Washington Business Journal, Andy Medici
If you’ve been worried about local banks disappearing faster than free pizza at an office party, you’re in luck — Greater Washington has a new bank.
Old Dominion National Bank (founded in 2005) seems like an unlikely entrant into the highly competitive, but potentially lucrative market. It has just $80 million in assets (eight of EagleBank’s branches have more deposits than that) and two branches, both near Charlottesville.
But the North Garden, Virginia-based bank (that’s 10 miles outside Charlottesville) announced in December it was moving its corporate headquarters to Tysons, and has also taken other high-profile steps to reposition itself to compete, including:
- Raising $30 million in new capital from 157 shareholders, a majority of them from the D.C. area, according to Old Dominion.
- Adding four new board members from the Washington, D.C. area, including Thomas Dungan, who served on the board of Virginia Heritage Bank and Potomac Bank of Virginia and is the CEO of Tysons-based Management Concepts Inc., and Wendy Mitchell, who served in compliance and risk management leadership roles at United Bank, and formerly Virginia Commerce Bank.
- Hiring a slate of experienced management professionals from Greater Washington’s business community, snagging executives from Cardinal Bank, EagleBank and others, including CEO Mark Merrill.
And in a period where just a handful of new banks have been chartered across the nation, and none in Greater Washington in the last 10 years, Merrill said Old Dominion did the next best thing in buying a charter.
“The lion’s share of the new shareholders are in the Washington, D.C., area. The board members are from the Washington metro area. We believe 70 to 80 percent of our growth is coming from here. The thought was really to launch this as a Northern Virginia bank in the heart of Tysons Corner,” Merrill said.
If you haven’t heard of Merrill before, he has served as the executive vice president for finance at EagleBank and before that as the executive vice president and chief financial officer of Virginia Commerce Bank, which reached $2.8 billion in assets before it was sold.
He was also the executive vice president and chief financial officer at Harrisburg, Pennsylvania-based Graystone Bank, which he helped grow to $2.7 billion in assets, 50 offices and 550 employees before it was sold to Susquehanna Bank for $343 million in cash and stock.
His goal with Old Dominion is to see $300 million in assets in two to three years, and to be profitable by then. After that he wants to hit $1 billion. Eventually he wants to open around four branches in strategic locations in the metro area. The bank is officially opening its first branch in Tysons on Monday, and is opening another location near Charlottesville on the same day.
“We want to be a regional bank. We don’t necessarily need to be a contiguous bank,” Merrill said. “We want to be the next EagleBank the next Cardinal, the next WashingtonFirst.”
Merrill said the management team and the shareholders have already considered potential challenges and accounted for them. For example, the heavier regulatory burden means it will take longer to reach profitability than it had before, and he anticipates losing $3 million to $5 million before Old Dominion reaches the black.
What about competing with established and deeply rooted banks like EagleBank, United Bank and others? Merrill said the last few years of consolidation ( which we cover in more detail here) has left plenty of room for new banks, and he plans on building the business on $1 million to $3 million loans to smaller businesses.
This “concierge”-style banking is what Old Dominion thinks will set it apart, saying that it will cater to small business owners and their financial needs, whether it’s on the personal side or the business side.
Some of the other executives Merrill and Old Dominion have recruited include:
- Kevin Albrigo, executive vice president and chief lending officer, was the former managing director of the Medical Specialty Group at SunTrust Bank, and before that was a senior vice president at WashingtonFirst Bank and Virginia Commerce Bank.
- Stephanie Lykins-Harvey, director of retail banking, most recently worked at Cardinal Bank as a regional sales and service manager, and before that worked at Virginia Commerce Bank overseeing eight of its branches.
- John Hunter, chief credit officer, was most recently senior credit manager at Cardinal Bank, and has held management positions for SunTrust Bank, Crestar Bank and Signet Bank.
The management team assembled so far is talented and relatively young, according to to Adam Eckels, co-owner of bank executive search firm AJ Consultants. He added that it’s not typical to see this kind of leadership at a bank as small as Old Dominion.
“It’s a greatest hits and a who’s who of other banks represented. It’s a lot of up-and-coming leadership,” Eckels said.
He said Merrill has a track record of strong growth, and he expects other talented young bankers to follow him to Old Dominion Bank, especially as it grows over the next few years.
“It’s because of what has Mark has done in the past and the people they have hired that I don’t think getting to that number is going to be an issue,” Eckels said. “But will it be a success? Only time will tell.”