CORNERSTONE ADVISORS, INC. │ Scottsdale, Arizona │ T 480.423.2030 │ F 480.481.6076 │ www.crnrstone.com │ www.gonzobanker.com PRESS RELEASE Significant Improvement Opportunities Exist for Credit Unions, Benchmarking Study Reveals SCOTTSDALE, Ariz. /August 12, 2013/ – Heading into a hyper-competitive environment on the heels of a difficult core-earnings period, large credit unions are showing their marketplace “mettle” and have significant upside opportunities to improve, according to The Cornerstone Report: Benchmarks and Best Practices for Credit Unions, a comprehensive survey and benchmarking analysis of 62 credit unions with assets of more than $250 million. The study, conducted by management consulting firm Cornerstone Advisors, Inc., acknowledges the challenges that lay ahead for credit unions, including margin compression, heightened regulatory compliance, shifts in consumer behavior and realities of scale. Still, study authors believe much of the data collected demonstrates a significant upward trend when compared with numbers collected by Cornerstone in a similar study in 2008. In the wake of member growth brought on by the Bank Transfer Day movement and other industry developments, the median credit union in the study opened 1.8 new accounts for each one that it closed, up 20% from 2008. Yet, even with the new member focus, median products-per-household dropped 28%, to 2.52. These trends and the 2-3X gaps evident between high and low performers across many of the measures point to significant improvement potential for credit unions to support members, according to the report. In addition to extensive industry analysis, The Cornerstone Report contains hundreds of best practice recommendations in 16 key credit union areas. An important feature of the report is The Cornerstone ScorecardTM , a measurement tool that details more than 200 benchmarks broken down by 25th percentile, median and 75th percentile. “This is the sixth edition in Cornerstone’s Benchmarks and Best Practices series, which is published alternately for credit unions and mid-size banks,” stated Scott Sommer, president and chief executive officer of Cornerstone Advisors. “We have seen evidence year after year that our exclusive study results are being put to use by financial institutions striving to increase their efficiency levels and uncover improvement opportunities.” Bob McKay, executive vice president and chief operating officer at $1.8 billion Baxter Credit Union in Vernon Hills, Ill., agreed. “Baxter has found no other source of process-level data anywhere in the industry against which to compare our performance,” he said. “The Cornerstone Scorecard helps us better understand our competitive position.” The following are among key study findings:  Combined Internet and mobile log-ins have surpassed in-person teller transactions, revealing a distinct shift in member service delivery channels from brick to click.  Active mobile users at median credit unions hold nearly 7 percent of all checking accounts. The high performance level (75th percentile) was nearly 20%.  While median credit unions earned roughly $150 per year in fee income from checking accounts, there remains an $85 gap between high and low performers, illustrating significant room for improvement at the lesser performing credit unions.  Only 16% of consumer loan applications are originated through the Internet at the median credit union.  Median mortgage loans per mortgage origination full-time equivalent (FTE) per month came in at just 4.4. While this is a slight increase since 2008, it trails the high performing credit unions, which reported 6.4.  Technology spending as a function of size has decreased slightly from 2008 to .0354% of assets. The only technology spending showing any growth was Strategic Systems, which consists of specialized applications in loan origination, branch automation, analytics, document imaging, and investment management. Sommer pointed to two study findings on lending productivity and payments. “Payments account for 20% to 40% of credit union revenue and they are exploding,” he said. “Staying relevant in the payments space needs to be a strategic priority for credit unions. “With vast gaps between high and low performers in lending productivity, delivery channels and other measures, there is so much room for improvement,” noted Sommer. “If credit unions continue to gain high-value market share while scaling their efficiencies, adopting industry best practices, and reinventing their delivery, they will be financial services contenders in the years ahead.” The Cornerstone Report: Benchmarks and Best Practices for Credit Unions is available for purchase on Cornerstone’s Web site: http://www.crnrstone.com/publications.php. # # # Founded in 2002, Cornerstone Advisors, a management consulting firm focused exclusively on mid-size banks and large, progressive credit unions, provides services in the areas of: Strategic Planning, Benchmarking and Best Practices, Process Reengineering, Technology Assessment and Planning, System Selection and Conversion Management, Vendor Contract Negotiation, Risk Management, and Merger and Integration Assistance. The Cornerstone team founded industry renowned GonzoBanker (www.gonzobanker.com) and authors The Cornerstone Report, a series of authoritative benchmarking and best practices studies for both mid-size banks and credit unions. CONTACT INFORMATION: Cate Pitts Sam Kilmer Manager, Marketing and Communications Senior Director cpitts@crnrstone.com skilmer@crnrstone.com (480) 425-5203 (480) 425-5210