BRYN MAWR NATIONAL BANK

I. Title of the Case:

BRYN MAWR NATIONAL BANK
II. Case Brief
III. Viewpoint:
President John Fargo
IV. Time Context:
Early 1982
V. Problem Statement
Sustaining the success of Banking Strategy of Bryn Mawr National Bank in the midst of high
competition
VI. Statement of Objectives
 To increase the performance within the next two to five years
 For asset expansion and deposit growth
 To define future goals and strategy of the Bank for the succeeding years in response to
the challenging conditions in the local banking industry.
VII. Areas of Consideration
A. Internal Environment

Background of the Company

During the 1880's, Bryn Mawr had developed into the largest community in Lower Merion Township
with approximately 300 homes clustered around the ornate railroad station building. Small businesses
were barred from Montgomery Avenue by the railroad's zoning restrictions, so they grew up along
Lancaster Pike. Construction was a flourishing industry at the time. In response to the financial
requirements of the rapidly growing community, the Bryn Mawr National Bank was chartered on August
3, 1887.

Since the National Banking Act made no provisions for savings accounts, banks usually confined their
activities to receiving deposits, issuing currency and granting loans. As a result many trust companies
were formed to feature time deposits on which interest was paid. They also served as executors,
administrators, trustees, and guardians. As a logical adjunct to the services provided by the Bryn Mawr
National Bank, The Bryn Mawr Trust Company was organized, primarily to engage in insurance of land
titles and trust business. Its charter was issued by the Commonwealth of Pennsylvania on March 25, 1889.
The new company was established in one half of a 2 story building known as Ramsey's Hall, on the
present site of the Bryn Mawr Post Office. The other half of the building was occupied by the Bryn Mawr
National Bank.

In 1893 a financial panic resulted in many bank failures, but both banks weathered the storm. In 1901 The
Bryn Mawr Trust Company purchased Ramsey Hall, so became land lord to the Bryn Mawr National
Bank. In 1908 Bryn National Bank moved to a new building that had been erected on the south-west
corner of Lancaster Pike and Bryn Mawr Avenue, so Bryn Mawr Trust Company took over the entire
Ramsey Hall building.

The 1920's ushered in a new era of prosperity and rapid expansion of construction activity. Bryn Mawr
Trust made 2 additions to Ramsey's Hall and purchased the former site of Ramsey's store on the north-
west corner of Lancaster Pike and Bryn Mawr Avenue. Construction of a new building, on this site, began
in 1927 and the company moved to its current main office on December 15, 1928. The two banks
continued as separate businesses until December 31, 1954 when Bryn Mawr Trust merged with Bryn
Mawr National Bank.

Internal Forces
Marketing The bank utilized a variety of media. Billboard
advertising on heavily traveled highways was
thought to be an effective way to reach household
accounts. Radio advertising at the beginning of
each month was used to reach both markets.
Every two months a letter was sent to
businessmen. One letter would “sell” payroll
accounting. Another letter would “sell” checking
accounts. A third letter might “sell” the different
types of loans available at the bank.

Another means of promoting the bank, they

contribute to or co-sponsor local sporting or
theatrical events. They practice of giving
 premiums or gifts for opening new accounts or
substantially expanding current accounts.

The bank objective primarily provides services in

money for people with modern needs; maximum
privacy and security for the Bryn Mawr clients’s
assets; dealing person-to-person, in confidence
and trust with Bryn Mawr people, of which stands
as their best advertising strategy.

Bryn Mawr National Bank has established four

branches in strategic areas. Theses branches
operate in the adjoining towna either in shopping
centers or on heavily traveled main roads. All
branches and the head office have ATM’s.
Structure
Processes and system/Operation
Resources The Bryn Mawr National Bank (BMNB) was
organized by 17 wealthy town fathers who felt
that Bryn Mawr needed to have a bank of its own.
Five (5) of them had essentially altruistic reasons.
Another were those who were profit motivated
and four (4) men who felt that being on the board
of directors of a bank meant power and prestige.

The organization consists of three (3) senior

officers. All have bachelor’s degree in business
administration and have attended the Stonier
School of Banking. They also have achieved
advanced certificates for completing prescribed
banking courses. Moreover, they all have
experiences in a banking industry before they
became affiliated with Bryn Mawr National Bank.
John Fargo, the first President of BMNB is 52
years old. He has been in banking for over a
 quarter of a
century and joined the bank in 1965. Craig
Robinson, the Vice President Chief Loan Officer
is 47 years old. He has been in the banking for
over 20 years and joined the bank in 1965. Arthur
Porter, Vice President Chief Operations Officer is
49 years old. He has 24 years of banking
experience, mostly in the spheres of accounting,
operations and bookkeeping. He joined the bank
in1971.

To complete the organization, there are 12 junior

officers including five (5) branch managers, seven
(7) supervisors and 52 clerical/ teller personnel in
the bank. The tellers are all female in their late
teens to middle twenties to early forties. All had a
required experience needed in their position.

Clerical/ teller personnel are hired from local area.

There is a high turnover among younger woman.
Student wives are generally good workers, but
they leave after their husbands graduate. Some
employees leave to get married and other to have
children. In the last three (3) years turnover
averaged 35% per year. Yet, this is comparable to
the experience of other banks in area.
Financial The Banks uses different variety of media to
promotes its product and services. * Overall target
of $50,000,000 total deposits had been reached. *
Offers full range of services which can cater
various customers. * The Bank had been
moderately successful in terms of asset expansion
and deposit growth. * Had a well experience work
force, with banking experience.
 Currently, Bryn Mawr Bank Corporation
(NASDAQ: BMTC), including its principal
subsidiary, The Bryn Mawr Trust Company
(founded in 1889; headquartered in Bryn Mawr,
Pa.), is a locally managed financial services
company providing retail and commercial
banking, trust administration and wealth
management, and insurance solutions. Bryn Mawr
Bank Corporation has $5.3 billion in corporate
assets and $16.5 billion in wealth assets under
management, administration, supervision, and
brokerage (as of 12/31/2019). BMT operates 52
banking locations in Montgomery, Chester,
Delaware, Philadelphia and Dauphin Counties in
Pennsylvania, New Castle County in Delaware,
and Camden and Mercer Counties in New Jersey.

External Forces
Legal and Regulatory Bryn Mawr National Bank is a member of Federal
Deposit Insurance Corporation

Social/ Customers The Bryn Mawr National Bank was established by

Bryn Mawr people for Bryn Mawr people
therefore its prime customers are the people of
Bryn Mawr. Eighty percent of the bank’s deposits
come from the people of Bryn Mawr and its
contiguous towns. Another 15% come from an
area stretching as far as Paoli, as far as east as
Philadelphia, as far as north as Schuylkill River,
and south to Chester. The remaining 5 percent
come from throughout the eastern United States.
Moreover, bank is interested in two market
segments. One is the household accounts of
 residents of the town and the contiguous area. The
second is the small businesses in Bryn Mawr and
the surrounding region.

SWOT Analysis

STRENGTHS

 The bank provides full range of services

 The bank utilizes a variety of media
 Moderate success in asset expansion and deposit growth
 Extensive coverage of deposits
 Easily accessible location
 Technical expertise of employees
 BOD’s are seasoned bankers and are highly competent

OPPORTUNITIES

 The area in which the bank serves is predominantly residential. Hence, they can expand
services beyond the town and its adjoining area.
 Educational institution as additional target
 Ventures to other financial services products
 Probable partnership

WEAKNESSES

 -limited branches to serve customers

 High turnover rate for women (under clerical/teller)
  Profit in some months was very low
 Limited target market

THREATS

 Competitive conditions in the banking industry

 Merger/acquisition/closure of town and country banks to large
 Employees turnover averaged 35% per year in the last three years

V. ALTERNATIVE COURSES OF ACTION

ACA No.

1. Create a partnership for the purpose of the company growth by

expansion/acquisition/partnership with other local banks

2. Maximizing the allocation of Capital

3. Improving the effectiveness and efficiency to create a value for the customer
VI. ANALYSIS of Alternative Courses of Action

1. Create a partnership for the purpose of the company growth by

expansion/acquisition/partnership with other local banks

ADVANTAGES DISADVANTAGES
Stronger ties
Partnership can create an avenue for innovative Lack of integration can dilute strategy
services
Capture value and recover investments Heavy handed approach can destroy value and
lose business
stronger financial position and performance

2. Maximizing the allocation of Capital

ADVANTAGES DISADVANTAGES
opportunity to re-examine portfolio and customer
segments
can create a long-term value for customers not limited capital
just transactional focus
Adaptability to new regulations decentralized investment decisions

3. Improving the effectiveness and efficiency to create a value for the customer

ADVANTAGES DISADVANTAGES
Segment customers and develop value market not yet tested
propositions (new products and services)
technological advancement may increase deficit is probable due to high expenses to be
efficiency but may also increase employee incurred in product development
replacement
VII. CONCLUSION

FACTORS THAT COULD AFFECT IN INCREASE GROWTH

ACA # 1
ACA # 2

ACA # 3

Criteria ACA 1 ACA 2 ACA 3

1 Capital Market 3 2 1
2 Investor Relations 3 2 2
3 Value for Money 3 2 1
4 Timeliness 1 2 3
Average 10 8 7

Legend:

1 – Good

2 – Better

3 - Best

Criterion explained:

1. Capital Market - financial markets for the buying and selling of long-term debt or equity-backed
securities within the banking industry. This affects the services that the financial services is currently
offering

2. Investor Relations - is a strategic management responsibility that is capable of integrating finance,

communication, marketing and securities law compliance to enable the most effective two-way
communication between a company, the financial community, and other constituencies, which ultimately
contributes to a company's securities achieving fair valuation
3. Value for Money – maximum benefit that the bank or company can generate from the course of action
being implemented

4. Timeliness – time frame to fulfill the required action

Therefore, Developing alliance with other banks for probability of merger, acquisition and partnership
will give Bryn Mawr advantage on its financial position and performance. Hence, give them a better spot
to develop innovative solutions and better product offering over its competitors. Despite the probable
issue in timeliness of implementation and execution, this strategy will give them a long-term response to
increase the growth rate in the competitive environment.

VIII. PLAN OF ACTION

Function/Activity In Charge Time Frame

Preliminary meeting with other -contract management, financial 6 months
banking partners management 6 months
President, Corporate Lawyers of
all concerned banks

Corporate restructuring Management and Department 6 months

Heads
- which includes employee
turnover, compensation
package, organizational culture
and ethics 6 months
Management and Department
Heads

Adjustment Period All employees 3 -6 months

training, policies and

procedures, evaluation, and
monitoring control 3 -6 months
All employees