Publications & Resources

October/November 2007
Focus: Directors Issues

The Business For Better Banking: VIP Solutions To Improve Performance & Profitability

“You try to be greedy when others are fearful, and fearful when others are greedy.”
Warren Buffett (US financier & investment businessman, 1930 - )

By Anne K. Scully , WIB Service Corp. President

All bubbles burst. It was only a matter of time before the real estate bubble burst, producing the credit market turmoil that now clouds the entire financial services industry. The fallout from the credit crunch has included all sectors of the marketplace, including insurance companies and investment and commercial banks. While the Federal Reserve’s recent moves to produce liquidity have helped, concerns still remain regarding financial institutions’ level of exposure and extent to which it can be mitigated.

Fortunately, community banks heeded the warnings and have been able to weather the credit the storm so far. However, there are some signs of stress within the overall banking industry which inevitably will trickle down to the smaller institutions: Charge-offs have risen for two successive quarters and banks have been increasing their reserves over the last three quarters against anticipated problem loans. Non-current loans rose to 0.90 percent at the end of June, FDIC statistics show.

While there’s no magic potion or silver bullet to ease the crunch, several WIB’s endorsed Value & Income Programs (VIPs) may be able to help your bank through the current economic cycle.

Profit Performance Group—Profitability Promised

Established in 1986, Profit Performance Group (PPG) has worked with over 500 banks of all asset sizes – from $35 million to over $100 billion – to identify opportunities for more profitable operating procedures. Nearly 30 WIB banks are PPG clients.

PPG performs a two-day – no cost, no obligation – on-site High-Spot (preliminary analysis) to determine if they can be of significant assistance in helping a bank enhance profits.

Accompanying all PPG projects is the written guarantee to increase the banks' pre-tax income by a pre-determined multiple of the project costs. The guarantee is based on mutually agreed upon recommendations

PPG is powered by Active Intelligence, its proven combination of smart tools, expert support and sustainable results. State-of-the-art PPG systems, processes and techniques determine project feasibility and deliver a detailed study of the institution's entire operations covering more than 400 key criteria that present opportunities for profit improvement.

Experienced former bankers provide specific action plans to guide improvements, which include more efficient operations, teamwork, and the ability to identify and analyze future profit-improvement opportunities.

PPG’s proprietary software, containing predictive operating models, assists in PPG’s onsite analyses:

Cash Analysis determines proper operating cash levels for all branches and ATMs.

Teller Model charts customer traffic patterns by hour of day to determine proper staffing levels using your bank’s actual transaction data. Deliverables include a detailed summary report and a staffing level chart for each day by branch, as well as conversion of transaction volume to work management based on standard transaction times.

Product Profitability provides in-depth profitability data by balance strata on each of your products — checking, savings and money market accounts, etc. — covering annualized expenses, service charge revenue and investment income. This intelligence is presented in real time, what-if scenarios.

With PPG, you can:

Objectively identify operational weaknesses with a detailed study
Quantify opportunities for more profitable operations
Put recommendations into action for immediate and long-term results
Map results to action plan milestones

PPG is an affiliated company of Pinnacle Financial Strategies. WIB members receive special pricing and rebates. Contact: Jenny McKinney, Pinnacle (jenny.mckinney@pinnstrat.com; (713.341.0033).

ODP Next Generation—Consumer Oriented and Proven for Profit

Enhance your customer service, generate additional revenue and minimize risk with VIP Pinnacle Financial Strategies’ ODP Next Generation.

ODP Next Generation (ODPNG), Pinnacle's managed customer care program, is the only overdraft privilege program powered by Active Intelligence software which helps community banks maintain balance between enhanced customer service, revenue generation and risk management.

Pinnacle's superior software was developed exclusively to manage overdrafts. No other software comes close to providing the high degree of automation and customization available with this user-friendly smart tool. It automates business processes and collect data to help you increase productivity, enhance profitability and measure performance.

ODPNG clients that consistently follow Pinnacle's managed program consistently report higher increases in fee income and greater customer satisfaction and retention.

ODPNG is totally turnkey program and 100% regulatory compliant. The implementation process can be completed in eight weeks, with no workflow disruptions, getting your bank started on the road to sustainable results fast and efficiently.

WIB members receive pricing discounts and a complimentary registration to either WIB’s Annual Conference or CFO/Operations/Risk Conference. Contact: David Mann , Pinnacle ( david.mann@pinnstrat.com ; 713.868.3333).

“With Pinnacle’s ‘Bounce Protection’ overdraft program, we have turned an administrative headache into a new service that has generated both customer loyalty and substantial fee income for our bank.”
~ Roger Christensen, President & CEO, Columbia River Bank (OR)