Why FI Leaders Should Think Like a Developer

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Just like the leader of a credit union or community bank, land developers always have growth in their sights and there are many strategies that a financial institution could benefit from to expand in an intelligent and financially advantageous way. Here’s how.

Let’s look at the big picture first; you know that your growth depends on increased loan and deposits, and a major factor of those numbers is your ability for new members to open new accounts. Branches are major avenues for creating and retaining new clients.

Having well-placed brick and mortar branches is a necessity by geo-locating the right branch near those targeted new members/customers, so you might as well do it in a way that benefits you the most, from varying angles, just like a savvy developer.

3 Ways to Optimize You real estate efforts

1. Develop a Multi-Tenant Plaza, Occupy and Fill

If you build it, they will come.

When you’re searching for a new prime piece of land, task one is to ensure it’s right for your organization’s needs. Beyond that, you can drive even more foot traffic into your place by making convenient shopping experiences surrounding it. Convenience is valued and appreciated ever more in our modern-day culture. Here’s how you can leverage that.

Small retail outlets, coffee shops, restaurants, an urgent care, nail or hair salon, you name it. You’re creating a place of value for the local community and your branch is included in this hotspot.

Prospect clientele may be drawn in by your new development, peruse shops, and realize that their banking needs can be met there as well. Another thing they can check off their “shopping” list.

This can enhance relationships with existing clients in this market as well. They may have more incentive to drop into your branch on their shopping or errand trips, opening up the floor for more discussion, deepening relationships. Perhaps after their coffee next door, they’ll remember about that new account they’ve been meaning to open.

If the idea of a plaza seems overwhelming, sublet just one part of your building to a boutique business like one of our clients did with a soda shop in Utah!

2. Extra Land Extra Value

Secure a parcel of land that’s larger than your immediate needs require. This doesn’t necessarily mean go all out and grab 20 acres more than you need, but this can be done with a purposeful and lean strategy. Remember, the developer is always thinking ahead, just as you are.

One LEVEL5 client benefitted greatly with this strategy by purchasing a 2 acre plot, then built their new, best-in-class branch on 1 of them. The property value of the empty acre then rose due to the modern branch’s proximity.

The grand finale? This client ended up selling the empty acre for more than what they had bought both acres for.

Now that’s a return on investment for the record books.

When considering site selection, always work with a team who has ample experience and resources in locating the right credit union or bank branch real estate for your needs.

3. Repurpose Your Existing Space & Scale Up Simultaneously

Developers understand the need for new space, but they also know the value of strategically making the most out of an existing space, too.

Use your goals as guideposts, then take due action.

Consider the example story of our client Hoosier Heartland State Bank’s branch transformation and operations center needs in Indiana. They desired to breathe new life into their main branch to better meet the needs of their modern, expanding customer base while also developing a new operations center to support an increase in employees.

This all needed to be done in a way that differentiated the bank as a leader in their community.

They partnered with LEVEL5, who knows bank construction inside and out, and thinks like a developer.

Their branch got an update with a new floor plan, diverging away from traditional teller lines, into a more open retail environment, giving staff a more effective way to interact with members and forge deeper relationships.

Their operations center now fits their long-term staffing needs, and the new exteriors reflected their forward-thinking culture.

Hoosier Bank’s President, Brad Monts added, “We chose LEVEL5 as our partner because of the value they bring to the complete design-build process. Few firms in the country can study markets, address headcount, procure real estate, design and construct facilities like their team.”

Furthermore, their HQ is part of a larger renovated complex, where they have sub-leased space to small business owners that not only benefit their employees, but also help revitalize their home town.

Contact us today for assistance locating the right land or updating an existing branch for your needs. We have experience helping partners get the most value and return from their property.

Edwards FCU Flies Ahead With New Flagship Branch

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With the project just completed, and the moving boxes being emptied, Edwards FCU are now the proud occupants of a new Flagship Branch and Headquarters Building.

So impressive is this project, the CUToday wrote an article and added some great photos, so we’ll let them do the bragging for us.

To learn more about this project, and to discuss your next branch or headquarters building, Contact Us today.

2021 Crystal Ball: Boldly Predicting the Year to Come Pt. 2

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In last week’s post, we gazed longingly into the Crystal Ball to look ahead at the year. Here, we’ll gaze into the future one last time, discussing a range of topics surely relevant to the way you conduct and run your business.

The Great Migration (Back to Work)

Just as giant herds of wildebeest seek greener pastures, your employees too will return from whence they came.

While the pandemic continues to steal headlines and as I continue to write this article, cases are as high as ever. Branches hours are changing daily, but there is light at the end of the tunnel. Whether it’s due to warmer temperatures, vaccination roll outs, or herd immunity, many believe the pandemic’s peak is upon us. The downward curve is fast approaching and health and business experts alike agree that the post-pandemic world is within reach.

Your employees, who are still working in their home offices, kitchen tables, or closets under the stairs, will have to physically return to their places of employment. It could be on a flex schedule or full-time basis. No matter what, though, they are returning and you and your organization must be prepared for them.

Aside from some bottles of sanitizer, chances are that your corporate offices are not prepared for a proper return. Do your current offices need to be renovated accordingly? Are you looking into the future for an entirely different office building? If so, we have created the “L5 HQ” program, which is meant to assess your corporate office needs.

The Cost of Things

The cost of doing business, specifically in the Design-Build world, has been greatly impacted by the pandemic. As we look ahead to 2021, there will be carryover from 2020 along the following fronts:

Labor

One of the ironic impacts from the pandemic has been the boom to the construction industry. If you have not done something to your home, the chances are, your neighbor has. Ever since the first wave of lockdowns commenced back in March, there was a massive rise in DIY projects. All of a sudden, desires arose to landscape yards, update kitchens, overhaul master baths, finish unfinished basements (guilty), and build out those home offices.

While on the surface, this all sounds residential and not commercial, an impact on labor is seen across sectors. You see, the crew doing your home project may also be the sub-contractor at the complex up the road.

Thus, we have a national labor shortage, with states like New York, Florida, California and Texas particularly feeling the pinch.

This is where planning ahead and having the right General Contractor for your branch or headquarters project really count.

The right GC has existing relationships with the local sub-contractors who pour the concrete, set the framing, and manage all the other elements that make up your building. Subs tend to allow themselves to be hired out by those they trust, and those who feed them continued work. A local General Contractor typically does not have the pull and project load compared to a national outfit.

Materials

So, if there is a labor shortage, that must mean that there are many projects abound and materials are in short supply. When supply is short, costs go up. Timber in particular has struggled to keep up with demand. While our projects continue to stay on budget, we are aware of the national timber shortage and have seen it impacting jobs across the country.

Regardless, post-pandemic prices have not dipped, but are instead rising slightly. There will likely be a leveling off by mid-summer. Projects in the construction industry have stayed steady, however.

Q&A RE M&A

I sat down with our lead consultant, John Hyche. His reputation as a thought leader in the industry has continued throughout his nearly 30-year career. John is no stranger to Mergers and Acquisitions, having been involved in heading many consulting engagements with clients over the years.

I asked John his thoughts regarding Mergers and Acquisitions and the below is a summary of his thoughts:

Mergers and Acquisitions will continue to be a trend within the industry. While the pandemic and post-pandemic world has its influence, the trends and reasonings behind the topic are consistent.

They can be broken down into 3 broad categories.

The first we’ll call “The Smaller Players.” These community based FI’s are typically operating a small handful of branches in their comfortable corner of a given market, with assets in the single digit millions to low double digits. They are surrounded by larger players, both in asset size, branch network and most importantly, efficiencies. The smaller players may ultimately find themselves at a precipice, where the cannot grow. Conversely, they may fill a niche for a local larger player, and so a M&A play commences.

The second scenario we’ll call “Merger of Equals.” This is when two like FI’s see complimentary components with one another. They may be similar, but also are seen as filling in gaps to one another. Whether it be geography (east side of town vs. west side), innovations, product offerings, customer base, etc. A merger of these “equals” is seen as a much faster growth route than doing it organically. This makes a lot of sense, but a critical component to the post-merger success is the personnel, with many organizations struggling to right-size their staff after the fact.

The third broad scenario we’ll call “The De Novo.” This is a new FI, from scratch. The advantage that a De Novo bank or credit union has is they can build whatever type of FI they want. They are not burdened by being branch first, tech first, on an old core system, or operating in the wrong trade areas. While De Novo FI’s may begin existence by filling a void in the market, ultimately, they may cause enough of a fuss for the bigger players in the market to begin to entertain an acquisition play. In fact, this may very well be the de novo strategy all along.

So there you have it, our Crystal Ball for 2021.

If you’d like to learn more, need to discuss your corporate office, or interested in our M&A Consulting Packages, Contact Us today.

6 Green Tips for Your Branch or Headquarters

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While maybe not the “green” theme you were expecting this week considering St. Patty’s Day, we thought we’d flip the script on “green” and discuss 6 different ways to think about constructing or overhauling an environmentally friendly building.

Thinking green is not just a convenient rallying cry. It’s something that you, as leaders of a retail financial institution, should care about because your customers care about it as well. While clients of every demographic will claim to want their affiliated companies to be more environmentally conscious, Millennials and Gen Z in particular are the most conscious. They actually choose companies because they support things like the environment, or “giving back”, like TOM’s, Warby Parker, etc.

So, put your green beer (yuk) down, and follow along as we discuss these Design and Build tips to make your current or next building more green.

Energy Efficient Lighting

Filed under the “you can do it now or then” category, swapping out traditional incandescent bulbs for more “green” lighting alternatives is just a smart choice. Compact Fluorescent Lighting (CFL) or Light-Emitting Diode (LED) bulbs are a great alternative. They last longer and are more energy efficient – a win-win.

ENERGY STAR HVAC

Who doesn’t go to bed every-night thinking about their HVAC and ways to make it less taxing on the planet? Well, good thing there are choices out there with an ENERGY STAR certification. When decisions come to to heating and cooling, this certification can really go a long way. With very specific metrics needing to be met for certification, ENERGY STAR HVAC systems are just simply more efficient. When paired with proper insulation methods/products, you can be more green, while saving up to 30% on your heating/cooling costs.

Environmentally Conscious Design

The approach to a green building begins in the Design phase. Lay out the asks of your Design-Build firm in advance, specifying the desire for a green building. From there, Design elements can be incorporated in advance to achieve your goal. From window placements, skylights, solar panels, geothermal systems, and even recycled building materials, there are many ways to add Design elements both inside and out for a better building.

Water Conservation

Water waste is a real thing. There are very simple measures that can be taken to lessen the overall water waste, and even ways to capture rainfall for your building’s use.

On the interior, make smart choices such as low-flow toilets and motion-sensor faucets that turn on/off automatically and do not run the risk of being turned on and left on.

For exterior landscaping, work with your Design firm to seek out trees, plants and shrubs that require less water. Drought tolerant plants are a big bonus here such as Cactus and Succulents.

And finally, consider adding industrial-sized Rain Barrels. Not only are these things pretty cool looking, but they have a tremendous benefit in capturing rainfall and storing its water for use around the property.

Eco-Friendly Materials

File the right materials under the “green” category as well. With the properly rated insulation panels, these can aid in overall operational costs by keeping the building cooler in the hot months, and warmer in the colder months.

Additionally, reflective paint can, well, reflect the baking sun, limiting the warming effect on exterior walls.

Green Roof

The final “green” idea is to add more green to your building.

While it may sound crazy, take inspiration from our Hobbit friends in Middle Earth and actually have grass on your rooftop. This “living roof” has many benefits, from an overall cooling effect to increasing a roof’s lifespan by up to 200%.

Additional rooftop ideas would be to add a planters or even a garden. Depending on the building and rooftop/terrace access, this “community garden” has a big upside on the environment. It may be a very cool crowdsourcing idea for your employees to build, tend, and benefit from what is grown.

If you’d like to learn more about ways to go Green, Contact Us today.

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