Strategic and Business Planning

Strategic Planning Start-up (DeNovo) Business Plans and Feasibility Studies Regulatory Assistance and Business Plans

Peer Group Data

Our Performance Measurement Outsourcing service yields significant information for our outsourcing clients. TKG developed a peer group database so our outsourcing clients could compare results to peer averages and medians in various ways. Now, community financial institutions with their own profitability system can use this data.

These reports will give your institution new insight and decision-useful information on Organizational, Line of Business, Branch, and Product Profitability at peer community bank and thrift organizations, including:

Total Bank Data - Financial statistics, balance sheet composition, and profitability ratios

Rate Analysis Data - Yields, rates, and spreads on an internal cost basis and on a market-driven basis that takes into account valuing funds on both sides of the balance sheet using matched maturity market rates.

Organizational Profitability - Income Statements for standard organizational units expressed as percentages of respective portfolio average balances. Includes matched maturity funds transfer pricing, loan loss provisions, indirect expense allocations, and more.

Product Profitability - Income Statements for standard fund-using and fund-providing product categories expressed as percentages of respective product average balances. Includes matched maturity funds transfer pricing, loan loss provisions, cost allocations, average balance per account, average cost per account, and more.

Financial Advisory

Senior managers at community financial institutions have numerous stakeholders to consider: shareholders, customers, employees, local communities, and regulators. Mergers and acquisitions (M&A) can be part of a strategy to achieve scale and benefit all stakeholders if the financial institution can operate more efficiently, offer more competitive products and services, serve a larger geographic area, and increase their capital base. On the other hand, an ill-conceived combination can ultimately erode shareholder value.

Principals of The Kafafian Group have decades of experience successfully executing M&A transactions on behalf of clients. Our experience gained at boutique and regional investment banking firms gives us unique perspectives to serve our clients’ M&A needs. In response to our clients requests for assistance we recommend only those transactions that fit a client’s strategic objectives and that will ultimately help the institution perform better and improve franchise value. We focus more on the fit of a proposed merger rather than generating a transaction. If you are contemplating a merger transaction, consider what we can offer:

Focus - Many financial advisors are focused on generating a transaction. Although we believe commitment to a transaction is important in completing it, we place emphasis on evaluating how a particular transaction will help our client perform better, and then pursue the transaction with the necessary vigor to get it done. If, through careful analysis, it’s determined that a proposed transaction will not help a client execute its strategy, our responsibility is clear. We are a consulting firm dedicated to helping our clients perform better. Generating transaction volume does not indicate if we have been successful in our endeavor. Financial performance does.

Experience - Our professionals are bankers, consultants and investment bankers. This unique blend of experience helps us analyze potential merger transactions in great depth to determine how it will impact earnings per share or book value. We consider the operational and cultural integration process and the risks associated with putting two organizations together. We explore hurdles that can distract management from achieving their strategic objectives. Merger discussions with our clients’ Board of Directors and senior managements typically go far beyond the financial issues, and our clients have appreciated our candor.

Operations Consulting

Efficiency is doing better what is already being done.
-Peter Drucker

To maintain peak efficiency, community financial institutions should periodically review operations to uncover inefficiencies that unnecessarily drain resources from other, more profitable areas.

The Kafafian Group has built its operations consulting practice by uncovering revenue opportunities as well as inefficiencies in a manner that’s sensitive to your organization’s culture. Our significant industry experience combined with the costing studies we performed at more than 100 financial institutions gives us unique expertise in evaluating an organization’s operations.

We take a common sense approach working in partnership with operational personnel to identify a unit’s objectives, review workflow, and ask pertinent questions. Together with your staff, we create more efficient processes and identify tasks that do not add value to increase a unit’s capacity or reduce the resources required to get things done.

A typical operations consulting engagement can be focused on one particular area of an institution or have a more broad-based approach where efficiencies are sought throughout the organization. You will not receive a master’s thesis or an off-the-shelf consulting document from us. At the conclusion of the process, we make specific recommendations to senior management on where to reduce costs, increase revenue, or both. We typically identify inefficiencies that cost clients far more than our fee.

Can outside assistance benefit your organization? We provide:

Peace of Mind - Operational tasks within a community financial institution are so customized it is difficult for senior managers to determine if certain areas are performing at peak efficiency. Periodically reviewing operations, using a third party that is sensitive to organizational culture and cohesiveness, can provide management the perspective necessary to make modifications that improve performance.

Unique Expertise - The majority of our staff are former bankers. We understand the sensitivities within the organization and work as partners with operations staff to find a better way to accomplish their unit’s objectives. As part of our profitability outsourcing business, we routinely interview operations staff to determine what they do, why they do it, and the resources required. This perspective gives us a tremendous pool of knowledge enabling us to make recommendations that will improve efficiency.