SteveNikitasSeniorStrategyDirectorHarlandClarke

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April25,2017

TheMarketer’sGuideToJustifyingYourExistencePart1:MeasuringSuccessofAccountHolderAcquisition

ChristineAhlgrenPaymentsMarketing

HarlandClarke

Yourhost:

©2017HarlandClarke.Allrightsreserved.

TheMarketer’sGuide

PART1MeasuringSuccessofAccountHolderAcquisition

PART2MeasuringtheImpactofCross-sellMarketingCampaignsJuly19@1p.m.ET

PART3RelatingAccountHolderLifetimeValuetoIndividualMarketingInitiativesOctober24@1p.m.ET

2 ©2017HarlandClarke.Allrightsreserved.

HistoricalNetInterestMargins

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

Q11984

Q41984

Q31985

Q21986

Q11987

Q41987

Q31988

Q21989

Q11990

Q41990

Q31991

Q21992

Q11993

Q41993

Q31994

Q21995

Q11996

Q41996

Q31997

Q21998

Q11999

Q41999

Q32000

Q22001

Q12002

Q42002

Q32003

Q22004

Q12005

Q42005

Q32006

Q22007

Q12008

Q42008

Q32009

Q22010

Q12011

Q42011

Q32012

Q22013

Q12014

Q42014

Q32015

Q22016

InterestIncome- InterestExpenseNet Interest Margin

Source:FederalFinancialInstitutionsExaminationCouncil3

NIMsfallbelow3%

©2017HarlandClarke.Allrightsreserved.

WhatImpactsNetInterestMargin?

Short-terminterestrates

Geography

● Lesscompetitiveareasmeansafinancialinstitutionmayoffer

lowdepositratesandchargehighloanrates

Accountholdergrowth

● Deeperrelationships

Loandemand

● StrongloandemandcanimproveNIMsduetoLoanYields

4 ©2017HarlandClarke.Allrightsreserved.

HistoricalEfficiencyRatios

64.62

61.16

61.8 61.45

62.8862.26

60.94

59.75

60.7860.27 60.06

57.95

57.64

65.31

52

54

56

58

60

62

64

66

Q32013 Q42013 Q12014 Q22014 Q32014 Q42014 Q12015 Q22015 Q32015 Q42015 Q12016 Q22016 Q32016 Q42016

Efficiencyratioisameasureofafinancialinstitution’soverheadasapercentageofitsrevenue

Source:BankRegData.com

5 ©2017HarlandClarke.Allrightsreserved.

WhatImpactsEfficiencyRatios?

Decreasedcosts

Geographies

Improvedworkflows

● Economiesofscale

o Thecostofproducing/servicinggoesdownwhileoutputgoesup

Increasedrevenue

● Loandemand

● Noninterestincome

6 ©2017HarlandClarke.Allrightsreserved.

LoantoDeposit/ShareRatios

69.31%

68.90%

69.46% 69.29%

68.59%

68.91%

70.63%71.09%

71.54%

70.95%

71.83%71.19%70.90%

69.21%

71.66%

74.04%

74.91%

73.30%

75.52%

77.53% 77.50%

76.08%

77.87%78.60%

65%

67%

69%

71%

73%

75%

77%

79%

Q4- 2013 Q1- 2014 Q2- 2014 Q3- 2014 Q4- 2014 Q1- 2015 Q2- 2015 Q3- 2015 Q4- 2015 Q1- 2016 Q2- 2016 Q3- 2016

Banks CreditUnions

Source– BankRegData.comandNCUA

7

LoanToDepositRatio– Q32007– 93.1%

©2017HarlandClarke.Allrightsreserved.

SalesSources

59%

21%

12%

6%2%

Plannedtoopenanaccountw/oprompting

Thinkingofopeningaccountandpromptedbyreceivingsomethingfrombank

Thinkingofopeningaccountandpromptedaftertalkingtosomeoneatbank

Notthinkingofopeningaccountuntilpromptedbysomeoneatbank

Notthinkingofopeningaccountandpromptedafterreceivingsomethingfrombank

8

Source: 2013 Gallup U.S. Retail Banking Survey

©2017HarlandClarke.Allrightsreserved.

DirectMarketingIsEffective

RESPONSERATES

Source:2015DMAResponseRateReport

9 ©2017HarlandClarke.Allrightsreserved.

DirectMailHouseList

DirectMail

ProspectList

Phone

44%ofmarketersusethreeormorechannelsMostpopular:email|directmail|socialmedia

9– 10%

1%

3.7%

COSTPERACQUISITION MAILTYPE(ResponseRates)

$11-15

Email

DirectMail

Mobile SocialMedia

PaidSearch

InternetDisplay

$19 $16-18$16-19

$21-30

$41-50

Over-sized

Envelopes

Post-cards

Dimen-sionalMail

Catalogs

Letter-sized

Envelopes

5%4.25% 4% 3.9%

3.5%

ApplicationResponseRate

10

1,224 1,1731,274

1,362

995

1,408 1,424 1,459

1,655

1,1411,051 1,086

949

55 56 71 64 48 71 66 57 67 53 37 32 100

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16

LettersMailedvs.LoanApplicationsSubmitted

MonthMailedCount MonthResponseCount

©2017HarlandClarke.Allrightsreserved.

Source:Harland Clarke Response Report Data for Marketing Initiative

SuccessRatio

11

4.5%4.8%

5.6%

4.7% 4.8% 5.0%4.6%

3.9% 4.1%4.7%

3.5%3.0%

1.1%

0%

3%

6%

9%

12%

Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16

LettersMailedvs.LoanApplicationsSubmitted

©2017HarlandClarke.Allrightsreserved.

Source:Harland Clarke Response Report Data for Marketing Initiative

ApplicationResponseRate

12 ©2017HarlandClarke.Allrightsreserved. Source:Harland Clarke Response Report Data for Marketing Initiative

CostPerApplication

13 ©2017HarlandClarke.Allrightsreserved. Source:Harland Clarke Response Report Data for Marketing Initiative

Q&A

14

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SteveNikitasSeniorStrategyDirector

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