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The Michael White
Community Bank Investment Programs Report™ is an
annual report on the performance of community bank investment programs. Produced by Michael White Associates, this report measures and benchmarks community banks’ performance in generating
investment program income and its components, securities brokerage and annuity fee
income.
Especially exciting is that the
Michael White Community Bank Investment Programs Report™ uses new and innovative benchmarking ratios that give insight into the performance of community bank investment
programs and enables their comparison to other specific banks:
· Program Productivity
· Program Density
· Program Contribution
· Program Concentration
· Program Penetration
Program Productivity measures the production of investment program income per bank employee. It enables us to assess the relative generation of income among bank employees, the important human assets in generating customer referrals and the attendant fee income earned from those customer relationships.
Program Density calculates the amount of program fee income per domestic banking office. Program density evaluates the relative density of program income among banking locations, the critical physical assets in generating investment program income.
Program Contribution measures the contribution that investment program income makes to bank net operating revenue. Net operating revenue is the sum of net interest income and total noninterest income. This benchmark, therefore, measures the proportionate contribution investment program income makes to a bank’s total revenue.
Program Concentration calculates the portion of total noninterest income attributable to a specific kind of noninterest fee income. This ratio enables us to know how concentrated bank investment programs are within their banks’ nonlending activities.
Program Penetration is a popular old benchmark MWA has reinvigorated with new, more reliable data. The old benchmark, long used by the industry, is “penetration,” more fully known as “deposit penetration rate or ratio.” The penetration of an investment program is measured as the amount of program revenue generated per million dollars of core or retail deposits (or as a percentage of retail deposits). These deposits substitute as a measure of retail customers and the breadth of the customer relationship.
The Michael White Community Bank Investment Programs
Report™ does not rely on surveys of small samples of community banks. It is based on year-to-date data reported by all commercial banks and FDIC-regulated savings banks operating at the end of each calendar quarter, including data that became available for the first time in first quarter 2007. This report examines securities brokerage income, annuity
income and investment program income.
The Michael White Community Bank Investment Programs
Report™ gives a comprehensive look across all banks in the community bank industry segment (under $4B in assets); then, it segments those community banks into five asset classes for further peer-analyses:
(1) banks between $1 billion and $4 billion in assets,
(2) banks with assets between $500 million and $1 billion,
(3) banks with assets between $300 million and $500 million,
(4) banks between $100 million and $300 million in assets, and
(5) banks under $100 million in assets.
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