Freedom Financial (Example Only) Market Insights Report. Prepared by Kasasa s Executive Strategy Department

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Terence Cole
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1 Freedom Financial (Example Only) Market Insights Report Prepared by Kasasa s Executive Strategy Department

2 Demographic Analysis Executive Summary POPULATION City, ST Sample County Example DMA Total Population 190, ,014 1,995,200 Female 51.2% 51.0% 50.4% Male 48.8% 49.0% 49.6% Median Age Most Common Age Range Age 20 to 24, 10.6% Age 20 to 24, 7.7% Age 20 to 24, 7.4% Typical Person Ethnicity White, 64.0% White, 79.5% White, 84.8% Hispanic Ethnicity 15.9% 10.0% 7.3% Now Married 51.5% 55.4% 49.5% Unemployed 5.3% 5.6% 5.8% Most Common Income Range $50,000 - $74,999, 20.4% $50,000 - $74,999, 19.6% $50,000 - $74,999, 20.4% Average (Mean) Household Income $47,612 $60,764 $56,616 Median Household Income $35,461 $45,947 $43,588 Per Capita Income $19,480 $23,430 $22,075 12% AGE 10% City, ST 8% 6% Sample County 4% 2% Grand Rapids- Kalamazoo-Battle Creek, MI DMA 0% Household Income 25% 20% 15% 10% 5% 0% City, ST Sample County Grand Rapids- Kalamazoo-Battle Creek, MI DMA 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Avg Household Income City, ST Sample County Example DMA 4

3 Demographic Analysis Market Potential City, ST Sample County Example DMA Technology Adoption Index Index Index Used ATM in last 12 months 65, , , Used direct deposit in last 12 months 13, , , Did banking over the internet in last 12 months 30, , , Institution Types Use full service bank 68, , , Use Savings & Loan 51, , , Use Fed Savings Bank 40, , , Use credit union 35, , , Use internet bank 47, , , Deposit Accounts Have interest checking account 14, , , Have non-interest checking account 22, , , Have savings account 16, , , Own certificate of deposit (6 months or less) 4, , , Own certificate of deposit (more than 6 months) 6, , , Consumer Credit Have auto loan 98, , ,102, Have home mortgage 12, , , Have Overdraft Protection 13, , , Own AMEX card 43, , , Own Discover 65, , , Own MC 33, , , Own Visa 5, , ,

4 Demographic Analysis Population Data City, ST Sample County Example DMA AGE Age 0 to 4 15, % 44, % 133, % Age 5 to 9 13, % 43, % 137, % Age 10 to 14 11, % 43, % 139, % Age 15 to 19 13, % 43, % 145, % Age 20 to 24 20, % 47, % 148, % Age 25 to 29 17, % 44, % 128, % Age 30 to 34 15, % 41, % 125, % Age 35 to 39 11, % 36, % 116, % Age 40 to 44 10, % 39, % 128, % Age 45 to 49 10, % 41, % 138, % Age 50 to 54 11, % 43, % 146, % Age 55 to 59 10, % 39, % 134, % Age 60 to 64 8, % 30, % 110, % Age 65 to 69 5, % 21, % 82, % Age 70 to 74 4, % 15, % 60, % Age 75 to 79 3, % 12, % 45, % Age 80 to 84 3, % 10, % 35, % Age 85 Plus 4, % 11, % 37, % Median Age Minors 53, % 175, % 555, % Adults 115, % 365, % 1,178, % Elderly 21, % 70, % 261, % Generation Y 51, % 135, % 422, % Generation X 47, % 159, % 508, % Baby Boomers 29, % 113, % 392, % Total Households Asian 3, % 14, % 33, % Black 39, % 59, % 145, % Multi-Race 8, % 19, % 53, % Native American 1, % 3, % 10, % Pacific Islander % % % White 121, % 485, % 1,690, % Other 15, % 28, % 60, % Not of Hispanic Ethnicity 160, % 550, % 1,850, % 12% 10% City, ST AGE 8% 6% 4% Sample County 2% 0% 6

5 Demographic Analysis Household and Income Data City, ST Sample County Example DMA HOUSEHOLD INCOME $0 - $14, % 33, % 110, % $15,000 - $24,999 10, % 27, % 93, % $25,000 - $34,999 10, % 28, % 93, % $35,000 - $49,999 11, % 33, % 120, % $50,000 - $74,999 12, % 45, % 153, % $75,000 - $99,999 6, % 26, % 81, % $100,000 - $149,999 4, % 24, % 69, % $150,000 - $199,999 1, % 5, % 16, % $200, % 6, % 13, % Average (Mean) Household Income $47,612 $60,764 $56,616 Median Household Income $35,461 $45,947 $43,588 Household Expenditures $0 $0 Median Disposable Household Income and Size 50,000 40,000 30,000 20,000 10,000 0 City, ST Sample County Example DMA Median Household Income Avg HH Size Household Income 25% City, ST 20% 15% Sample County 10% 5% Example DMA 0% 7

Demographic Analysis FDIC Banked Status FDIC Geographic Regional Map State Data Michigan Geographic Region Midwest Banked Status (1,000s) Banked 3,015 76.6% 20,358 76.8% Underbanked* 658 16.

0% Midwest Northeast South West 76% 17% 7% Underbanked Unbanked Banked Banked Underbanked Unbanked * Unbanked households were defined by the FDIC as a household where no one currently had a checking

6 Demographic Analysis FDIC Banked Status FDIC Geographic Regional Map State Data Michigan Geographic Region Midwest Banked Status (1,000s) Banked 3, % 20, % Underbanked* % 4, % Unbanked** % 1, % Total 3,938 26,507 Banked Status by Region Banking Status of Households in Michigan 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Midwest Northeast South West 76% 17% 7% Underbanked Unbanked Banked Banked Underbanked Unbanked * Unbanked households were defined by the FDIC as a household where no one currently had a checking or savings account. ** Underbanked households were defined by the FDIC as those that have a checking or savings account but rely on alternative financial services, such as non-bank money orders, non-bank check-cashing services, payday loans, rent-to-own agreements, or pawn shops. 8

7 Deposit Market Share Analysis Share of Deposit (000) Commercial and Retail 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 40.2% 17.5% 18.1% 1.3% 4.5% Sample 1 Sample 2 Sample 3 Sample 4 Sample 5 Deposits per City Share per City $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $- SOURCE: FDIC & NCUA COMBINED DATA. ANNUAL UPDATE. LAST UPDATED JUNE NCUA DATA ON FI-LEVEL DIVIDED BY THE NUMBER OF BRANCHES IN AN INSTITUTION Kasasa, LTD. All rights reserved. Not for distribution.

Kasasa Consumer Segments ABOUT THE CUSTOM SEGMENTATION As an industry leading marketing expert, Kasasa continues to evolve community financial institution marketing by leveraging deep understanding

5 million Kasasa accounts, we know that in every market across the country we can find consumers who are up to 3 times more likely to establish and maintain a profitable relationship with your

This approach empowers our clients with the actionable insights that are typically only available to the big banks. Now it is available to your organization as well!

8 Kasasa Consumer Segments ABOUT THE CUSTOM SEGMENTATION As an industry leading marketing expert, Kasasa continues to evolve community financial institution marketing by leveraging deep understanding of consumer data and behavior. Using data from a nationally representative sample of 1.5 million Kasasa accounts, we know that in every market across the country we can find consumers who are up to 3 times more likely to establish and maintain a profitable relationship with your institution. Combining Nielsen's sixty-six PRIZM segments with Kasasa account profitability data, we developed 12 consumer segments that we can identify and engage in every U.S. market. This approach empowers our clients with the actionable insights that are typically only available to the big banks. Now it is available to your organization as well! As part of every engagement, we perform a detailed analysis of consumers in the market to be used in marketing planning and product design. To find out how to get yours, just ask a representative from Kasasa. SAMPLE DETAILS PROVIDED TO CLIENT This information (and more) is leveraged with our clients as we work together on a marketing plan recommendation.

Your Market Divided Across Key Segments 2017

11 Market Landscape and Analysis CONSUMER PURCHASE BEHAVIOR HAS SHIFTED TO PRODUCT-FIRST The financial industry has seen consumer buying behavior shift toward a product first path to purchase. Today s consumer is conditioned to shop for financial products and services online, as is the case with other industries. Once a product choice has been made, the consumer will determine where to source the product or service. Product Provider A comparison outside of the banking industry would be a consumer researching what smartphone to purchase. Once the consumer decides on the iphone, the next step is choosing the preferred carrier. As illustrated in the pyramid, the provider decision bears heavier consideration, yet comes second in the sequence. This demonstrates the need for a marketing strategy that will bring awareness to products with high consumer appeal during the product-research phase. LOCAL SEARCH ENGINE RANKINGS PRESENT AN OPPORTUNITY FOR OPTIMIZATION Knowing consumers go online to shop for products before selecting a financial institution, the first step to winning this valuable business is having products that are discoverable through search engines (i.e. Google, Bing, Yahoo). To accomplish consistently high search rankings requires an aggressive, ongoing search engine marketing strategy. The table below represents where Freedom Financial ranks currently on Google for some of the most popular keywords. Search Results on Google.com For Common Terms Search Term City, State Ranking Directs To What Page Free Checking City, ST 120 Online Banking Interest Checking City, ST 200+ n/a Savings City, ST 165 Home Auto Loan City, ST 200+ n/a Mortgage City, ST 200+ n/a 14

12 Competitive Landscape Analysis THE LOCAL COMPETITIVE LANDSCAPE IS AGGRESSIVE Freedom Financial has an opportunity to evaluate the competitive offerings in its area as it determines how to structure the rewards platform for its accounts. The upper tier of local interest-bearing accounts is between 2.05% and 3.00%, while high-yield checking rates are up to 5.12%. Mega banks and online banks are slightly below the upper tier of local rates at 1.25% 2.05%. Summary of Local Competitive Rates 2.05% 2.05% 2.06% 2.10% 1.25% 1.76% 1.75% 1.75% 1.90% 3.00% 3.00% 4.00% 4.00% 5.00% 5.12% Local Reward Checking Competitive Rate Market Local Competitive Rate Market National Mega Banks & Net Banks Competitive Rate Market COMPETITIVE BANKS CONTINUE TO INCREASE CONSUMER INCENTIVES AND REWARDS In addition to rate offerings in the competitive environment, Freedom Financial should also consider promotional offers designed to attract checking account relationships when deciding how to position its accounts in the market. Summary of Top National Competitive Offers Institution Promotional Offer Account Type Citibank $500 Bonus Checking Chase $300 Bonus Checking BMO Harris $200 Bonus Checking BBVA Compass $125 in Gift Cards Checking Discover Bank Up to $120 Bonus Checking SunTrust Bank Up to $200 Bonus Checking Bank of America $100 Bonus Checking CapitalOne Up to $500 Bonus Savings Source: MoneyCrashers.com, Best New Bank Account Promotions, Offers, & Free Money Mar

Competitive Marketing Spend Analysis SCALED MARKETING IS PARAMOUNT TO CUT THROUGH CLUTTER The credit union s footprint falls under a single Designated Market Area (DMA as

Understanding marketing share of voice in the DMA is important even if Freedom Financial does not need or want to target the entire area.

As illustrated by the chart below, the marketing messages are abundant in the credit union s local area.

13 Competitive Marketing Spend Analysis SCALED MARKETING IS PARAMOUNT TO CUT THROUGH CLUTTER The credit union s footprint falls under a single Designated Market Area (DMA as defined by Nielsen in determining TV viewing areas): the Example DMA. In this area, one financial institutions spends 75% of the local, trackable media dollars. Understanding marketing share of voice in the DMA is important even if Freedom Financial does not need or want to target the entire area. This is because its prospective account holders are hearing and seeing these messages, regardless of geography. As illustrated by the chart below, the marketing messages are abundant in the credit union s local area. Local&Marketing&Spend&on&Financial&Services Example&DMA LAKE-MICHIGAN-CREDIT-UNION- -18% 25% 18% HUNTINGTON-BANK-SVCS- -11% CONSUMERS-CREDIT-UNION- -10% FIFTH-THIRD-BANK-SVCS- -8% 3% 3% 11% OPTION-1-CREDIT-UNION- -7% FLAGSTAR-BANK-SVCS- -6% MACATAWA-BANK-SVCS- -6% 5% 5% 6% 6% 8% 10% OLD-NATL-BANK-SVCS- -5% MERCANTILE-BANK-SVCS- -3% CHASE-BANK-SVCS- -3% ALL-OTHERS- -25% 16

14 Don't miss out on your complete Market Insights Report NOTE: This is just a sample report. In addition to the information here, the full version of the Market Insights Report also includes the sections listed below, under Retail Best Practices. These sections provide an in-depth examination of your current retail strategy and layout specific tactical improvements that will allow your institution to begin attracting younger and more profitable account holders. In order to obtain a complete Market Insights Report, including Retail Best Practices, please visit to request yours. Retail Best Practices Retail Readiness Active & Visible Leadership Expectations & Accountability Engaged & Knowledgeable Influential Branch Managers Consistent, High Quality Experience Retail Product Lineup Strategic Alignment Consumer Appeal Marketability Manageable Offering Consumer Technologies Marketing Creative Financial Institution s Brand Targeting Frequency Measurement Technology Data Security Marketing Automation Platform Enterprise Data Warehouse Rewards Platform Learning Management System Business Intelligence Platform Sales Technology Content Management System Customer Relationship Management

In Baltimore City today, 20% of households live in poverty, but more than half of the

Building Economic Opportunity in Baltimore: A Data Profile Baltimore Highlights In Baltimore City today, 20% of households live in poverty, but more than half of the city s population 55% is financially