 3.71%. 6.00% Earning Asset Yield 5.33% 5.00% 4.00% 4.08% 4.13% 4.35% 3.26% 3.71% 4.21% 4.59% 3.00% 2.00% 1.00% 0.00% 71st 71st Potential Change in Net Income ($M) $2.0 $1.45 $1.5 Achieving results in the 90th percentile translates to a potential net income uplift of $550,818. $1.0 $0.5 ($0.5) ($1.0) ($1.5) $0.55 $0.10 ($0.50) ($1.05) 15

16 Cost of Funds 0.70% 0.60% has a 0.26% cost of funds (78th percentile), compared to the median (50th percentile) at 0.44%. 0.58% Cost of Funds 0.50% 0.44% 0.44% 0.40% 0.30% 0.20% 0.26% 0.26% 0.29% 0.20% 0.13% 0.10% 0.00% 80th 78th Potential Change in Net Income ($000s) $200.0 $ $100.0 $75.13 Achieving results in the 90th percentile translates to a potential net income uplift of $75,126. ($100.0) ($200.0) ($300.0) ($400.0) ($500.0) ($29.38) ($210.12) ($384.76) 16

17 Checking Household Cross-Sell Profit $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 's average profit on cross-sales to checking households is $42 per household (36th percentile), compared to the median (50th percentile) at $75. $46 $42 $71 $1.6 $1.4 $1.2 $1.0 $0.8 $0.6 $0.4 $0.2 ($0.2) $15 40th 36th Achieving results in the 50th percentile translates to a potential net income uplift of $129,016. Cross-Sell Profit per Checking HH $75 Potential Change in Net Income ($M) $0.13 $142 $0.39 $200 $0.61 $426 $1.49 ($0.10) 17

18 New Household Profit $600 's new household profit is $278 (83rd percentile), compared to the median (50th percentile) at $104. New Household Profit $564 $500 $400 $300 $200 $100 $0 $342 $278 $234 $119 $104 $56 $25 Potential Change in Net Income ($000s) 35th 83rd $80.0 $60.0 $58.18 $40.0 Achieving results in the 90th percentile translates to a potential net income uplift of $12,997. $20.0 ($20.0) ($40.0) ($60.0) $13.00 ($8.99) ($35.54) ($51.66) 18

19 Unprofitable Retail Households 80% 70% 60% 50% At, 70% of retail households are unprofitable (59th percentile), compared to the median (50th percentile) at 71%. 68% 70% 68% Unprofitable Retail Households ('D' & 'E') 76% 71% 66% 59% 48% 40% 30% 20% 10% 0% 74th 59th Achieving results in the 75th percentile translates to a potential net income uplift of $43,283. $300.0 $250.0 $200.0 $150.0 $100.0 $50.0 ($50.0) ($100.0) A lower percentage of 'D' and 'E' households corresponds to higher percentiles. Potential Change in Net Income ($000s) ($19.32) $43.28 $ $ ($75.54) 19

20 Opportunities Assessment Report Efficiency & Delivery Efficiency Ratio Revenue per Employee Debit Card Transaction Volume Credit Card Transaction Volume E-Statement Usage 20

21 Efficiency Ratio 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 's efficiency ratio is 89% (7th percentile), compared to the median (50th percentile) at 77%. 89% 89% 79% $3.5 $3.0 $2.5 83% 12th 7th Efficiency Ratio 77% 70% 65% Potential Change in Net Income ($M) 54% $2.90 Achieving results in the 25th percentile translates to a potential net income uplift of $363,828. A lower efficiency ratio corresponds to higher percentiles. $2.0 $1.5 $1.0 $0.5 $1.67 $1.22 $0.74 $

22 Revenue per Employee 's revenue per employee is $128,122 (11th percentile), compared to the median (50th percentile) at $168,647. $350 K $300 K Revenue per FTE $324,166 $250 K $200 K $150 K $122,446 $128,122 $152,979 $146,803 $168,647 $199,553 $225,903 $100 K $50 K 0 10th 11th Achieving results in the 25th percentile translates to a potential net income uplift of $653,841. $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.65 Potential Change in Net Income ($M) $1.42 $2.50 $3.42 $

23 Debit Card Transaction Volume 's average transaction volume per debit card is 21.3 transactions per month (65th percentile), compared to the median (50th percentile) at th 65th Achieving results in the 75th percentile translates to a potential net income uplift of $27,366. $350.0 $300.0 $250.0 $200.0 $150.0 $100.0 $50.0 ($50.0) ($100.0) ($150.0) Monthly Transactions per Debit Card ($87.79) 19.4 ($30.45) 23.0 $ Potential Change in Net Income ($000s) $ $

24 Credit Card Transaction Volume 12.0 's average transaction volume per credit card is 4.0 transactions per month (16th percentile), compared to the median (50th percentile) at 5.4. Monthly Transactions per Credit Card th 16th Potential Change in Net Income ($000s) $140.0 $ $120.0 $100.0 $91.43 Achieving results in the 25th percentile translates to a potential net income uplift of $11,388. $80.0 $60.0 $40.0 $20.0 $58.57 $31.87 $

25 E-Statement Penetration 140% 120% 's e-statement penetration is 23% (9th percentile), compared to the median (50th percentile) at 56%. E-Statements as % of Total Households 122% 100% 93% 80% 72% 60% 40% 20% 19% 23% 36% 41% 56% 0% 7th 9th Potential Change in Net Income ($000s) $140.0 $120.0 $ Achieving results in the 25th percentile translates to a potential net income uplift of $20,774. $100.0 $80.0 $60.0 $40.0 $20.0 $81.01 $57.46 $38.14 $

26 Opportunities Assessment Report Summary of Uplift Potential The following slides summarize the potential uplift for each ratio should your organization improve performance from the current percentile/ratio to the target percentile/ratio. These estimates represent only the standalone opportunity from improved performance on each respective ratio. That is, the results shown are mutually exclusive and should not be considered cumulatively. Consider that some ratios capture a broader measure of performance than others and, in turn, may inherently reflect greater income potential. For example, ratios that measure loan growth (Loan to Share, Loan Share of Wallet) contain more inherent income potential than ratios with a more targeted focus (New Household Profit, E-statement Penetration) Keeping these factors in mind, the results will help highlight the particular areas of performance that warrant the greatest strategic consideration for your organization. 26

27 Summary of Growth Opportunities Potential Uplift by Improving to Target Current Target Loan to Deposit Ratio $123,115 27th 50th 72.4% 82.7% Loan Share of Wallet $40,334 36th 50th 27.5% 30.7% Millennials Loan Share of Wallet $8,757 33rd 50th 22.6% 25.4% Products per Household New HH Loan Penetration Cross-Sold Households Net Household Growth Investment Svcs Penetration $19,564 $8,623 $11,333 $4,181 $8,914 $0 $20 $40 $60 $80 $100 $120 $140 ($000) 73rd 90th nd 50th 44.1% 49.8% 82nd 90th 14.5% 16.2% 40th 50th 3.2% 4.2% N/A

28 Summary of Earnings Opportunities Potential Uplift by Improving to Target Current Target Non-Interest Income per HH $314,762 53rd 75th $221 $269 Net Interest Margin $304,928 81st 90th 3.87% 4.12% Earning Asset Yield $550,818 71st 90th 4.13% 4.59% Cost of Funds $75,126 78th 90th 0.26% 0.20% Checking HH Cross-Sell Profit $129,016 36th 50th $42 $75 New HH Profit $12,997 83rd 90th $278 $342 Unprofitable Retail HH $43,283 59th 75th 70% 66.1% $0 $100 $200 $300 $400 $500 $600 28

29 Summary of Efficiency Opportunities Potential Uplift by Improving to Target Current Target Efficiency Ratio $363,828 7th 25th 89% 83% Revenue per Employee $653,841 11th 25th $128,122 $146,803 Debit Card Transactions $27,366 65th 75th Credit Card Transactions $11,388 16th 25th E-Statement Penetration $20,774 9th 25th 23% 41% $0 $100 $200 $300 $400 $500 $600 $700 ($000) 29