One thing that gets our keel is the fact that Somalian pirates really made the concept of being a pirate unfunny. This is sad, because everyone enjoys talking like a pirate. If you doubt this, try calling your CFO with an "Ahoy me hearty, I need a recap of all our doubloons for 1Q or you'll be a scurvy dog!" If the CFO doesn't fall out of their chair laughing, they are missing a sense of humor.
Unfortunately, the percentage of bankers talking like a pirate these days is down, while actual pirate activity is up 11% for the year. From what we understand, greater media attention has increased so now the pirates are trying to beat last year's activity.
If pirates are tracking their performance, banks should as well. A key element in comparing one bank against a broader peer selection is making sure that you can drill down to uncover the relevant details driving growth and performance. For example, if Bank A realizes that deposit growth is skyrocketing at neighboring banks, it makes all the difference to break down that growth into categories to truly analyze how much franchise value the competition is gaining (or losing). As we have tried to stress many times, it is the quality of the balance sheet that really matters in the end.
With the release of 1Q data just around the corner, we thought we should sharpen our pencils and take a look back at some 4Q industry trends we noted. While top performing banks in the Midwest region outpaced the West in terms of deposit growth (for banks with assets of $500mm to $1B), those additions were primarily due to large increases in CD balances. By the end of the year, top performing Midwest banks had a deposit base that averaged 47% in CDs. Similar banks in the West finished the year with just over 30% of their deposits in CDs. Not surprisingly, Midwest banks ended the year with a cost of funds almost 30 bps higher than a similarly comprised group in the West.
The 1Q regulatory reporting deadline is April 30th and we expect to have that data loaded into our BIG Metrics peer analysis model shortly thereafter. If your bank is looking to get a jump on the competition and analyze 2009 data before anyone else, may we humbly suggest you sign u for these best-in-industry peer analysis dashboards and reports?
As bankers can attest, we have seen some rough sailing recently on the financial waters. Each quarter, banks are sizing up the competition, as they look for every angle and opportunity to increase market share and maximize profitability. While we hope none of you will resort to piracy in order to boost your bottom line, we do know that our peer analysis platform will give you the tool you need in order to push to the front of the pack with a booming "Aaarrrggh!"