RPM Consulting, LLCBalance Distribution Report

The Balance Distribution Report depicts what proportion of households is responsible for what proportion of the dollars at each balance tier. This report helps institutions to "zero in" on the relatively small proportion of households that drive, in the case of the sample report below, total loan balances for all Loan primary types (or "P-Types"). Just as importantly, it also identifies what is usually a relatively large proportion of households who have very low balances. This latter analytical technique is most helpful when analyzing products like Checking accounts, where costs incurred in processing, statementing, ATM, etc. make low balances a real issue.

The credit union depicted in the report below is healthier than many, but still has issues to address. 6,275 of the 22,996 Loan households (over 27% of the Loan household base) have $500 or less in combined loans and represent only $627 thousand of a nearly $143 million portfolio. Chances are that further analysis of these households will reveal that a good many are marginal in other ways, and they could eventually be repriced in such a way as to at least recover the costs they incur.

Conversely, the households in the balance tiers above $5,000 drive loan balances at this credit union, with a critical mass of households at the $5,000 to $15,000 level and a critical mass of dollars at the $15,000+ levels. These are the households whose loyalty is critical to the credit union's survival. By identifying a profile of these households, we can prospect elsewhere in the household base and determine which are prospects for increased business, and which are the subsidized households.

Customer Insight MCIF Balance Distribution Report