Trustmark National Bank

Trustmark National Bank

Reducing the Efficiency Ratio

Trustmark National Bank, based in Jackson, Mississippi, was concerned about expense controls, capacity improvements and untapped revenue opportunities. Trustmark set a goal to reduce their efficiency ratio below the current 53% level. Bank management determined that a first step toward improvement was to participate in the Robert E. Nolan Company’s annual Efficiency Ratio Benchmarking Study.

Study Background

The Nolan Study is a survey of income, expense, staffing levels and productivity by line of business. The Study benchmarks the efficiency of participants against similar asset-size banking organizations. The primary value of the study is to provide directional assistance to identify, quantify and prioritize specific areas with the greatest opportunity for improvement.

Benefits of Participation

Trustmark management placed high importance on uncovering the gaps between their line-of-business performance and that of other banks, including the top-quartile performers. The Nolan Study would provide them with more than 1,000 comparative measures by line-of-business efficiency and productivity.

The Project

Trustmark was involved in merger activity during the initial data-gathering phase of the Nolan Study. To ensure they met the data submission deadline, Trustmark retained Nolan to gather and prepare their data. The gathering process in an organization of this asset size, 8 billion, would take one consultant approximately two weeks.

The first step in the process was to translate Trustmark’s financial and internal cost accounting reports to match the Study’s format. In addition, the Nolan consultant identified volumes (number and balance) for portfolio and new production and full-time employee (FTE) levels.

The Trustmark Accounting Department provided the financial, volume and FTE data to the Nolan consultant, and facilitated meetings with business-unit managers for the more detailed questions. They also clarified the operating environment that was reflected in the financial and production reports throughout the bank.

As the data was gathered and recast to fit the Study specifications, all steps were documented in detail to create an audit trail for the decisions and reallocations made. The documentation would be an important resource for answering questions to enhance understanding of the results of the study. The documentation would also serve as a road map to simplify data gathering for future Study participation.

Upon completion of the first draft of the input form, Nolan processed the data against its database of more than 70 previous-year participants. Trustmark reviewed these preliminary results, comparing their ratios with the benchmark and average results. Results that varied significantly were reviewed, data was recast as necessary and input was refined to ensure an accurate comparison.


The results of the Efficiency Ratio Benchmarking Study will vary by participant. For Trustmark, the study pinpointed:

  • Areas where productivity increases were needed to build higher capacity.
  • Expense and revenue improvements.
  • Financial reporting changes that will provide line managers with better results by line of business.