Farmers National Bank ($1.9 billion, Canfield, Ohio) just introduced three new deposit products with competitive rates that are helping attract new customers.
Here’s a brief description of the bank’s three new products, plus its goals for offering them:
Bonus Checking: 1.50 percent APY on the first $15,000 when the following account requirements are met: One electronic direct deposit or automatic debit; at least 10 debit card purchases; and e-statement enrollment.
Accountholders who do not meet the requirements rate earn 0.02 percent APY, and a $5 per month service charge will also occur if the daily balance falls below $100 anytime during the month.
Platinum Checking: 0.50 percent APY on balances up to $249,999, and 0.20 percent APY on balances of $250,000 or more.
A 60-Month CD: 2 percent APY ($2,500 to open and available up to $100,000).
Amber Wallace, SVP/Chief Retail and Marketing Officer, says that one of the bank’s strategic initiatives for the year is deposit growth.
“Farmers National Bank recently completed two mergers that nearly doubled the size of our community bank to 38 banking locations,” says Wallace.
“As we started to penetrate these new markets, the portfolio of deposit accounts has been a way for Farmers to introduce our products with an aggressive approach.”
The bank designed the new products to entice people to open accounts with Farmers, and to provide them with a reason to keep the accounts open and active, says Wallace.
New product goals
She says that initially, the bank’s goal for Bonus Checking was to create a sticky product that required deepening the relationship through direct deposit and e-statements.
“However, the priority for creating this product was to encourage debit card usage and transition non or minimal users to become heavier users.”
She reports that currently, about 41 percent of Bonus Checking accountholders are meeting the account requirements to earn the 1.50 percent APY.
“The actual cost of funds is only 80 basis points, due to a lesser amount of customers meeting the requirements for the premium rate.”
For its Platinum Checking account, the bank was trying to develop a creative alternative during a low-rate environment market, says Wallace. “This checking account allows customers to remain liquid while still receiving a rate reward for their deposits.”
Lastly, she says that the 2 percent 60-Month CD was created because, with a 92 percent loan-to-deposit ratio, Farmers has a need to grow deposits to fund the robust 22 percent year-over-year organic loan growth. “This rate is very competitive in the marketplace and has attracted many deposits.”
All three of the accounts were rolled out during the first quarter of this year. “They did not replace any existing accounts. However, the sales force is focusing primarily on these new offerings at account opening. They were an addition to our current offerings in the deposit account category.”
Wallace says the Bonus Checking and 60-Month CD were launched first. “The Platinum Checking was a product being offered by one of the banks with whom we recently merged. Due to the tremendous adoption of this product by those customers, we decided to offer this product bank-wide.”
She says the three products are very competitive for the bank’s marketplace. “We’ve received a strong response from our customers and acquired several new accounts—with an aggressive advertising campaign of these three products together, including multi-media channels.”
For example, the bank is using a wide variety of marketing to promote the new products, including slip sheets, lobby signs, and large posters in the branches. External media includes billboards, newsprint, business publications, and an e-mail blast to customers.
“We also worked with our IT department to have this prominently as a banner on our Website home page that linked directly to a description of all of the products. Our billboards have created buzz in the community, causing them to call in to see how they can get these rates.”
With the exception of a customer request, the bank is not transitioning existing accountholders to the new accounts, says Wallace. “We created these deposit accounts to create new funding and new customers for the bank, and we coach the sales force on the new-money strategy. We felt that the product attributes were very rich and additional incentives would not be required in the marketing roll-out plan.”
She says the bank has had two recent sales efforts focus on deposit growth. “The branches were extremely excited to not only have competitive deposit products, but to also have the best rates in the marketplace.”
Source: Amber Wallace, SVP/Chief Retail and Marketing Officer, Farmers National Bank, Canfield, OH; (Contact: Marla Pieton, AVP, Marketing Manager) phone (330)702-8071, ext. 6103; e-mail email@example.com.