Wauwatosa Savings Bank Strategies executed:
– Maintains small number of bank branches to minimize overhead and keep certificate of deposit interest rates high.
– Slow, careful expansions into areas where new homes are being built that have ample mortgage loan customers.
In the mid-1990s, Wauwatosa Savings Bank executives crafted a strategic plan to grow the company.
"We decided to be really asset-driven," said Donald Stephens, president and chief executive officer of the firm. "We’ve grown very rapidly. It’s all been internal growth (no acquisitions)."
The company doubled its assets from about $513 million in 1995 to more than $1 billion by the end of 2001, the same year of the company’s 80th anniversary. In March, the bank reached $1 billion in deposits.
Mortgage loans comprise more than 90% of the bank’s assets.
"We’re here for the homeowner, the American dream," said John Perry, vice president of Wauwatosa Savings Bank. "Our growth was based on how we could grow our mortgage loan portfolio."
The bank offers three- and five-year adjustable rate mortgage loans, but does not offer 15- or 30-year fixed rate loans. The bank also keeps all of the loans in-house and does not sell them to other mortgage companies.
The bank has carefully added more branches in strategic locations in the Milwaukee area. In June, the bank will open a branch in Pewaukee, which will be the company’s sixth branch. The company has another Pewaukee branch, which opened in 1999, and opened branches in Oconomowoc in 2003, in Waukesha in 1986 and in Oak Creek in 1973.
The bank has offered a variety of special savings products over the years that have attracted depositors from as far away as Racine, Kenosha and West Bend, Perry said.
"Our philosophy is not to have a branch on every corner," Perry said. "Our depositors will travel a fair amount to get here."
The small number of branches keeps costs down, which helps enable the bank to keep its certificate of deposit interest rates near the top of the market, Perry said.
"We have a lower overhead," Perry said. "We don’t have 20 branches and the costs associated with running those facilities. We give very careful thought to slow and steady growth and expansion."
Despite the current low interest rates, customers are still putting money into certificates of deposit, Perry said. People still need to save money, and some are looking for safer investments than the stock market.
"The bulk of our deposits are CDs," Perry said.
The bank has placed its branches in growing areas where people are building houses and applying for mortgage loans. That’s why the bank has more branches in Waukesha County than in Milwaukee County, because most of the metropolitan area’s population growth is in the western suburbs.
"That’s where the mortgages are, where the new subdivisions are going in," Perry said.
The Oconomowoc branch, for example, was built near the Pabst Farms development, which will eventually bring thousands of new homeowners to that community.
"(The Oconomowoc branch) has already been a good location for us, deposit-wise and lending-wise," Perry said.
Wauwatosa Savings Bank has about 190 full-time employees and has added more loan officers in recent years to increase loan volume.
The company has little turnover, Perry said.
"We’ve got a lot of employees that have been here a number of years," he said. "Most of them have about 10 to 15 years or more. They’re very loyal to the bank."
The bank attracts employees with a good benefits package, including health insurance benefits that are near the top of the market, Perry said. The company is self-insured.
The company also provides a family atmosphere for employees, Perry said. Some mothers and daughters work together at the bank. In addition, the company tries to build morale by paying for events employees and their families can attend after work hours, such as Milwaukee Wave games, picnics and Christmas parties.
In addition, the company offers training and development programs for employees and helps pay tuition for those who go back to college.
In 1999, the company added a human resources department, relieving other managers of those duties.
"It’s allowed our department managers to focus on our goals and the growth in numbers we need to achieve, rather than needing to be recruiters for new staff," Perry said.
Stephens said the company is happy to maintain a 5% to 7% annual growth rate.
"We have an enormous responsibility to position our bank for success in, what is bound to be, a very challenging role for banks in the future," he said. "I am confident we are prepared to meet this challenge, in part because our organization’s structure is exactly the right composition at this time in our company’s history."
May 28, 2004 Small Business Times, Milwaukee, WI
