selkirk partners...nov 27, 2017 · selkirk partners real estate discovery conversation –...

SELKIRK PARTNERS

PREPARED AND PRESENTED BY

KEVIN MCSHEAMIKE O’MALLEY

NOVEMBER 28, 2017

REAL ESTATE DISCOVERY CONVERSATION

SELKIRK PARTNERS REAL ESTATE DISCOVERY CONVERSATION – NOVEMBER 28, 2017 2

FOR DISCUSSIONI. Introductions

II. You’ve Been Busy

III. The Playing Field

IV. State of the Union

V. RE&F Delivers

VI. Points of Pain

VII. Looking Forward


PLEASED TO MEET YOU

Kevin [email protected]

30+ Years

Microsoft, AIG, Wells Fargo, Sandy Spring Bank, Comcast

CBRE, Staubach, Studley

Local, National

Mike O’Malley, [email protected]

35+ Years

Bank of America, Verizon, Merrill Lynch, Prudential, GlaxoSmithKline

Hewlett Packard, Cushman & Wakefield, USAA

Local, National, Global

Tom Cestare

Executive Vice PresidentChief Financial Officer

Martin Gallagher

Executive Vice PresidentChief Lending Officer

mailto:[email protected]

mailto:[email protected]


YOU’VE BEEN BUSY Acquisition of Conestoga Bank (+$588.4 M Deposits)

Acquisition of St. Edmond’s Federal Savings Bank

Oldest and largest Philadelphia-based Bank

#6 deposit share in Philadelphia

Rationalized portfolio with appropriate sales and closings to optimize performance

Top Workplaces for ‘15, ’16, and ‘17 by Philly.com

How can your existing or future real estate holdings better contribute to the growth of the deposit base, shareholder value and employee satisfaction?


PLAYING FIELD 63 Branches:

40 Pennsylvania, 23 New Jersey (1)

Total Deposit Base: $ 4.17 Billion(as of September 30, 2017)

(1) FDIC 6/30/17 Reporting

# Locations SizeOffice vs

Retail vs SupportVoids Duplications Deposit Base Trend

63 XX XX XX XX

How do you evaluate your current branch network and that of potential acquisition candidates? Is it an ongoing process?


STATE OF THE UNIONSenior Management Initiatives

Left Side Right Side

Increasing profitability

Employing a shareholder-focused management of capital

Expanding our franchise in or adjacent to our market area

Enhancing earnings by increasing core deposits and emphasizing operational efficiencies

Maintaining asset quality

Differentiate Beneficial Bank as a community bank that educates its customers to “do the right thing”

Differentiate legacy and history:“True to Our Name since 1853”

Provide customers with right knowledge and guidance

What are your top three real estate initiatives for the next year?


STATE OF THE UNIONThe New Millennial Challenge

Millennials are the largest population segment and getting larger (1)2011: 76M Boomers By 2030: 56M Boomers

79M Millennials 78M Millennials

A 2014 FICO survey indicates that:

68% of Millennials have a national bank for their primary bank

Millennials are 5 times more likely than those over 50 to close their accounts with their primary bank when not satisfied

Millennials require multiple channels and devices to maintain and expand their banking relationship

(1) US Census Bureau 2012

Millennials leave their bank due to:

• Perceived High Fees

• Negative experience with bank representative

• Too few or inconveniently located ATMs / branchesAre you able to measure the impact of millennials becoming

Beneficial customers?


STATE OF THE UNIONMarketing and your Customers

Wherever and Whenever

The physical branch as an important touchpoint along the Customer Journey

Branch as a vehicle to Loyal Relationshipsand Emotional Connection

A bridge to take you where you want to go

Get beyond the desks and engage visitors

SOURCE: Gensler, Retail Banking Qualifications, 2017Nelson, Branching is not Dead!, July 2017

How have customers responded to the “campus” branch format?


STATE OF THE UNIONThe Experts

A MIXED MESSAGE

“H1 2017 860+ brick and mortar closings”

“Consumers of all ages prefer digital channels to the branch” (< 27% for all age groups)

“44% of all consumers prefer to do their daily transactions at a traditional branch with tellers.”

“Branch size is increasing 8% on average across the U.S.” (increase – West/NW, decrease – South/Midwest)

“Average size of branch in 2006 was 3,500 sf. Average size of branch in 2013 was 3,000 sf.Average size of branch in 2016 was 2,700 sf.”

“There is no one answer.”


ADD TO THE MIX Diverse customer behaviors

Multiple Sales Channels

Regulatory Issues

Competition

Customer Experience (CX) vs. Bottom-Line


REAL ESTATE & FACILITIES - SOLUTIONS: Assure a positive Customer Experience

Balance value with cost

Contribute to growth and competitive positioning

Provide for network optimization

Position real estate assets for flexibility in Use, Configuration, Term and Exit Strategies

Address new FASB Accounting Standards

Promote brand and increase loyalty with facilities and services that are conveniently located and provide support to customers’ diverse and changing needs


PORTFOLIO METRICS"You can't manage what you don't measure"

Owned• Cost Basis / Remaining Book Value/ Market Value• Depreciation Stream• Operating Expenses• Real Estate Taxes

Leased• Financial Obligations

• Total • by Month• by Sq Ft• Dates• Expiry• Notice• SSR "Action by"

• Other

Reporting• Asset• Expense Management• Capital Budget (Commit Cash Flow) • Activity• Deposit Trends by Branch

Management Metrics• Occupancy cost per

• Sq Ft• Revenue• Deposits• Headcount• SG&A Total

LIRA

How do you measure the performance and success of your real estate holdings?


Strategic Consulting WorkplaceTransaction

Management ?

REAL ESTATE & FACILITIES – SYSTEMS INTEGRATOR

Project ManagementFacilities

ManagementLease Administration ?

How are these services being delivered?


LOOKING FORWARD

We’re here to help.


WHY SELKIRK? We listen, learn, and deliver

Significant Principal experience (Corporate Real Estate Management and Service Provider)

Deep portfolio-based account experience

Strong financial services resume

Principal attention for every transaction, large or small

Committed to our responsibility as fiduciary for our Clients

Extremely adept at providing service integration among many disciplines and multiple service providers

Experience and footprint similar to Beneficial Savings Bank

Driven by Strategy; Committed to Service


DON’T JUST TAKE OUR WORD FOR IT“Your knowledge of each market and your presentation of our options were always comprehensive, concise and definitive. You were able to satisfactorily build the leverage needed for below-market renewal terms. And by the way, you met or surpassed all of Microsoft’s bottom-line oriented goals.”

– Frank White, Real Estate Manager

“Throughout the assignment he demonstrated patience, enthusiasm, creativity, and tenacity… impressed with his professionalism… strong strategist with an incredible penchant for providing uncompromised service to his client. If you are looking for a dedicated, highly qualified real estate partner Kevin should be on your list!”

– Wayne Christmann, Vice President, Global Facilities

“Many thanks for your hard work on this transaction and the very professional way you conducted business with Wachovia. I certainly will look for opportunities to work with you again...”

– Steve Higbee, Vice President, Corporate Real Estate

“Comcast tends to change the scope of a project often and Kevin’s resilience is amazing. No matter what kind of change we threw at him, he continued to produce stellar results. I couldn’t ask for a better representation of exemplary service.”

– Dan Edwards, Vice President


THANK YOU

Gracias. 謝謝. Obrigado. .اركش Спасибо. ขอบคุณ. Dankie. ありがとう. Merci.

selkirk partners...nov 27, 2017 · selkirk partners real estate discovery conversation –...

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