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Echo Partners Community Bank Blog

    Not convinced about deposit profitability?

    [fa icon="clock-o"]} [fa icon="user"] Howard Lothrop [fa icon="folder-open'] deposit profitability, analytics

    Black Office Folder with Inscription Financial Solutions on Office Desktop with Office Supplies and Modern Laptop. Financial Solutions Business Concept on Blurred Background. 3D Render.Not convinced about deposit profitability?

    Try looking at your deposit costs. A client did this recently and the results were eye-opening.

    They looked at Q1 (low balances, fails to meet profit targets) and here’s what they found:

    • 53% of their accounts were in Q1.

    It’s no surprise to find 50% of accounts losing money. I often say “half of your accounts are unprofitable; you just don’t know which half.” Unfortunately this bank came in right as expected.

    • These accounts were losing $71,000 per month.

    Just think about this. That’s over $850k annually just to get to breakeven.

    • These accounts were responsible for 42% of all deposit costs.

    Having 53% of your accounts incurring 42% of your costs is not unusual. What makes it bad is these are all money losing accounts. Worse yet, they were running up 51% of the most expensive branch channel costs.

    • These 53% of accounts represented just 2% of average collected balances.

    Would you be motivated to fix this problem if you found out 2% of your balances were driving 42% of your costs?

    No bank should be in the business of providing half of their most basic services at a loss. Let deposit profitability help you fix this problem.

    Do you want to grow your bank profits with little to no risk? Click Here to  Discover How
    Howard Lothrop

    Written by Howard Lothrop

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