Driving home from work recently, I saw a new “For Sale” sign in the yard of a house in our neighborhood. The home is tidy and well-maintained, but it isn’t necessarily someplace that would grab your attention while driving down the road. Then I noticed a smaller placard affixed to the “For Sale” sign, which read, “I’m Gorgeous Inside!” It’s an interesting real estate marketing tactic!

But that little sign got me thinking about how banks and bankers gauge which prospects to call on. Small and medium businesses are an ever-attractive source of deposit growth for banks; they are the equivalent of the eye-catching house with loads of curb appeal.

When bankers think about small businesses in their area, the first ones to come to mind are probably a local manufacturing firm, medical or dental practices, a wholesale distributor, or some retail store. Sure, these types of businesses do offer opportunities for both deposits and loans to finance equipment or facility purchases. However, there are some “hidden gems” for deposit growth that shouldn’t be overlooked…industry sectors that could rightly have a sign hanging out front saying “Hey Bankers: I’m Gorgeous Inside!”

Industries with the highest ratio of cash to total assets

Using financial benchmark data from BizMiner, Inc., we compared “cash to total assets” for nearly 250 industries in the U.S. The top 10 industries with the highest ratio of cash to total assets are shown in the table.  As you can see, cash to total assets averaged from about 30 percent to 50 percent for these industries.

Labor Unions 50.01%
Churches & Religious Organizations 47.37%
Civic and Social Organizations 45.84%
Business & Professional Associations 44.71%
Fine Arts Schools 33.45%
Sports Training Services 32.32%
Exam Preparation and Tutoring Services 32.31%
Title Abstract and Settlement Offices 31.44%
Law Firms 31.42%
Technical and Trade Schools 30.78%


You will also notice that these are all service industries and non-profits that don’t require the investment in equipment and machinery of a manufacturing firm, hospital, or construction company. Without these capital investments, cash becomes a larger portion of their total assets. So companies with relatively small total assets can still be attractive for deposits.

The top four industries are “membership organizations” whose primary source of revenue is annual dues or donations from members. These organizations receive an influx of cash when members enroll or renew their membership, often at the beginning or end of the year. Business and professional associations may also generate revenue by staging events, such as conferences and trade shows. A major event can also result in an increase in cash balances from registration fees. And the good news is that, unlike a manufacturing company, you can actually join local business and professional associations and civic and social organizations to learn about them and build relationships.

Churches and religious organizations and civic and social organizations typically see a spike in giving in December, as members make additional charitable contributions to maximize tax deductions. They may also receive contributions designated or endowed for a specific purpose, such as mission trips or facility expansion, and these restricted funds can also create large cash balances until they are needed for the designated purpose.

Other examples of membership organizations include homeowner associations and museums. Homeowner association boards supervise the collection of close to $40 billion in annual assessments and maintain investment accounts of more than $35 billion for the long-term maintenance and replacement of commonly held property. Museums and other non-profit attractions offer membership programs to supplement entrance fees and build relationships with potential donors.

Another category with high cash to total assets is educational or training organizations. The top 10 includes fine arts schools, sports training services, exam preparation and tutoring services, and technical and trade schools, but private K-12 schools are also high on the list. These organizations experience cash influxes driven by enrollment fees and tuition payments as well.

The final two industries in the top 10 are law firms and title abstract and settlement offices. Law firms generate cash through upfront retainers required of clients. These retainers are placed in separate trust accounts for each client or in pooled trust accounts for smaller amounts. Similarly, title companies hold funds in escrow accounts prior to the closing of real estate transactions.

Hidden gems that can be banking goldmines

So, consider these and similar non-profit and service industries when looking for opportunities to grow deposits. At first glance, they may not appear as “swanky” as a manufacturer or a wholesale distributor, but based on their ratio of cash to total assets, you may just discover that when it comes to building your book of business and increasing bank deposits, these verticals are indeed “Gorgeous Inside”!


Author: Bill Walker, Cofounder & EVP Product Strategy