2023 Community Bank Case Study Competition Journal

SECOND PLACE: Iowa State University

Table 1

Technology expenditures increased 149% over the 5-year period (Table 2), illustrating PSB’s commitment to keeping pace. Deposit growth is impacted by technology, and the bank appears to be investing in the technology and tools to support both loan and deposit customers. Investing in technology will help lower personnel expenditures as customers migrate to digital banking formats. Fee income generation for PSB slightly trails its peers. Halterman has explored diversification of fee revenues with insurance and trust/wealth management services, noting that he could not justify them based on scale. He described to the team inquiries he has made with peers and learned that finding and keeping proper staffing is a challenge, particularly in rural areas. Halterman

2019

2021

Average

2018

2020

2022

3.33% 3.35% 3.20% 3.23% 2.94% 3.21%

Net Interest Margin (NIM)

3.46% 3.42% 3.27% 3.10% 2.90% 3.23%

Custom Peer

Iowa Banks

3.28% 3.37% 3.15% 3.03% 2.95% 3.16%

63% 67% 59% 54% 57% 60%

Loan to Deposit (LTD)

71% 76% 65% 57% 62% 66%

Custom Peer

Iowa Banks

80% 80% 74% 67% 72% 75%

Return on Assets (ROA)

1.10% 0.87% 1.26% 1.37% 1.02% 1.12%

Custom Peer

1.12% 1.12% 1.15% 1.28% 0.97% 1.13%

Iowa Banks

1.18% 1.20% 1.12% 1.23% 1.10% 1.17%

source: UBPR

Table 2

2019

2021

Average

2018

2020

2022

$752

$885 $1,040 $1,228 $1,523 $1,086

Tech Expense $ (thousands)*

0.52% 0.49% 0.46% 0.24% 0.47% 0.44%

Fee Income % of Assets

Custom Peer

0.56% 0.60% 0.72% 0.55% 0.49% 0.58%

Iowa Banks

0.47% 0.48% 0.50% 0.51% 0.45% 0.48%

Efficiency

59% 59% 61% 59% 59% 59%

Custom Peer

64% 66% 64% 62% 65% 64%

Iowa Banks

61% 61% 61% 59% 61% 61%

*Technology expenses in 2017 used to compute the 5-year rate of growth were $612K source: UBPR

PSB CFO, Ryan Sievers, noted spending on technology is necessary to meet the increased expectations of its customer base as well as compete with large bank products and services.

further noted that many peers implementing these services have failed to meet projected growth and profitability levels. “Someone who

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