1. Banking Industry: Where are we headed? Evonne Gibson Pam White

2. Change in Customer Priorities Value ServiceValue Product Value ServiceValue Product Saver MentalityInvestor Mentality Saver MentalityInvestor Mentality SafetyRate & Return SafetyRate & Return

3. Change in Banking Customer Focus Traditional Traditional Service, service, service Service, service, service Current reality Current reality Customers want: Higher Rates Convenience

4. Concerns for the “Community Bank” Customers looking for rate & convenience over personalized service Customers looking for rate & convenience over personalized service Increasingly prefer remote access Increasingly prefer remote access Change in our community bank competitive advantage Change in our community bank competitive advantage Service is not a priority the same as in the past Service is not a priority the same as in the past Want knowledgeable service Want knowledgeable service Change what we are “good at” Change what we are “good at”

5. Credit Unions FOCUS ??? To become billion dollar credit union To become billion dollar credit union Increase membership Increase membership As well as continue to provide convenience/ save money for members with the lowest rates. As well as continue to provide convenience/ save money for members with the lowest rates. Overall vision is to provide Overall vision is to provide - world class service - world class service - wealth building - wealth building - controlled growth - controlled growth

6. How Do Banks Prepare? Evaluate Values and Vision Evaluate Values and Vision Change to reflect new strategy Change to reflect new strategy Communicate revised values/vision Communicate revised values/vision Position People Position People Define skills necessary in new environment Define skills necessary in new environment Prepare employees to build customer relationships through selling additional products/services Prepare employees to build customer relationships through selling additional products/services Change what employees think of “team” by changing compensation structure to support new philosophy Change what employees think of “team” by changing compensation structure to support new philosophy

7. Position workforce Position workforce Work leaner/need less people Work leaner/need less people Position ourselves Financially Position ourselves Financially Satisfy customer want for higher rates Satisfy customer want for higher rates Increase non-interest income Increase non-interest income Other Human Resources Issues Other Human Resources Issues Revise Job Descriptions Revise Job Descriptions Use Human Resources Information System (HRIS) Use Human Resources Information System (HRIS) Dealing with Leave of Absence Issues like FMLA Dealing with Leave of Absence Issues like FMLA

8. Revising our Values and Vision Value strong relationship banking Value strong relationship banking Local decision making Local decision making Banking convenience Banking convenience Exceptional service Exceptional service Lasting relationships Lasting relationships High quality customer experience High quality customer experience Responsiveness/local Responsiveness/local Accessibility (convenience) Accessibility (convenience) Communicate to every employee and potential employees how they fit individually into our organization

9. Preparing Bank Personnel Recruitment Recruitment Make sure applicants know expectations before they are hired Make sure applicants know expectations before they are hired Recruit people for customer contact positions with a proven record of selling Recruit people for customer contact positions with a proven record of selling Recruit people who are promotable who have a record of taking on increasing levels of responsibility Recruit people who are promotable who have a record of taking on increasing levels of responsibility Recruit people who seem to share values of company Recruit people who seem to share values of company Training Training Continue to train functional aspects of job Continue to train functional aspects of job Products training to prepare for sales Products training to prepare for sales Cross-train for coverage and promotion possibilities Cross-train for coverage and promotion possibilities

10. Development Development Job duties updated to reflect new strategy Job duties updated to reflect new strategy Managers meet frequently with employees Managers meet frequently with employees Discuss future potential Discuss future potential Identify deficiencies Identify deficiencies Plan to get them where they need to be Plan to get them where they need to be Create Culture of Success Create Culture of Success Recognize individual achievements at every level Recognize individual achievements at every level Accomplish by: Accomplish by: Expression of new vision by senior management Expression of new vision by senior management Management “walking the talk” relative to new culture Management “walking the talk” relative to new culture Management must reward the following of cultural elements to reinforce positive behaviors Management must reward the following of cultural elements to reinforce positive behaviors

11. Development plan for every employee Development plan for every employee Identifying deficiencies relative to individual goals/corporate goals Identifying deficiencies relative to individual goals/corporate goals Include training opportunities on the job and formal Include training opportunities on the job and formal Mentor program Mentor program Revise Compensation Structure Revise Compensation Structure Control salaries within ranges using matrix Control salaries within ranges using matrix Encourages upward movement Encourages upward movement Appropriately rewards employees for contribution Appropriately rewards employees for contribution Incentives based on meeting corporate goals first Incentives based on meeting corporate goals first Individual incentives paid only if bank meets corporate goals Individual incentives paid only if bank meets corporate goals Incentive paid at all levels Incentive paid at all levels Encourage “team” mentality Encourage “team” mentality

12. Credit Union Recruitment Hire people with ksa’s Hire people with ksa’s As stated in Semper Fi by Dan Carrison & Rod Walsh, we should never be afraid of losing prospects to other companies. As stated in Semper Fi by Dan Carrison & Rod Walsh, we should never be afraid of losing prospects to other companies. Identify individuals, what do they demonstrate? Identify individuals, what do they demonstrate? Hire people with good track records ie. Behavioral interview questions Hire people with good track records ie. Behavioral interview questions

13. Training Cross-train employees, be proactive resolve the issue before it occurs, eliminate chaos Cross-train employees, be proactive resolve the issue before it occurs, eliminate chaos Provide resources/tools to do job properly Provide resources/tools to do job properly Employees should offer convenience products to members Employees should offer convenience products to members Back office employees Back office employees

14. Development Developing employees it provides opportunities for advancement Developing employees it provides opportunities for advancement Requirement for continuing education to reflect in performance reviews Requirement for continuing education to reflect in performance reviews

15. Everyone to think like a Team Branch/individual goals Branch/individual goals Weekly sales meeting Weekly sales meeting Branch Competitions Branch Competitions

16. Position Banking Workforce Work leaner (require less staff) Work leaner (require less staff) Studies show: Studies show: Customers satisfied with longer wait time Customers satisfied with longer wait time Eliminate perception of wait based on delivery Eliminate perception of wait based on delivery We can own customer perceptions We can own customer perceptions

17. Position the Bank Financially Cut costs through staff reduction Cut costs through staff reduction Introduce products with attractive rates keeping in mind the affect on net interest income Introduce products with attractive rates keeping in mind the affect on net interest income Can adopt standard practices in banking industry to help maintain net interest income/increase non- interest income Can adopt standard practices in banking industry to help maintain net interest income/increase non- interest income Charging for Overdrafts on paperless items Charging for Overdrafts on paperless items Automated Overdraft decision making process based on criteria Automated Overdraft decision making process based on criteria Delivery channel consistency Delivery channel consistency Posting order policy changes Posting order policy changes

18. Other HR Issues Revise Job Descriptions Revise Job Descriptions Reflect priorities Reflect priorities Selling Selling Knowledgeable customer service Knowledgeable customer service Cross-training Cross-training Additional training/education requirements Additional training/education requirements HRIS HRIS Systems should: Systems should: Manage Risk Manage Risk Training Tracking Training Tracking Succession Planning Succession Planning

19. Concerns with the Credit Union How can we better serve the members? How can we better serve the members? Not enough staffing Not enough staffing A lot of request for additional branches A lot of request for additional branches HR Issues HR Issues - Advancement opportunities for backoffice - Incentive Program

20. Managing FMLA FMLA applies to employers with 50 employees or more FMLA applies to employers with 50 employees or more Employees who have worked 1250 hours in the most recent 12 months are eligible Employees who have worked 1250 hours in the most recent 12 months are eligible Provides 12 weeks of unpaid leave for Provides 12 weeks of unpaid leave for Birth, adoption, or placement of a child Birth, adoption, or placement of a child Serious health condition of the employee Serious health condition of the employee Serious health condition of spouse, child, or parent that the employee is required to care for Serious health condition of spouse, child, or parent that the employee is required to care for

21. Employees feel cared for Employees feel cared for Feel they work for a compassionate employer Feel they work for a compassionate employer Experience first hand or by observing the treatment of other employees Experience first hand or by observing the treatment of other employees Reinforces supportive environment Reinforces supportive environment Security Security Ethical obligation to employees Ethical obligation to employees Fit into bank’s strategy

22. Fit into the credit union’s strategy Treat employees fairly Treat employees fairly Not a problem to credit union, end result employees become better Not a problem to credit union, end result employees become better Help them with life obstacles/struggles Help them with life obstacles/struggles Increase cost Increase cost Reduce productivity Reduce productivity Be proactive, allow employees to be responsible Be proactive, allow employees to be responsible

23. Credit Union Balanced Scorecard External=life events, internal=education External=life events, internal=education Be able to reduce turnover/absenteeism Be able to reduce turnover/absenteeism FMLA helps people in their lives, the credit union philosophy is to “Empower Stronger Families” FMLA helps people in their lives, the credit union philosophy is to “Empower Stronger Families”

24. Managing the Shortages Floating pools of tellers and platform employees Floating pools of tellers and platform employees Employees with permanently floating schedules between branches Employees with permanently floating schedules between branches Use own staff because they have been cross- trained Use own staff because they have been cross- trained Interns Interns Temporary employees in other areas of the bank Temporary employees in other areas of the bank

25. What’s next for the Credit Union? “ Something to Smile About” 2005 theme (still continuing for 2006) “ Something to Smile About” 2005 theme (still continuing for 2006) “90 Days-no payment, 90 Days Free Gas Sweepstakes, 90 Day Cash-Back” “90 Days-no payment, 90 Days Free Gas Sweepstakes, 90 Day Cash-Back” Continuing to become billion dollar credit union. Continuing to become billion dollar credit union.

26. Questions???