Implementing a Profitable Growth Strategy for Today and Tomorrow

Bank growth shouldn’t be measured by asset size alone. As institutions expand, whether organically, through acquisition or by deepening market presence, the real question becomes: Is our growth profitable, sustainable and aligned with who we are as a bank? Today’s environment requires more than adding depth to the balance sheet. It requires a clear strategy, intentional investment and the ability to adapt quickly to economic changes.

In this blog post, PRI Head of Client Engagement Brett Rawls previews themes from an upcoming Bank Director’s Acquire or Be Acquired (AOBA) Conference session on growth strategy implementation. The AOBA Conference hosts financial leaders from community and regional financial institutions around the country who share how they balance growth with culture, profitability and customer experience, ensuring they grow not just bigger, but better.

Growth Doesn’t Always Equal Getting Bigger

Growth in banking often gets reduced to pure asset accumulation, but PRI’s perspective is broader. Profitable growth requires maintaining a strong strategic foundation that includes net interest margin, non-interest income, efficiency and disciplined expenses, according to Rawls.

“The bottom line is to evaluate whether you’re improving results and building lasting value as you expand,” he said. “There’s more to the question of growth when you view it in this way.”

While in profitable growth mode, broad institutional goals may include:

• Streamlining processes to maximize efficiency.
• Improving meaningful metrics such as return on assets (ROA) and Efficiency Ratio.
• Unifying the Customer Experience.
• Balancing and creating a value exchange with the institution’s product mix. Focus on relevancy, making additions and subtractions according to customer needs.
• Choosing partners wisely. The right partner can help accelerate growth, while the wrong one will slow the organization down.
• Investing in robust analytics to measure what’s important. How can you know where to focus otherwise?
• Showcasing the personal touch of community banking. This is your superpower, use it!

Strategic Clarity is the Roadmap to Growth

Simply put, acquisition is not the only way to grow. A customized strategic plan provides a roadmap to growth, and it should always be the foundation of its specific growth strategy. As part of the strategic planning process, Rawls emphasizes the importance of an honest internal appraisal that includes the institution’s strengths, weaknesses and capabilities. In addition, identifying a group of aspirational peers can help the bank set a realistic vision for the next stage of its growth.

John Denkler, CEO of First State Community Bank in Farmington, Mo., says his approach is to shift the common mindset by employees that an institution only grows by acquisition. He regularly challenges his teams to become the “financial leaders” in their markets, focusing on growth potential and customer relevancy.

To increase clarity and set a positive direction, the bank’s strategic plan should always answer the following questions:

• Where are we now?
• Where do we want to be?
• How do we get there?
• How do we measure progress?

Profitability Still Starts with the Fundamentals

According to Rawls, the “blocking and tackling” of banking never changes, regardless of institution size. In fact, managing the following basic levers well fuels both growth and resilience at any size.

• Net Interest Margin – Includes loan mix, pricing discipline, deposit mix and funding strategy.
• Non-Interest Income – Includes treasury management, debit card, wealth, insurance and mortgage banking.
• Non-Interest Expense – Includes people, fixed assets and other controllable costs.

Growing Through Deposits

As we highlighted in the PRI blog Deposit Growth Strategies for Today, Tomorrow, and Forever, growing the right deposits is essential, especially for loan-driven banks. Effective deposit growth strategies include:

• Strengthening relationship banking and customer experience
• Reviewing/revamping deposit products
• Expanding digital offerings
• Exploring private banking or wealth avenues
• Competing with larger banks and fintechs through better customer value

“As a bank that normally runs with a loan to deposit ratio in the 90s, deposit generation is key to our continued growth,” said Robb Blume, CEO/President of Community First Bank of Indiana in Kokomo. “We are leaving no stone unturned in our efforts to generate more core deposits. Reemphasizing relationship banking with all our customers, doubling down on our customer experience efforts, examining all our deposit product offerings, introducing a Private Banking department, focusing on improving our digital offerings and expanding our branch network are all on the table.”

Growing Better: Culture, Infrastructure and Pace

There is a difference between scaling up and scaling smartly, Rawls said. Managing the pace of growth requires staying true to the institution’s identity, using the strategic plan as a foundation and utilizing pricing and underwriting standards to modulate expansion. In addition, it’s important to pay attention to infrastructure readiness by pre-building capacity for the size the bank aspires to grow into. Finally, don’t neglect succession planning, evolving the org chart and building the talent pipeline as organizational complexity increases. You’ll need the right people on your team to carry and implement the vision as the institution climbs to the next level.

Technology as a Multiplier for Profitable Growth

Technology’s role in bank growth is not only about speed. Today’s technology is smarter, more efficient, and it provides for more consistent growth. Rawls recommends choosing tech partners wisely, saying the right platform plus the right support can accelerate execution exponentially.

Examples of banking technology that acts as a profitable growth multiplier include:

• Robotic process automation to scale without headcount.
• Data analytics for deeper insight into profitability drivers.
• ITMs and digital platforms that enhance customer experience and justify value-based pricing.

“We’re focusing on utilization of technology to become more efficient, to deliver an improved customer experience, to identify fraud and credit risks and to formulate marketing and sales plans,” Blume said. “We’re concentrating on building out our data management and analysis systems and are beginning the process of utilizing robotic process automation to streamline processes. We believe technology will allow us to continue to grow the balance sheet at a much faster rate than our headcount. It should also provide opportunities to upskill some of our people, leading to better employee opportunities and job satisfaction.”

Culture, Talent and Intentional Communication in a Bigger Bank

As your institution gets bigger, it becomes more complex and requires enhanced approaches to meet the moment. Growth often demands the following steps to level up.

• Increase communication and be intentional. Evaluate the effectiveness of internal communication channels and be responsive to team needs.
• Invest in people early to build long-term capacity. This can include leadership development, apprenticeships and ESOP strategies.
• Pay attention to culture as the “make-or-break” factor in M&A integration and retention.
• Revisit organizational structure, talent needs and succession plans regularly.

“As we grow not just bigger but better, we make sure we’re growing our culture, along with our balance sheet,” Blume said. “We do that by expanding our internal communication channels, providing employee development opportunities and boosting our customer care efforts.”

What “Profitable Growth Today and Tomorrow” Really Means

Rawls said profitable growth really means balancing short-term performance (ROA, margin, efficiency) with long-term value creation. He also says the importance of customer experience, especially at community banks, cannot be overemphasized.

“You must ensure the customer experience remains consistent and personal—even at scale,” Rawls said. “Your relationship with the community and their experience with you will determine your capacity to grow profitably and sustainably in the future.”

Resources:

Deposit Growth Strategies for Today, Tomorrow, and Forever  – PRI

Shrink to Grow: How Streamlining Can Boost Bank Efficiency  – PRI

Strategic Growth Playbook: 5 Priorities for Community Banks – Fiserv

Strategies for Boosting Deposit Profitability in 2026 – Bank Director

PRI specializes in identifying profitability improvement areas for financial institutions through revenue growth, cost control, streamlining processes, and effective use of technology. Contact us to learn more about our personalized approach to propel growth and improve profitability.