Six ways community banks are boosting bottom lines

Banking on businesses

Kenneth Mahon, president and CEO at Dime Community Bancshares, is wasting no time trying to reinvent the New York-area thrift. The company launched a business banking division in the first quarter, bringing in $14 million in low-cost deposits. The move should also diversify Dime’s retail-centric loan portfolio.

Goodbye finance unit

Northwest Bancshares in Warren, Pa., said it will shutter Northwest Consumer Discount, its consumer finance unit, by mid-July. While the move will reduce interest income — the loans had high rates — it will also cut long-term costs, President and CEO William Wagner said. Last year, the unit had $11.6 million expenses and just $486,000 in profit.

Bold Japanese strategy

Central Pacific Financial in Honolulu struck a partnership with a group of six Japanese banks. The overseas banks will share ideas and explore business opportunities in Japan and Hawaii, said Catherine Ngo, Central Pacific’s president and CEO. Central Pacific’s international division will also introduce Hawaiian businesses to Japanese banks.

Know when to hold 'em

Associated Banc-Corp in Green Bay, Wis., is hoping to ride higher interest rates buy holding certain residential mortgages. At March 31, home loans made up about a third of the company’s $20 billion in loans. While Associated’s mortgage income fell by $375,000 from a year earlier, interest and fee income from portfolio loans jumped by $14 million.

Rethinking funding costs

Carter Bank in Martinsville, Va., is reconfiguring the liability side of its balance sheet. It allowed $488 million of interest-bearing deposits to run off in the first quarter, reducing total deposits by 12% from a year earlier. The move, paired with a $472 million reduction in the investment portfolio, should boost a net interest margin that stood at 2.24% last year.

Small investments, big upside

Live Oak Bancshares in Wilmington, N.C., quietly bought two title insurance agencies in Tampa, Fla. The company, led by Chairman and CEO Chip Mahan, expects the agencies to close about 1,000 loans this year. The company also formed Live Oak Ventures, a unit that will invest in fintech businesses with hopes of eventually incubating the projects at Live Oak.