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Capital City Bank Case Study

Professional Vendor Contract Review Provides Bank with the Right Services at the Right Prices

Established in 1892 as the Neese Brothers Bank, $435 million Capital City Bank is headquartered in Topeka, KS, with 10 full-service locations in Topeka and nearby cities of Lawrence and Overland Park. Capital City is focused on serving individuals and small to mid-sized businesses, placing emphasis on customer service and keeping pace with advances in technology.

Focus on continuous improvement leads to contract review

As part of its on-going efforts to improve the banking experience for its customers, remain competitive in the market and keep its expenses in check, Capital City management decided it was time to undergo a review of its service contracts.

“While we had good relationships with our vendors, we had no way to measure the current rates and terms of our contracts against what was available in the marketplace,” said Capital City CEO Bob Kobbeman. “We wanted to make sure we were getting the right fit at the right pricing.”

Maintaining long-term business relationship results in substantial savings and added benefits

As a long-time JMFA client, Kobbeman did not hesitate to contact his company representative to discuss the bank’s contract review needs. "The number one reason I felt comfortable contacting JMFA was the success we have had with their other services,” he explained. “We have offered their overdraft product – JMFA OVERDRAFT PRIVILEGE® – for 15 years and have worked with the company’s consultants on other profit and performance enhancement opportunities."

According to Kobbeman, the bank had JMFA review a variety of service contracts, including its data processing agreement. As a result, Capital City was able to save $120,000 per year over a five-year term for data processing services, and achieve smaller savings on other contracts. The bank was also able to add new products based on expert pricing knowledge and guidance on bundling services. "This enabled us to get better pricing on additional tools that we could use internally to support our data processing efforts, as well as some new services that would benefit our customers," he said.

In addition to JMFA’s review and renegotiations expertise, Kobbeman explained that the company’s intelligence database was a tremendous resource for the bank. "Many service contracts are complex and require a great deal of time to review line-by-line. After working through this process with JMFA’s professional consultants, our staff learned a great deal about what to look for in contract language and terms, as well as how to couple services for more attractive pricing."

He continued, "JMFA’s involvement greatly leveled the negotiations playing field and made the process totally painless for everyone. We came away with a new awareness that we have been able to carry over to other contract reviews."

For best results, start process early with contract expertise on your side

Kobbeman recommends that banks take the time to review vendor contract terms well in advance of the renewal date, in order get a better understanding of the scope of services they should be getting. He credits JMFA’s organized methodology and industry knowledge for providing a good payoff in terms of savings for the bank. "Plus, thanks to JMFA’s contingency based fee, we weren’t out any money for the review and renegotiating process."

About JMFA

JMFA is a leading provider of profitability and performance-improvement consulting. For more than 35 years, JMFA has been recognized as one of the most trusted names in the industry, helping financial institutions reach their goals. JMFA is recognized for earnings enhancement and expense control programs, executive placement, as well as product, service, pricing and technology-improvement consulting. Simply stated, JMFA’s programs and services are designed to increase income or reduce expenses. JMFA is proud to be a preferred provider for performance-enhancement consulting services among many industry groups.

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