SWOT - Banner Bank
Banner Bank has a positive outlook on the community even though having fewer branches compared to its competitors. The bank recently merged with Alta Pacific banking company which gave them an opportunity to increase their presence in Northern California.
- The community has a positive outlook on Banner Bank. This is because the bank is very active in the social affairs, for example, it has donated nearly $2.5 million to over 2,000 community organizations and its employees have spent over 20,000 hours of community service helping the society.
- The company total assets grew/increased from $10.38 billion to $11.85 billion within a year, from June 2018 to June 2019.
- The rate at which the Banner Bank customers are depositing money in their respective accounts has increased by 7% over the past 12 months. This shows the bank is providing the best business environment for its clients.
- The cost of their shares also increased from $38.67 in 2018 to $43.99 in 2019.
- When compared against their competitors, Banner Bank savings account offer little interest return, which may turn away potential customers.
- Banner Bank competitors offer more financial services options compared to it. Banner Bank offers; auto loans, commercial banks, a holding company, and mortgages, while its competitors offer options such as financial services investment, brokerage, and financial management.
- Banner Bank accounts have high monthly maintenance fees and few perks when compared to its competitors.
- Also, the bank has limited locations; it has only 200+ branches. Additionally, their ATM flow is restricted, hence, turning away customers to their competitors and limiting the number of customers they can reach.
- Banner Bank is taking an opportunity to dissolve their competitors through absorption in an attempt to dilute the banking market in the state of California.
- One bank they are absorbing in Northern California is the Alta Pacific Bancorp headquartered in Santa Rosa, California.
- This merger will increase the company presence in California as well as increase its portfolio from small to medium-sized business transactions in the state.
- Alta Pacific Bancorp has total assets of $436 million, which when combined with Banner Bank company holdings, the total assets value will increase to approximately $12.2 billion.
- The threats on a Banner Bank in California include biological factors such as adverse weather in the area, for example, fires and earthquakes that have plagued California are among the major factors causing a threat to the bank stability.
- Additionally, the periodic droughts in California have affected the agricultural business market which makes up approximately $404.9 million, or 5% of their loan portfolio.
- The over-saturation of the banking market in San Diego and Sacramento in particular, as well as the other areas of California, is showing that the company is at the risk of limited financial stability.
Other threats specific to the California Banner Banking market when compared to their other branches include:
- A high rate of loan delinquencies as well as an increase of foreclosures.
- An increase in their loan loss allowances.
- The real estates used as collateral for loans are steadily declining in value.
- Loss of the net worth of loan guarantors is seen more often in California which impacts their ability to pay back the loans.
- In 2018, Banner bank had $7.71 billion in outstanding high-risk loans compared to $6.75 billion in 2017.