NewportFed chief executive Kevin McCarthy, right, and Westerly Savings Bank CEO Nino Moscardi worked together to merge their two institutions last year.
They both started in 1888, two separate institutions on opposite ends of southern Rhode Island: Newport Federal Savings Bank – recently renamed NewportFed, with about 12,000 customers, and Westerly Savings Bank, with about 3,500.
Yet despite their different size and footprints, NewportFed CEO Kevin McCarthy said, the two banks had similar business philosophies, emphasizing lending and customer service.
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“We were alike in a lot of ways,” agreed Nino Moscardi, who was CEO of Westerly Savings. “We also complemented each other in a lot of ways.”
The two CEOs began talking about a possible merger, and last October, the two institutions became one. The Westerly Savings name has gradually been eliminated, and now the Westerly and Wakefield branches also carry the name NewportFed.
A major benefit of the merger, as both men see it, is that it’s given the banks a larger market in which to sell their respective products. Westerly, for example, is “a good lending area,” McCarthy said. “The experience that the old Westerly Savings Bank had was very positive, and we were anxious to capitalize on that.”
Westerly Savings didn’t do commercial real estate lending, McCarthy noted, but “we have a broad background and experience in that area, so that’s one of the things that the Westerly market is going to see.”
NewportFed is also now offering its “Totally Free Checking” product for consumers and small businesses in Westerly Savings’ market, which McCarthy said he expects will enhance the bank’s competitiveness in that area.
According to Moscardi, who became executive vice president and COO of NewportFed, the move gives the company more leverage to move into other regions, including Massachusetts and Connecticut.
“We completed the link across the bay and have the prospect to open banks and offer services in Massachusetts and Connecticut,” Moscardi said. “From a strategic perspective, it made a lot of sense.”
The results are already starting to show. When the two institutions merged, the new bank they created had $257 million in assets and $183 million in deposits. As of March 10, NewportFed had $282 million in assets and $193 million in deposits. The growth, in turn, has given NewportFed greater lending power.
While the merger was announced in April 2005 and completed in October, NewportFed has only recently begun a marketing campaign for the new, combined institution. In coming weeks, consumers can expect to see advertising on television, newspapers and buses, McCarthy said.
The company delayed a strong public push because it wanted to look at marketing approaches, McCarthy said. “Thus far, the merger has gone fairly well as far as we’re concerned,” he said. “This marketing effort should step it up a notch or two.”
As predicted when the agreement was first announced one year ago, none of the banks’ five branches have closed. There has been some “normal attrition” in employment levels, Moscardi and McCarthy said, but the staffs of both banks have been maintained.
Despite a few bumps, Moscardi said, the future looks strong.
“You never bat a thousand in these things,” Moscardi said. “But six months down the road, we are very much an integrated institution. We are one.”
