The following interview is with Howard Bank President and CEO Mary Ann Scully, who is an active member of the GBC.
After a successful career with financial institutions including Allfirst Bank and First National Bank, Mary Ann Scully led the management team that founded Howard Bank in 2004. Starting with approximately $17 million in assets, the Bank now controls more than $500 million in assets with a stated goal of $1 billion in assets. We sat down with Mary Ann over lunch to better understand the growth strategy of the Bank, learn more about her appointment to the Baltimore advisory board of the Federal Reserve Bank of Richmond and hear what is next for the Ellicott City-based bank. Click here to read Part I.
Oren Saltzman: I’ve always thought that the bigger banks ignore the little banks because they don’t want the smaller loans.
Mary Ann Scully: They wanted the smaller loans. I had a department at Allfirst that reported to me that was all about targeting small business loans, but it was referred to as the factory because the idea was you have all these small business – which takes time and effort to service – and the profit was not there at the end of the day. People were also trying to score businesses like you score an individual credit. In reality, bankers from the larger banks weren’t taking the time to sit down and talk to them to understand the potential of the particular business. They could not understand the potential. That is not the ideal way to handle a small business. The best method is, before examining their financial statements, to sit down and meet with them.
OS: You already mentioned that you purchased a branch in Cecil County. What fundamentals are necessary for future acquisitions?
MAS: What we look at in all of these things is either an existing commercial customer base or an ability to grow a commercial customer base. So, in the case of the Aberdeen branch acquisition, that was driven by a commercial loan portfolio. It’s all about relationships. Banks buy annuity streams. That’s the attraction of a bank. The heart of an annuity steam is a relationship so there has to be strong relationships in place that we think we can retain and expand upon.
OS: Describe the importance of a forming the Mortgage Banking Division?
MAS: I am so glad you asked that question, because it is important for people to understand our strategy. There are three main reasons why we establish the Mortgage Banking Division. One is because, from a shareholder perspective, it provides great revenue diversification. The mortgage business provides us with noninterest income because you sell most of the loans that you make. Secondly, we thought it was consistent with the vision of trying to make an impact in the places where we operate. If you think about the ways in which you can make an impact, you look at the employers and you’re able to leverage that to make an impact. Then you look at home buyers. The goal was to have a mortgage operation that focused on the “purchase money” transactions. So when you’re looking for people who have the same sort of relationships, albeit with real estate brokers and financial planners and attorneys, now you’re helping people make the most important decision they’ll ever make, so it’s consistent with the vision. The third consideration was the opportunistic angle, because there is so much disruption right now in the mortgage banking industry and we see a large opening to fill.
OS: What is next for Howard Bank? What obstacles stand in your way to get to the next level?
MAS: What’s next is what has always been out there. More growth in assets, revenue, profits, people and geography. I wouldn’t say there are obstacles, because the decisions you make and people you hire can dramatically effect what happens. Since the banking industry is healthier than it was five years ago, it’s not as easy to attract qualified people because they are thriving in their current situation. You also need staying power to wait and grow. And if another bank can’t grow, should they partner with somebody who can grow- with us ? There are many considerations at play.
OS: I know you can’t talk about the possibility of getting acquired yourself. But, can you address a situation where this might become a reality?
MAS: Any CEO who’s thinking of their shareholders has to say I’m going to do what’s best for my shareholders. One of the things I’ve always said to our shareholders is that we always take a long term view of their situation. If a bank is still growing, if we’re still growing their tangible value, then we are delivering our promise.
OS: I heard you’ve been recently appointed Director of the Baltimore advisory board of the Federal Reserve Bank of Richmond.
MAS: Yes, and it is in an advisory board position for three years. Any person that has been a banker for their own life would consider this an exciting opportunity. Statistically speaking, this is not something that’s going to be available to the vast majority of bankers. So, it is a tremendous honor. A very small minority are actually day-to-day bankers.
OS: How much fun are you having right now?
MAS: I love what I do. I have no trouble getting up in the morning and getting motivated for the work day. Every single day is a tremendous and rewarding experience, so I feel extremely fortunate to say that.
OS: What do you do to get away from it?
MAS: I’m an avid reader. I have books all over the house. I still read books, not online books. I enjoy traveling. At one time I was an international banker and I have a sixteen year old who has never seen all these places that I’ve seen. So we started this tradition where every other year we go someplace overseas. We went to Venice two years ago and this past summer we went to Paris and we actually rented an apartment there. It was wonderful. A great experience that everyone should try.
Oren D. Saltzman OSaltzman@AdelbergRudow.com is Managing Member with the law firm Adelberg, Rudow, Dorf&Hendler, LLC with offices in Baltimore City, as well as Baltimore and Howard Counties. He focuses on commercial and corporate law, banking, estate planning and administration, bankruptcy workout, taxation and guardianship. For more information, call 410-539-5195 or visit www.AdelbergRudow.com.