Banks employ some of the best cost accountants in the USA . Every major decision with respect to their sales network [ what consumers refer to as branches ] is analyzed to the Nth degree .
Households with at least one person over the age of 55 control over 66% of the savings balances in the US . The Sales Network IE Branch System exists in any bank primarily to gather deposits and not primarily to generate loans .
Today banks use more direct channels to acquire loans such as marketing directly to Realty Firms , auto dealers , home improvement firms and the like .
Yes , the number of new branch offices in this community is unlike anything you will see anywhere else . However the experts used or employed by these banks know pretty much exactly how many dollars of deposit balances are held by households in the Villages . And they know exactly what % of those dollars they need to attract to financially justify the build-out and operation of a new branch office .
New projects such as a new banking office are subject to intense analysis back at Head Quarters [ HQ] using sophisticated tried and true mathamatical computer modeling . Each bank tests the expected 5 year cumulative return of a new Branch against what is referred to as the " internal hurdle rate of return " . Usually the " Hurdle Rate " is a cumulative Return on Capital of at least 15% per annum over the first 5 years of operation .
Some institutions set much higher " Hurdle Rates " such as 20% or even as high as 25% . Nothing today is as simple as it may seem on the surface . Over the past 30+ years the major decision makers employed by even Mid-sized Banks are highly educated MBA`s with prior career experience .
Within the HQs of financial institutions there is no such thing as so called " Bankers' Hours. These people work at least 60 hour weeks and the internal competition among this highly educated and career focused work force is " dog eat dog ". One saying often proudly employed by the Managers of these MBAs that the public never sees or hears about is : " WE EAT OUR YOUNG " .
Meaning only the smartest and hardest working survive the internal culture . For these MBAs it`s " move up or move out ".
Usually the folks the public meets and deals with at the local Bank Office level are not even aware of the decision process methodology or the unique internal culture in which these usually young braniacs compete .
The same corporation but completely different cultures .
