ABA Banking Journal Competitiveness Survey 2008 - (Page S3) A PROJECT OF THE ABA AMERICA’S COMMUNITY BANKERS COUNCIL & ABA BANKING JOURNAL COMPETITIVENESS SURVEY 2007 2008 Striving & Seeking Competition drives community bank improvement From its beginning to this, its twelfth edition, this survey has focused on “competition,” more specifically, “competitiveness,” a basic of banking life, and, indeed, the foundation of capitalism. The word “competition” has long had many modifiers. Think of “rampant,” “unfair,” “friendly,” “subsidized,” and even “dumb.” Competition, though often messy, and sometimes downright ugly, nevertheless also brings out the best. There is nothing like the arrival of a new player in town to make a bank smarten itself up. Without competition, human nature breeds complacency. With it, stress rises. But so does effort, and with it, quality. Think of the root word—“compete”—for a moment. It comes from Latin, “com” meaning “together,” and “petere,” meaning “to seek, to strive,” and, joined up, means, “to strive together.” Competitors strive to best the others. But, going back to the root words, to do so, they also seek. They seek better methods, better markets, better staff, better technology. Much of what you will read in the survey report was driven by the need to do more than competitors, to offer products with more customer appeal, to improve business channels, and more. The alternative, increasingly, is disappearance—or, short of that, irrelevance. It is clear from the survey, many of the bankers responding intend for their institutions to be the survivors. As Exhibit 1, below, shows, more than one in three of the banks responding to the survey plan to be the acquirors within the five years ahead. And, as Exhibit 2, left, shows, less than one in ten of the respondents expect to be acquired within the next five years. Less than 5% expect to join a multibank holding company within the five years, too. In other words, most of the banks responding to this year’s survey expect to not only compete, but to win. Some won’t. But all will try. En garde. Exhibit 1 COMMUNITY BANK CONTENTS This report presents six broad areas for your planning: OUTSOURCING: Why “out” is “in” . . . . . . . . . . . p. S4 DEPOSITS & FUNDING: Game remains the same..p. S6 TECHNOLOGY: Bits, Bytes & Bob. . . . . . . . . . . . p. S8 REMOTE DEPOSIT CAPTURE: Making the promise pay off . . . . . . . . . . . . . . . . . . . . . . . p. S10 HEALTH SAVINGS ACCOUNTS: Banks’ belated tonic . . . . . . . . . . . . . . . . . . . . . . . . . . p. S20 EXAMINATIONS: Calm before a storm? . . . . . . p. S22 Exhibit 2 >Do you expect your bank to be acquired within five years? BY ASSET SIZE YES >Do you expect to acquire another bank within five years? BY ASSET SIZE YES Under $100 million $101-$200 million $201-$500 million $501-$999 million $1 billion-up BY REGION 7.5% 9.1 4.8 6.9 10.5 YES Yes 7.3% Under $100 million $101-$200 million $201-$500 million $501-$999 million $1 billion-up BY OWNERSHIP TYPE 22.1% 34.2 45.8 52.1 69.4 YES West Southeast Northeast Midwest Southwest Central 13% 12.7 7.9 5.1 3.8 3.6 No 92.7% Publicly traded Closely held Mutual Family owned BY REGION 54.2% 35.9 33.3 30.1 YES Yes 37.2% No 62.8% Written and directed by Steve Cocheo, executive editor Design and layout by Wendy Williams, art director Charts by Amanda Kirk Art assistance by Phil Desiere, associate art director, and Nicole Frederickson, intern Competitiveness Survey 2008 Northeast Southeast Midwest Southwest West Central 43% 40 36.4 35.6 33.3 33.3 OWNERSHIP PROFILE OF INDUSTRY* Closely held Family owned Publicly traded Mutual Employee-owned 43.4% 24.5 19.6 11.4 1.1 *Based on survey samples. ABA BANKING JOURNAL/MARCH 2008 S3
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