how to select the perfect branch site...2016 spring conference nefma.org how are branch locations...

nefma.org2016 Spring Conference

How to Select the Perfect Branch Site

Todd WoodardSiteTech Systems


When do you Need to Perform a Site Evaluation

• Underperforming Branch• Acquisition• Consolidation• Expansion


Why Should Marketers be Involved in Bank Branch Site Selection?

• Accountable for Product Development and Marketing of Products & Services

• Assess Market Potential• Ensure that Proposed Site is around Core

Customers• Same Media Market

Responsible for Understanding the Customer and Products to Market


Primary Purpose of the Branch or New Site

• Retail Banking• Commercial/Corporate Bank• Convenience to Existing Customers• Brand Identity/Promotion

Identify the Ideal Size of a Branch


How are Branch Locations Selected Today

• Market Executive/President who has Pre-conceived Bias to an Area

• Real Estate Broker who steers you to their listings

• Desire to be in the ‘Path of Development’• Board Member who has an interest in

development of land and feels that a bank should be located on their parcel

Investment in Site Selection Analysis is a Fraction of the Cost of a Bad Location


Ingredients of a Good Site Selection

• Study your Market Demographics• Analyze your Competitors and Market

Growth• Define the Purpose of the Branch• Understand your Customers• Determine your Market/Trade Area• Define your Criteria for a Branch Location


Population AnalysisExisting Population Density

Forecasted Population Growth

Target Areas with Greatest Density and Growth


Competitor Assessment


Competitor Branch Locations within 5 Minutes

9

Map and Analyze Deposit Growth


Deposit Market Share

10

Deposit ($000) Market Share YoY GrowthBank Address 2014 2013 2012 2014 2013 2012 2014 2013SunTrust Bank 1140 E Broad Street $24,000 $23,000 $22,347 4.7% 4.6% 4.6% 4.3% 2.9%

Bank of America, National Association 1335 East Broad Street $33,123 $30,662 $26,548 6.5% 6.2% 5.5% 8.0% 15.5%

Wells Fargo Bank, National Association 1256 East Broad Street $40,745 $37,847 $35,549 7.9% 7.6% 7.3% 7.7% 6.5%

PNC Bank, National Association 1381 North Main Street $16,816 $16,332 $15,357 3.3% 3.3% 3.2% 3.0% 6.3%

Branch Banking and Trust Company 1405 North Main Street $137,880 $127,240 $115,595 26.9% 25.6% 23.8% 8.4% 10.1%

First-Citizens Bank & Trust Company 1344 North Main Street $22,180 $17,280 $17,239 4.3% 3.5% 3.5% 28.4% 0.2%

Four Oaks Bank & Trust Company 325 N Judd Parkway, N.E. $54,591 $59,387 $52,476 10.6% 12.0% 10.8% -8.1% 13.2%

The Fidelity Bank 100 South Main Street $88,584 $85,494 $86,503 17.3% 17.2% 17.8% 3.6% -1.2%

The Fidelity Bank 1304 North Main Street $19,146 $16,430 $16,165 3.7% 3.3% 3.3% 16.5% 1.6%

The Fidelity Bank 1221 Broad Street $2,172 $2,829 - 0.4% 0.6% 0.0% -23.2% N/A

First Federal Bank 603 North Judd Parkway N.E. $17,240 $16,896 $17,502 3.4% 3.4% 3.6% 2.0% -3.5%

NewBridge Bank 210 North Main Street $56,740 $62,989 $81,271 11.1% 12.7% 16.7% -9.9% -22.5%

$513,217 $496,386 $486,552 3.4% 2.0%


Financial Services Market Data


Savings Account Details

Highest Amount $48,523,125

Lowest Amount $1,416,993

Market Value of Savings Accounts

12


Checking Account Details

Highest Amount $21,345,644

Lowest Amount $638,221

Market Value of Checking Accounts

13


Sales Potential DetailsHighest Amount $90,837,656

Lowest Amount $4,360,391

Total Retail Sales Potential

14


Amount of HELOCHighest Amount $903,998

Lowest Amount $28,822

Original Amount of Lump Sum HELOC

15


1st MortgagesHighest Amount 5,123

Lowest Amount 380

Number of 1st Mortgages

16


HELOCsHighest Amount 458

Lowest Amount 46

Number of HELOC

17


Use Full Service BankHighest Amount 6,427

Lowest Amount 857

Use Full Service Bank – Last 12 Months

18


Know your Customer


Determine Trade Area

• Geocode Customer Base• Analyze Active and

Inactive Customers• Analyze Distance Decay

• Drive Time• Mileage

• Create Trade Area for each Branch


Number of Checking Account Holders15 Minute Drive Time

Accounts1,480

Accounts(Within 15 Minute Drive Time)

1,152

78%of total customers are

located within a 15 minute drive to a branch.

21


Lifestyles - Tapestry Segmentation

• Tapestry segmentation provides an accurate, detailed description of America's neighborhoods

• Tapestry divides the U.S. residential areas into 67 distinctive segments based on their socioeconomic and demographic composition

• Tapestry can help answer:• WHO are your best customers and prospects• WHAT do they buy• WHERE can you find more like them• HOW can you reach them

22


LifeStyle Segmentation of Market

23


Socioeconomic Analysis of Customers


Segment Summary – Up and Coming Families

WHO ARE WE?Up and Coming Families is a market in transition—residents are younger and more mobile and ethnically diverse than the previous generation. They are ambitious, working hard to get ahead, and willing to take some risks to achieve their goals. The recession has impacted their financial well-being, but they are optimistic. Their homes are new; their families are young. And this is one of the fastest-growing markets in the country.

Households: 2,562,000Average Household Size: 3.10

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MARKET PROFILE (Consumer preferences are estimated from data by GfKMRI)• Rely on the Internet for entertainment, information, shopping, and banking.• Prefer imported SUVs or compact cars, late models.• Carry debt from credit card balances to student loans and mortgages, but also

maintain retirement plans and make charitable contributions.• Busy with work and family; use home and landscaping services to save time.• Find leisure in family activities, movies at home, trips to theme parks or the zoo,

and sports, from backpacking and baseball to weight lifting and yoga.


Penetration to % of Population Matrix

% of Population

% P

enet

ratio

nHigh

LowHigh

Niche Customer Segment Core Customer Segment

Non-Core Customer Segment Potential Customer Segment

26


Site Evaluation


Analyze Potential Sites

Set Criteria for New Site• Top LifeStyle Group• Above Average Population

Growth• Areas with Strong Financial

Services Products• Serve Out of Market

Customers• Generate a $50 million

Branch


Forecast Cannibalization Rates

New Branch Area Name

Cannibalization Totals

Tempe Area 4,613 Members

Gilbert Area 3,283 Members

I-17 Area 2,198 Members

Peoria/Glendale Area 1,737 Members

Based on Proposed New Site, Calculate Distance and Drive to Closest Branch and

Forecast Cannibalization Rate


Analyze Customer and Prospect Reach

TruWest Loan

Members% of Total Loan

Members

Maricopa County

Residents

% of Maricopa

County Residents

Current Configuration 12,090 55.7% 1.5M 33.6%Addition of I-17 Site 14,031 64.6% 2.1M 47.1%

Increase 1,941 0.6M% Increase 16.1% 40.0%

Within 15 Minutes of a Branch

I-17 Site

Determine Impact to Existing Customers and Reach to

New Prospects

Proposed Site will Result in Lending Growth of 5.4% or $21 Million


Summary

• Analyze Demographic Trends• Know your Customers• Define your Market/Trade Area• Understand your Competition and Market Share• Define Purpose of New Site and Define

Criteria/Objectives for the Site• Model the Impact – Growth and Cannibalization• Use an Independent Party who doesn’t have a

Financial Interest in Acquisition of the Site

how to select the perfect branch site...2016 spring conference nefma.org how are branch locations...

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