Larger businesses, however, have moved away in droves from top-20 and mid-sized regional providers and towards community banks

CALABASAS, CALIFORNIA (August 26, 2003) -A new study of 2,000 micro and business market companies indicates that top-20 banks (those with assets of $50 billion or more) have increased their share of micro market relationships by 6%, while state and regional banks (those with assets of $2 billion to 49.9 billion) have lost 6% of their share of the micro market. During the same time period, banks with $10 billion or more in assets lost 6% of all business market relationships, while mid-sized community banks (those with between $100 million and $1.9 billion in assets) increased their share by 7%. In this study, micro market companies are defined as businesses with annual revenue between $50,000 and $999,999, while business market companies are defined as those with annual revenue between $1,000,000 and $19,999,999.

“Since 2002, top-20 banks have attracted large numbers of micro market customers, with a combination of prolific branch networks and convenience,” said Mike Marselli, manager of the Informa Research Services study. “Micro market customers have relatively simple needs - a checking account, the means to make and receive electronic payments, and perhaps a line of credit. The combination of convenient branch locations and a wide array of products available that meet their needs have served to draw a host of new customers into top-20 bank portfolios. Mid-sized regional banks, while offering similar products to the micro market, lack the broad branch network to compete effectively, and offer no differentiation in terms of service.”

“Larger companies in the $1MM-$19.9MM business market, however, require a wider array of products, and relationship management becomes a much more powerful factor that influences provider selection,” continued Marselli. “More community banks now offer sophisticated business services, and their edge on the service-side of the relationship has been the key to drawing the business market customer away from the relative anonymity they may feel at a top-20 bank.”

The study found that top-20 banks increased their portfolio of micro market customers where they are the lead bank (the bank that holds the majority of business deposits) by 6%, growing from 26% in 2002 to 32% in 2003. This translates to a 23% annualized growth rate. The study also shows that mid-sized community banks increased their share of business market relationships by 7%, growing from 19% in 2002 to 26% in 2003, or a 37% annualized growth rate.

“The bottom line is that micro market companies want basic products and flexible options on the service side of the relationship,” said Marselli. “Top-20 banks offer just that. On the other hand, larger businesses expect more personalized service, and a knowledgeable key contact at a community bank can fill that roll admirably, and counterbalance the superior branch network of a top institution.”

Mike Marselli, a certified cash manager and business analyst, has over 13 years experience in the financial services industry, serving with Dun & Bradstreet Information Services and PSI Global prior to joining Informa Research Service. His background includes experience in business-to-business market strategies, industry trend forecasting, e-commerce trend analysis, and primary market research.

The business market research study, performed by Informa Research Services, includes nearly 1,000 interviews with micro market companies and nearly 1,000 interviews with business market companies. These interviews included nearly 1,200 personal interviews with business owners. The study was conducted between February and July 2003, and consisted of telephone-based interviews with micro and business market companies throughout the US. The study has a +/- 3% margin of error at the 95% confidence level.

About Informa Research Services, Inc.

Founded in 1983 and headquartered in Calabasas, CA, Informa Research Services, Inc., provides the financial industry's most extensive array of market research and decision-support information.

Conducting daily surveys of the retail and business products offered by more than 10,000 financial organizations nationwide, Informa Research Services, Inc., currently supports the product pricing decisions of more than 2,500 clients, representing all 50 states and including the top 25 financial institutions. This electronically transmitted competitive pricing intelligence effectively generates profitable responses to continual market changes, enables clients to effectively position deposit and loan products within local markets, maximizes interest income, and manages interest expense. Informa is the premier provider of fee and feature studies used to determine the competitiveness of fee-based services. In-depth studies are also available on cash management services, trust products, mystery shops, and other specialized services.

Informa Research Services, Inc., is a division of London-based Informa Group plc (LONDON:INF). Collectively, the business units of Informa Group plc sell to more than 121,000 delegates and 80,000 subscribers, generating annual revenues of over $283 million.