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Introduction and Table of Contents

Banks Midsized Companies Use November 2008 Survey on Bank Satisfaction, Fees, and Willingness to Extend Credit. 1. Introduction and Table of Contents. Introduction

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Introduction and Table of Contents

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  1. Banks Midsized Companies UseNovember 2008 Survey on Bank Satisfaction, Fees, and Willingness to Extend Credit 1

  2. Introduction and Table of Contents • Introduction • From November 8 to November 11, 2008, the Finance Leadership Exchange (FLEx) collected information from 65 CFOs at midsized companies. We asked: • Which banks companies use • How willing those banks are to extend credit • How satisfied companies are with various types of services, and • How much companies pay for various services. • As always, FLEx members should feel free to contact Cameron Doolittle at (571) 303-6102 or cdoolittle@executiveboard.com to discuss the results in more detail. Table of Contents 3…….Top Five Banks, by Service Satisfaction 4…….Top Ten Banks, by Willingness to Lend 5…….Top Ten Banks, by Market Penetration 6…….Expected Fee Ranges 7…….Bank Profiles, for All Banks on Which Two or More CFOs Commented 23…...All Banks Mentioned The Finance Leadership Exchange has worked to ensure the accuracy of the information it provides to its members. This project relies upon data obtained from Chief Financial Officers, however, and the Finance Leadership Exchange cannot guarantee the accuracy of the information. Further, the Finance Leadership Exchange is not engaged in rendering legal, accounting or other professional services. Its projects should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither Corporate Executive Board nor its programs is responsible for any claims or losses that may arise from any errors or omissions in their reports, whether caused by Corporate Executive Board or its sources. Additionally, please note that we are sharing data with very small sample sizes. We believe that it is directionally correct, but readily acknowledge that it is far from statistically significant. Professional Services Note Finance Leadership Exchange

  3. Top Five Banks by Service FLEx CFOs rated the following banks as the leading service providers in each category. (Satisfaction scores on a scale of 1 to 5, n = 65 midsized company CFOs.)Respondents only commented on banks with whom they have relationships. Cash Management Credit Facilities Equity Issuance Other Capital Markets Debt Issuance Finance Leadership Exchange

  4. Top Ten Lending Institutions FLEx CFOs rated the following banks as most willing to extend credit.(Scale of 1 to 5, n = 65 midsized company CFOs.)Respondents only commented on banks with whom they have relationships. Willingness to Extend Credit Finance Leadership Exchange

  5. Top Ten Banks, by Penetration Banks with Whom Midsized Companies Have Relationships n = 65 midsized company CFOs. Finance Leadership Exchange

  6. Fee Ranges Because companies strike a wide array of deals with their banks,apples-to-apples comparisons are challenging. But, to ensure thatwe arm you, our members, with the best available information, hereare the anecdotal points we have heard from you about fees. Credit Facilities: Facility Fee (Undrawn) Companies report paying, on average, a 26 basis-point facility fee. Banks at the low end of the facility fee range charge 10 to 15 basis points. The banks that are reportedly charging these amounts are: BMO, CIT, Commerce Bank, Wachovia, and Wells Fargo. Banks at the high end of the facility fee range charge 30 to 50 basis points. The banks that are reportedly charging these amounts are: Bank of America, Citizens, Key Bank, SunTrust, and Sumitomo. Credit Facilities: Drawn Credit Companies report paying, on average, a 128 basis-point spread over LIBOR on used credit. Banks at the low end of the drawn credit range charge 50 to 100 basis points. The banks that are reportedly charging these amounts are: BMO and PNC. Banks at the high end of the drawn credit range charge 150 to 200 basis points. The banks that are reportedly charging these amounts are: Capital One, Citizens, JPMorgan Chase, Key Bank, US Bank. Cash Management Most companies report paying on a per-transaction basis. Where there is a volume-based “management fee,” it was uniformly at 5 basis points. Transaction-based example: “We pay $500k per year on $400m of cash flow.” Flat-fee examples: “We pay $8k per month.” “60 K Annual.” Debt Issuance Data was spotty here, but the range ran from 12.5 basis points to 50 basis points to do a debt offering. Finance Leadership Exchange

  7. Background Information Bank of America is one of the largest banks in the US by assets. It has an extensive branch network, with more than 6,100 locations covering more than 30 US states. Its core services include consumer and small business banking, credit cards, and asset management. Bank of America Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback “We have been looking at [alternatives] due to our service issues with BOA.” “Fees are obscene. We pay about $8k a month for cash management and $3k a month for DDA, sweeping, clearing, p card and banamex.” “We have been very happy with the switch from BOA.” n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  8. Background Information Bank of Montreal is one of Canada’s oldest and biggest Banks. Its offerings include deposits, mortgages and loans, life insurance, credit cards, investments, and wealth management services. Bank of Montreal (BMO) Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback “[BMO is] being replaced this week for failure to provide additional credit/debt. However, long-term relationship since 1999 has been very positive.” n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  9. Background Information Capital One is one of the top credit card issuers in the US offering a variety of rates, credit limits, finance charges, and fees.It has 50 million customer accounts. It also provides auto financing, credit insurance, and other consumer lending products. Moreover it offers asset management, Client advisory services and Institutional Client Services. Capital One* Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback “We pay 50 basis points on our unused line of credit with Capital One.” * Only 2 CFOs report using this bank. Nonetheless, we would rather give you the information we do have rather than provide no data. n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  10. Background Information Citigroup is one of the largest financial services firms in the world. With more than $1 trillion in assets. It offers deposits and loans, investment banking, brokerage, wealth management, alternative investments, and other financial services. Citigroup Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback One member noted paying a “nominal” fee for cash management services from Citi. n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  11. Background Information Citizens National Bank is a brand name of RBS Citizens and Citizens Bank of Pennsylvania. Apart from retail banking, it also offers commercial loans, trust services, and other financial services and products. Thing to note here is that real estate loans account for about 80% of the bank's lending portfolio. Citizens Bank Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback “[Citizens Bank charges us] L + 150, unused .375%.” “I am generally satisfied with their pricing.” n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  12. Background Information HSBC is a subsidiary of British Banking giant HSBC Holdings. It offers personal, commercial, and mortgage banking services. Its loan portfolio is dominated by residential mortgages. It also offers commercial loans and credit card loans. Moreover, it provides investment banking and private banking services. HSBC* Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback “We are very satisfied with them. They are business oriented, supportive of our efforts and the sectors we operate in.” * Only 2 CFOs report using this bank. Nonetheless, we would rather give you the information we do have rather than provide no data. n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  13. Background Information JPMorgan Chase is one of the largest financial services firms in the world. Apart from retail banking, it is amongst the top US mortgage lenders, automobile loan writers, and credit card issuers. It also boasts of formidable investment banking and asset management operations. JPMorgan Chase Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback “Competitively priced. Credit at 12.5 basis points.” n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  14. Background Information Key Bank is a subsidiary of financial services giant Keycorp. Its national banking division provides real estate capital, equipment financing, and capital market services to corporate clients. Key Bank Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback “Key Bank is our lead bank in a credit facility with Wells Fargo.” “I pay 30 bps for unused.” “[On used credit], I pay 150 basis points over libor.” n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  15. Background Information M&T Bank offers deposit accounts and loans to both individuals and mid-sized businesses. Its subsidiaries provide brokerage, leasing, loan servicing, and other services .It also owns an insurance agency, a mortgage reinsurance firm, an auto loan trading company, and other businesses. M&T Bank* Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback FLEx received no qualitative comments on M&T. * Only 2 CFOs report using this bank. Nonetheless, we would rather give you the information we do have rather than provide no data. n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  16. Background Information PNC Bank offers both consumer and corporate services. In addition to its renewed focus on retail banking, the company offers wealth management, insurance, and other services. It is one of the first banks to take advantage of the US Treasury's $250 billion plan to bolster the financial services industry. PNC Bank Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback “We have been extremely happy with PNC and have actually used their Blackrock investment arm to invest our excess cash. They also are very responsive to mid market companies like ourselves and go the extra mile to win and service accounts.” “In the US, we use PNC bank disbursements and lock boxes and pay with compensating balances. We rate them high for quality of service, responsiveness to our questions and handling our changing needs.” n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  17. Background Information Sillicon Valley Bank provides customized financing to entrepreneurs, executives, and investors. It also offers deposits, loans, and international banking services. It connects private investors to young firms. Through its subsidiaries, it provides investment advisory, brokerage, and asset management services. Silicon Valley Bank Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback “We pay prime rate on credit facilities.” “I’m unsatisfied with their cash management pricing.” n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  18. Background Information SunTrust Bank offers retail and commercial banking, trust services, credit cards, and mortgage banking. Its offerings also include mutual funds, insurance, lease financing, asset management, and securities underwriting and dealing. SunTrust bought Atlanta-area bank holding company GB&T Bancshares in 2008. SunTrust Bank Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback “We are in the midst of changing treasury management banks from SunTrust to JPMorgan. We were fairly happy with SunTrust’s TM services, but they exited our credit facilities so we had to make a change.” n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  19. Background Information UBS is one of the largest investment managers in the world. It serves institutional investors and high-net-worth individuals by offering mutual funds, asset management, corporate finance, and estate planning. Its investment banking includes securities underwriting, mergers and acquisitions advice, fixed-income products, and foreign exchange. UBS* Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback FLEx did not receive any qualitative feedback on UBS. * Only 2 CFOs report using this bank. Nonetheless, we would rather give you the information we do have rather than provide no data. n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  20. Background Information United Missouri Bank(UMB) and its subsidiaries offer insurance, brokerage services, leasing, treasury management, health savings accounts, and proprietary mutual funds. UMB fund Services performs accounting and administration functions for mutual fund and alternative investment managers. United Missouri Bank* Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback “[We pay for cash management services based on] Actual Cost Per Item – Not Based on Fees.” * Only 2 CFOs report using this bank. Nonetheless, we would rather give you the information we do have rather than provide no data. n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  21. Background Information Wachovia bank is one of the biggest in the US, with over 3,400 branches. Recently, Wachovia is merging with Wells Fargo, which has raised 12.6 billion dollars for the acquisition. Wachovia Bank Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback “We are actively looking to replace them. It is not because of deterioration in their services but because of our lack of confidence in them.” “They will become our primary bank.” n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  22. Background Information Wells Fargo is one of the top banks in the US. Its services include consumer and business banking, investment management, insurance, and venture capital investment. It is also a top residential mortgage lender in the US. Wells Fargo Bank Willingness to Extend Credit (Out of 5) Service Satisfaction (Out of 5) Market Share (% of Respondents) FLEx Member Feedback “[Wells Fargo handles] our operating accounts, cash management and foreign currency hedge contacts. We have been very happy with the switch from BOA to Wells.” n = 65 midsized company CFOs Source: Finance Leadership Exchange research, www.Hoovers.com Finance Leadership Exchange

  23. List of All Banks Mentioned Below is a list of all banks mentioned by middle market CFOs participating in this study. To learn more about other FLEx members’ experiences with these banks, please contact:Cameron Doolittle, cdoolittle@executiveboard.com, (571) 303-6102 JP Morgan Key Bank Lloyds M&T Mizuho Bank National City Northern Trust PNC Security Bank Silicon Valley Sumitomo Mitsui Banking Corporation SunTrust UBS Union Bank of California United Missouri Bank US Bank Wachovia Wells Fargo Finance Leadership Exchange

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