A traditional savings bank engaged A.G. Newcomb to assist the bank in exploring strategic opportunities that would transform the bank’s ability to create sustainable, profitable growth over the long term. This 100+ year old thrift focused primarily on originating and holding 30-year fixed rate mortgages (93% of loans) funded by CDs and savings deposits. The bank’s profitability had diminished significantly due to compression of its net interest margin and lack of noninterest income. The new CEO and Board agreed a transformation of the bank’s business model to a commercial bank was needed but was not clear about the bank’s future competitive strategy and the infrastructure necessary to support a changed business model.

Insights and Solutions

Working alongside management and the Board, A. G. Newcomb first strategically assessed the current state of the bank and environment. In this assessment, we worked together to understand the bank’s strengths or areas of excellence and how best to leverage them; candidly identified weaknesses or vulnerabilities that might impede the bank from realizing its potential; and fully assessed the current economic, competitive and industry environment. We identified, evaluated and discussed strategic opportunities to create operating revenue and enhance profitability.

Given the results of the strategic assessment, A. G. Newcomb facilitated open, frank discussion in which the Board and management agreed on the future competitive strategy of the bank which was diversification of its lending focus to include commercial loans and its deposit generation to include transaction / checking accounts. This evolution to a commercial-like bank would require a complete transformation of the bank’s infrastructure—people, culture, processes, technology, risk management, etc. A.G. Newcomb assisted the bank in identifying and prioritizing the strategies necessary for the bank to transition in order to realize its strategic vision. A strategic roadmap was developed with senior management in which strategies were identified, prioritized and ownership assigned and a strategic scorecard of goals / key performance indicators developed to measure progress in achieving the bank’s strategic vision. A five-year forecast of financial performance was developed revealing that with focus, discipline and precision, the bank could transform its balance sheet and enhance earnings while maintaining adequate capital.


A.G. Newcomb continues to work with the bank in pursuing its strategic vision of becoming a high-performing commercial community bank. In the last five years the bank’s net interest margin has improved 130 basis points when most banks net interest margin has declined. Commercial loans now comprise 40% of loans and demand deposits which represented 0.3% of total deposits now make up 13% of deposits. The bank has diligently kept their strategic vision and roadmap alive reviewing progress quarterly and evaluating their plan each year in an offsite retreat.