Overall Retail Banking Satisfaction Is Up, Mobile and ATM Satisfaction Declines

J.D. Power Reports: Gen Z Has Arrived. Is Your Bank Ready?

Overall Retail Banking Satisfaction is Up, Mobile and ATM Satisfaction Declines

WESTLAKE VILLAGE, Calif.: 30 April 2015 — Gen Z,1 which comprises about one-fourth of the U.S. population, is entering adulthood and creating new challenges and opportunities for retail banks of all sizes to acquire them as customers, build their loyalty and capture a larger share of wallet as they age; however, banks will need to understand what drives satisfaction among this generational group. Additionally, while overall satisfaction has improved from 2014, satisfaction with mobile and ATM features has slightly declined raising a red flag about retail banks’ approach to technology, according to the J.D. Power 2015 U.S. Retail Banking Satisfaction StudySM released today.

The 10th annual customer satisfaction study is the longest-running and most in-depth survey of the retail banking industry, with more than 80,000 consumers evaluating various aspects of their banking experience. The study measures satisfaction in six factors (listed in alphabetical order): account information; channel activities; facility; fees; problem resolution; and product offerings. Channel activities include six subfactors (listed in alphabetical order): ATM; branch; call center; IVR; mobile; and website. Banks are ranked based on overall customer satisfaction in each of the following regions: California, Florida, Mid-Atlantic, Midwest, New England, North Central, Northwest, South Central, Southeast, Southwest and Texas. Satisfaction is measured on a 1,000-point scale.

Gen Z and Retail Banking:

 Satisfaction among Gen Z customers (797) is higher than among Gen Y and Gen X customers (781 and 778, respectively.) Additionally, overall satisfaction among Gen Z customers of big banks2 (807) is higher than among Gen Z customers of regional banks (796) and midsize banks (769).  Among Gen Z customers, digital transactions are shifting from website to mobile. A higher percentage of Gen Z customers use mobile (38%) than the average use across all other generational groups (19%), and Gen Z uses mobile more often than other generations (48 times per year vs. 39 times).  Surprisingly, branch usage among Gen Z customers is on par with that of Gen X and Gen Y, as 76 percent of Gen Z customers have visited a branch in the past 12 months, compared with 72 percent of Gen Y customers and 74 percent of Gen X customers. Gen Z customers who visit a branch average 12 times per year, compared with Gen Y and Gen X who visit 11 times and 12 times, respectively.

1 J.D. Power defines generational groups as Pre-Boomers (born before 1946); Boomers (1946-1964); Gen X (1965-1976); Gen Y (1977-1994); Gen Z (born after 1995). 2 Big banks are defined as the six largest financial institutions based on total deposits as reported by the FDIC, averaging $180 billion and above. Regional banks are defined as those with between $180 billion and $33 billion in deposits. Midsize banks are defined as those with between $33 billion and $2 billion in deposits.

(Page 1 of 4)  Among Gen Z customers, overall satisfaction is highest with big banks, compared with regional and midsize banks, driven by satisfaction in the facility and product offering factors, and the ATM, branch, mobile and website subfactors.  Despite lower satisfaction, midsize and regional banks are capturing a greater share of Gen Z customers than they are with Gen X. Among midsize and larger banks, 18 percent of Gen Z customers indicate that their primary bank is a midsize bank, compared to 13 percent for Gen Y. More than one-fourth (28%) of Gen Z customers indicate their primary bank is regional bank, compared to 24 percent for Gen Y.  Satisfying Gen Z has a tremendous impact on advocacy. Highly satisfied Gen Z customers (satisfaction scores of 800 and higher) are five times more likely to say they “definitely will” recommend their bank than those with medium or low satisfaction (scores below 800), who say the same (68% vs. 12%, respectively).

“It is not surprising that Gen Z is satisfied with website and mobile at big banks, but they are also satisfied with the in-person experience at big banks,” said Jim Miller, senior director of banking at J.D. Power. “There is a common misconception that younger customers aren’t using the branch, but they use it about the same as Gen X and Y. Midsize and regional banks risk losing the Gen Z customers to big banks if they can’t meet their needs regarding digital and in-person interactions. There needs to be a seamless experience across all channels. The first step for retail banks is to understand what is important to Gen Z and what drives their satisfaction and loyalty.”

Overall Satisfaction Up, Mobile and ATM Satisfaction Declines

Overall satisfaction with retail banks has improved to 790, an increase of 5 points from 2014. The increase is largely due to an increase in fee satisfaction and fewer customers experiencing a problem or having a complaint. Fee satisfaction has increased by 15 points to 684 from 669, with few customers indicating a change to their fees (9%) and only 14 percent of customers indicating they paid a monthly service charge during the past 12 months. In 2015, 14 percent of customers have experienced a problem or had a complaint, down from 16 percent in 2014 and 24 percent in 2010. Among customers who do experience a problem in 2015, problem resolution satisfaction has increased to 630, up by 10 points from 2014.

Mobile satisfaction, which has increased each year since the sub-factor was included in the study in 2012, has declined by 3 points in 2015 to 837 from 840 in 2014. For big banks, this decline is largely due to a 6- point drop in mobile scores year over year (845 vs. 839, respectively), based on lower customer ratings in clarity of information and ease of navigating.

 Despite increasing functionality offered in mobile, satisfaction has dropped as fewer customers indicate that they completely understand mobile (47% vs. 57% in 2014).  Among customers who completely understand mobile, 46 percent say they “definitely will not” switch banks, compared with the 34 percent of customers who partially understand mobile who say the same.  ATM satisfaction has declined by 6 points to 837 from 843 in 2014. ATM customer usage dropped to 65 percent from 70 percent in 2014 as use of cash has declined and the role of mobile as a banking tool has increased. Although customers indicate having more ATM features in 2015 than in 2014, they are less satisfied with the range of services the ATM can perform and with ease of use of ATMs.

“Satisfaction with mobile banking and ATMs is dropping as customer expectations are outpacing technology improvements,” said Miller. “Customers expect to be able to perform more functions on the same device this year than they did last year and that it will be easier to use. Success will not be driven by just adding more bells and whistles, but by balancing functionality with ease of use and then clearly communicating features and benefits to customers.”

The study measures customer satisfaction with banks in 11 regions. Study results by region are:

California Region: Rabobank ranks highest in the California region with a score of 816 and performs particularly well in the facility and channel activities factors. Following Rabobank in the rankings are Chase (800), and Bank of the West and Union Bank in a tie (798 each).

Florida Region: Chase ranks highest in the Florida region with a score of 834, performing particularly well in the channel activities, facility and account information factors. TD Bank (830) and PNC Bank (826) follow in the rankings.

Mid-Atlantic Region: Susquehanna Bank ranks highest in the region with a score of 834 and performs particularly well in the channel activities, product offerings and account information factors. Northwest Savings Bank (821) and S&T Bank (810) follow in the rankings.

Midwest Region: First Midwest Bank ranks highest in the region with a score of 818 and performs particularly well in the product offerings, account information and channel activities factors. Following First Midwest Bank in the rankings are PNC Bank (808) and Commerce Bank (806).

New England Region: Bangor Savings Bank ranks highest in the region with a score of 844 and performs particularly well in the product offerings and fees factors. Rockland Trust Co. (840) and Eastern Bank (805) follow in the rankings.

North Central Region: With a score of 835, Huntington National Bank ranks highest in the region, performing particularly well in the product offerings and fees factors. Following in the rankings are 1st Source Bank (817) and Flagstar Bank (816).

Northwest Region: Umpqua Bank ranks highest in the region with a score of 809 and performs particularly well in the facility factor. Wells Fargo (791) and Columbia State Bank (787) follow in the rankings.

South Central Region: Arvest Bank ranks highest in the region with a score of 859, performing particularly well in the channel activities, product offerings, facility, account information, fees factors. Following in the rankings are Trustmark National Bank (844) and PNC Bank (832).

Southeast Region: United Community Bank ranks highest in the region with a score of 842 and performs particularly well in the product offerings and facility factors. Following United Community Bank in the rankings are First Citizens Bancorp (839) and First Citizens Bancshares (832).

Southwest Region: With a score of 840, Arvest Bank ranks highest in the region, performing particularly well in the product offerings, facility, account information and fees factors. FirstBank (CO) (823) and Chase (813) follow in the rankings.

Texas Region: Frost Bank ranks highest in the Texas region with a score of 862, and performs particularly well in the channel activities, product offerings, facility, account information and fees factors. Woodforest National Bank (826) and Regions Bank (820) follow in the rankings.

The 2015 U.S. Retail Banking Satisfaction Study is based on responses from more than 80,000 retail banking customers of more than 130 of the largest banks in the United States regarding their experiences with their retail bank. The study was fielded quarterly from April 2014 to February 2015:

Wave 1: April 1, 2014 – April 30, 2014 Wave 2: July 1, 2014 – August 4, 2014 Wave 3: October 1, 2014 – November 4, 2014 Wave 4: January 5, 2015 – February 2, 2015

Media Relations Contacts Jeff Perlman; Brandware Public Relations; Woodland Hills, Calif.; 818-317-3070; [email protected] John Tews; J.D. Power; Troy, Mich.; 248-680-6218; [email protected]

About J.D. Power and Advertising/Promotional Rules http://www.jdpower.com/about-us/press- release-info About McGraw Hill Financial www.mhfi.com

(Page 4 of 4) ### Note: Eleven charts follow.

J.D. Power 2015 Retail Banking Satisfaction StudySM

Retail Banking Satisfaction Index Rankings California JDPower.com Power Circle RatingsTM (on a 1,000-point scale) for consumers: Rabobank 816

Chase 800

Bank of the West 798

Union Bank 798

BBVA Compass (Compass Bank) 793

U.S. Bank 792

Wells Fargo 787

Region Average 785

California Bank & Trust 778

Citibank 775

Bank of America 767

400 600 800 1000

Power Circle Ratings Legend Among the best Better than most About average Source: J.D. Power 2015 Retail Banking Satisfaction StudySM The rest Charts and graphs extracted from this press release for use by the media must be accompanied by a statement identifying J.D. Power as the publisher and the study from which it originated as the source. Rankings are based on numerical scores, and not necessarily on statistical significance. No advertising or other promotional use can be made of the information in this release or J.D. Power survey results without the express prior written consent of J.D. Power.

J.D. Power 2015 Retail Banking Satisfaction StudySM

Retail Banking Satisfaction Index Rankings Florida JDPower.com Power Circle RatingsTM (on a 1,000-point scale) for consumers:

Chase 834

TD Bank 830

PNC Bank 826

SunTrust Bank 817

Regions Bank 811

Fifth Third Bank 810

Region Average 801

Branch Banking & Trust (BB&T) 799

Wells Fargo 798

Citibank 784

Bank of America 783

400 600 800 1000

J.D. Power 2015 Retail Banking Satisfaction StudySM

Retail Banking Satisfaction Index Rankings Mid-Atlantic JDPower.com Power Circle RatingsTM (on a 1,000-point scale) for consumers: Susquehanna Bank 834 Northwest Savings Bank 821 S&T Bank 810 Hudson City Savings Bank 807 Branch Banking & Trust (BB&T) 805 Community Bank 801 Fulton Bank 801 TD Bank 799 PNC Bank 798 Chase 796 Citizens Bank 794 Huntington National Bank 794 SunTrust Bank 793 First NB of Pennsylvania 792 First Commonwealth Bank 791 NBT Bank 791 Manufacturers & Traders (M&T) 790 National Penn Bank 790 Capital One 789 Wells Fargo 785 Region Average 785 First Niagara Bank 782 New York Community Bank 779 Apple Bank for Savings 776 Valley National Bank 776 Citibank 775 KeyBank 771 Astoria FS&LA 762 Bank of America 758 Santander Bank 752 HSBC 716 400 600 800 1000

J.D. Power 2015 Retail Banking Satisfaction StudySM

Retail Banking Satisfaction Index Rankings JDPower.com Midwest Power Circle RatingsTM (on a 1,000-point scale) for consumers: First Midwest Bank 818 PNC Bank 808 Commerce Bank 806 Chase 803 Regions Bank 802 Great Southern Bank 800 First Bank (MO) 798 AnchorBank 795 Associated Bank 794 UMB Bank 789 Bremer Bank 786 MB Financial Bank 786 U.S. Bank 785 Region Average 785 Citibank 782 Bank of the West 780 BMO Harris Bank 774 Fifth Third Bank 772 Wells Fargo 771 Bank of America 764 TCF National Bank 749

400 600 800 1000

J.D. Power 2015 Retail Banking Satisfaction StudySM

Retail Banking Satisfaction Index Rankings New England JDPower.com Power Circle RatingsTM (on a 1,000-point scale) for consumers: Bangor Savings Bank 844

Rockland Trust Co 840

Eastern Bank 805

TD Bank 800

Webster Bank 795

Wells Fargo 785

People's United Bank 783

Citizens Bank 779

Chase 774

Region Average 771

First Niagara Bank 763

Bank of America 753

Santander Bank 731

400 600 800 1000

J.D. Power 2015 Retail Banking Satisfaction StudySM

Retail Banking Satisfaction Index Rankings JDPower.com North Central Power Circle RatingsTM (on a 1,000-point scale) for consumers: Huntington National Bank 835 1st Source Bank 817 Flagstar Bank 816 First Financial Bank (OH) 814 City National Bank (WV) 812 Chase 811 Regions Bank 800 Wells Fargo 800 Branch Banking & Trust (BB&T) 799 WesBanco Bank 799 Region Average 798 Charter One 797 PNC Bank 797 Chemical Bank 794 KeyBank 790 Comerica Bank 787 Fifth Third Bank 787 TCF National Bank 781 U.S. Bank 780 FirstMerit Bank 779 Bank of America 775 Old National Bank 771 BMO Harris Bank 750 400 600 800 1000

J.D. Power 2015 Retail Banking Satisfaction StudySM

Retail Banking Satisfaction Index Rankings Northwest JDPower.com TM (on a 1,000-point scale) Power Circle Ratings for consumers:

Umpqua Bank 809

Wells Fargo 791

Columbia State Bank 787

Chase 786

KeyBank 780

U.S. Bank 779

Region Average 778

Bank of America 754

400 600 800 1000 Power Circle Ratings Legend Among the best Better than most About average Source: J.D. Power 2015 Retail Banking Satisfaction StudySM The rest Charts and graphs extracted from this press release for use by the media must be accompanied by a statement identifying J.D. Power as the publisher and the study from which it originated as the source. Rankings are based on numerical scores, and not necessarily on statistical significance. No advertising or other promotional use can be made of the information in this release or J.D. Power survey results without the express prior written consent of J.D. Power.

J.D. Power 2015 Retail Banking Satisfaction StudySM

Retail Banking Satisfaction Index Rankings JDPower.com South Central Power Circle RatingsTM (on a 1,000-point scale) for consumers: Arvest Bank 859

Trustmark National Bank 844

PNC Bank 832

First Tennessee Bank 823

SunTrust Bank 820

BancorpSouth Bank 812

Chase 812

Region Average 806

Regions Bank 805

Capital One 804

U.S. Bank 797

Wells Fargo 792

Bank of America 786

Branch Banking & Trust (BB&T) 786

Whitney Bank 786

BBVA Compass (Compass Bank) 768

400 600 800 1000

J.D. Power 2015 Retail Banking Satisfaction StudySM

Retail Banking Satisfaction Index Rankings JDPower.com Southeast Power Circle RatingsTM (on a 1,000-point scale) for consumers: United Community Bank 842

First Citizens Bancorp 839

First Citizens Bancshares 832

Branch Banking & Trust (BB&T) 819

South State Bank 819

PNC Bank 813

Synovus Bank 813

Fifth Third Bank 810

SunTrust Bank 804

Regions Bank 801

Region Average 800

TD Bank 797

Wells Fargo 797

Bank of America 788

400 600 800 1000

J.D. Power 2015 Retail Banking Satisfaction StudySM

Retail Banking Satisfaction Index Rankings JDPower.com Southwest Power Circle RatingsTM (on a 1,000-point scale) for consumers: Arvest Bank 840

FirstBank (CO) 823

Chase 813

Bank of Oklahoma 806

BancFirst 804

Wells Fargo 798

Zions First National Bank 795

Region Average 795

U.S. Bank 785

Bank of the West 777

BBVA Compass (Compass Bank) 776

Bank of America 769

Nevada State Bank 762

400 600 800 1000

J.D. Power 2015 Retail Banking Satisfaction StudySM

Retail Banking Satisfaction Index Rankings JDPower.com Texas Power Circle RatingsTM (on a 1,000-point scale) for consumers: Frost Bank 862

Woodforest National Bank 826

Regions Bank 820

Amegy Bank 812

First Financial Bank (TX) 812

Chase 811

Wells Fargo 808

Region Average 804

Prosperity Bank 797

Capital One 796

Comerica Bank 796

BBVA Compass (Compass Bank) 794

Bank of America 784

Citibank 782

International Bank of Commerce 772

400 600 800 1000