Client: The Bank of Newnan

Industry: Banking

Result: Increased Net Interest Margin over 58% in 15 months.

Introduction:
The Bank of Newnan was a community bank southwest of Atlanta. In early 1996, we had total assets of $110MM and a lending portfolio of $72MM, 95% of which was real-estate based. We had a healthy net interest margin of 5.2. Since we were so heavily concentrated in real estate lending, however, we wanted to pursue more commercial lending through Asset-Based Lending and Transaction-Based Financing. We didn’t have expertise in these areas but knew we needed this expansion to be competitive in our marketplace and to reach our internal goals of increasing fee income.

Solution:
We partnered with (formerly known as Southern Asset Management). Our new partner handled all the processing and provided the eRevenue software platform to implement an Asset-Based Lending (ABL) and Transaction-Based Financing (TBF) program into the bank. By the end of 1997, 15 months after forming our partnership, we had over 70 Asset-Based Lending and Transaction-Based Financing clients with a portfolio of $7.5 Million. The ABL/TBF portfolio was driving 2/3 of the bank’s net revenue and provided an additional $6MM in SBA and other ancillary lending. Because of our attractive net interest margin, we were pursued and purchased by a large regional bank in 1998.

Summary:
Fifteen months after partnering with (formerly Southern Asset Management), our net interest margin went from 5.2 to 7.8. Additionally, our Asset-Based Lending and Transaction-Based Financing portfolio, which represented 10% of our overall bank portfolio, was driving 2/3 of our net revenue.