A Connecticut Bank Driven by the Power of Local

Over the course of the last 12 to 18 months, management has proactively positioned the bank to be slightly liability sensitive in anticipation of Fed Funds rate cuts, the first of which took place September 19 with more likely on the horizon. In particular, the bank has built a substantial portfolio of deposits that are indexed to short-term market rates. These deposits reprice weekly, which allows the bank to realize immediate benefits given declines in short-term market rates.

Furthermore, the bank continually monitors projected changes in net interest income under various interest-rate scenarios. This practice ensures that we are well prepared to navigate less probable interest-rate environments as well.

Newtown Savings Bank has a long history and a strong reputation, and over the years we have established a stable base of core deposits. We are recognized as the primary bank by many of our customers — elevated by strong customer loyalty, high satisfaction scores, and a very positive Net Promoter Score. As a key strategic initiative, we’re building on these strengths to accelerate the growth of cost-effective core deposits by expanding on existing relationships with customers and acquiring new ones.

We have developed several strategies to grow our customer base and increase core deposits. These include sales and marketing campaigns, cross sales, employee incentives, and rate-setting strategies. These efforts collectively contribute to our efforts to boost core deposit growth and liquidity.

The investment in upgraded technology has allowed us to provide a more efficient experience for our customers — both in person and digitally. In-branch transactions are faster, and customers have access to more products and tools digitally, which allows us to serve them wherever they are.

Internally, many operational efficiencies have been created through the technology upgrade. In the loan servicing area, investor reporting, residential loan sales, and real estate tax disbursements have all been streamlined, which increased future capacity. Also, real time data has created more efficient processes in payment reversals and daily loan maintenance. Additional efficiencies in our residential lending area included automated uploading of loan data to our core system. This has also allowed growth in our partnership with the external administrators of our loan origination system, fostering a collaborative environment which has created many workflow efficiencies.

FHLBank Boston offers exceptional homeownership programs that are mutually beneficial for all parties involved. These innovative programs enable member banks to assist customers in purchasing homes and, in turn, stimulate economic growth and strengthen communities.

Equity Builder Program & Housing Our Workforce: These programs have allowed us to support a diverse range of homebuyers, including first-time buyers and those with incomes below 80% HUD area median income, by providing essential financial assistance. The increased accessibility to down-payment funds has enabled more families to achieve homeownership, contributing to our community’s stability and growth.

Lift Up Homeownership: Our participation in this program has allowed us to provide targeted support to historically underserved communities, thereby improving access to homeownership. This initiative has been instrumental in addressing housing affordability challenges and fostering greater equity within the communities we serve.

The bank utilizes a few of FHLBank Boston’s products and programs, including Community Development Advances as a primary funding source. For many years, management had executed a hedging strategy whereby the bank enters into pay-fixed interest-rate swaps to convert rolling 30-day FHLBank advances into synthetic, longer-term, fixed-rate funding. The bank is also an active participant in Equity Builder, Housing Our Workforce, and Lift Up Homeownership programs, as well as the Jobs for New England program, which enables us to provide low-interest rate business loans to our customers. In the future, we anticipate using the Mortgage Partnership Finance®* Program as well.

In all of our recruiting, hiring, and promotion practices, we strive to have a diverse candidate pool that is reflective of the communities we serve. In addition, each year, our internship program focuses on sourcing and hiring a diverse class of interns and it has been successful in transitioning several into full-time positions post internship.

Our Mentorship Program is open to all employees for self-nomination to promote inclusion across the bank. We strive to pair mentors and mentees with a focus on diversity, equity, and inclusion, and place an emphasis on the onboarding training for both mentees and mentors.

We also invest in leadership and training programs like the Connecticut School of Finance and Management, Leadership Greater Danbury, and Leadership Greater Valley, which, once again, are open to all employees for self-nomination. We strive to select a diverse and equitable representation of the bank.

Our workplace culture is very inclusive and is definitely key to our efforts to foster an environment where everyone knows they have the opportunity to thrive personally and professionally.