Howard Bancorp in Maryland and Bryn Mawr Bank Corp. in Pennsylvania, both banks with suburban roots, have marketing challenges on their hands after recent acquisitions in more urban areas. Their goals — to raise their profiles in new, diverse neighborhoods — are identical, but their approaches are very different.
The $2.1 billion-asset Howard is so committed to Baltimore that it moved its headquarters downtown from suburban Ellicott City after completing the purchase of First Mariner Bank on March 1. Now, the merged company plans to increase its philanthropy budget and focus it on projects that will benefit what CEO Mary Ann Scully termed “stressed” communities; job training will be a top priority.
Bryn Mawr deepened its presence in Philadelphia after acquiring Royal Bank American in December. The resulting $4.5 billion-asset company has established a multicultural advisory board made up of a dozen prominent African-American, Hispanic and Asian professionals in the Philadelphia area to invite input on community needs.
The banks' moves are notable at a time of rethinking of federal policy toward banking and disadvantaged populations. Regulators are considering changes that could effectively “dial back” enforcement of the Community Reinvestment Act, according to recent remarks by Comptroller of the Currency Joseph Otting. The discussions are part of an age-old debate pitting those who say financial companies need to be prodded to serve less affluent markets, versus others who feel CRA rules are outdated for a digital age and stifle innovation.
In this environment, creative initiatives like the ones Howard and Bryn Mawr are pursuing will likely take on greater importance and command more attention, said William Michael Cunningham, the CEO at Creative Investment Research and a frequent commentator on minority banking issues.
“It’s kind of where we see the financial marketplace going” in an era of lighter regulation, Cunningham said.
To be sure, each bank added less than half a dozen urban branches. Nevertheless, the additions were enough to more than double their urban mix (see chart above) and provide them exposure among large groups of city residents.
Bryn Mawr’s advisory board is the brainchild of its newly hired vice president of multicultural banking, Miguel Alban. The panel's job will be to open lines of communications with minority communities, Senior Vice President Tina S. McDonald said in an interview.
“We want to be more all-encompassing and understand the communities we serve,” McDonald said. “We’re trying to listen to all our constituents in a more meaningful way.”
Bryn Mawr is counting on the advisory board to help it operate “with greater cultural awareness and sensitivity,” Joe Keefer, executive vice president and chief lending officer at Bryn Mawr Trust, Bryn Mawr’s bank subsidiary, said in a press release last week that announced the board's formation. “It’s about doing our best to serve the underserved in our communities throughout the Philadelphia region."
For banks expanding into urban communities, the idea of a multicultural advisory board “makes sense,” Cunningham said, adding that he applauds efforts by institutions to “move outside of their comfort zone” to serve the needs of minority customers.
“Nondiscriminatory provision of credit creates shareholder value and social return,” Cunningham said.
Howard, too, is talking to “potential community partners,” Scully said, but its efforts at dialogue are aimed at refining and advancing the plan already charted by Scully and President Rob Kunisch. Both have spent most of their careers in Baltimore and drew on their wide networks of connections while formulating the merged bank’s program.
“Candidly, we’re pretty well connected,” Scully said. “We know a lot of people in the community, and we’re always talking to new people, as well.”
While the greater Baltimore market includes tens of thousands of highly educated workers possessing world-class job skills, thanks in no small part to the presence of Johns Hopkins University and the University of Maryland, it is also home to pockets of “systemic unemployment,” Scully said. She wants to do something about it.
Job training “is an area we feel we can be impactful,” Scully said. “We’re hoping we can chip away” at the problem. “Developing people is really the most important thing you can do.”
Howard’s approach may appear top-down, but the years of in-market experience Scully and Kunisch bring to the table can’t be discounted, Cunningham said.
“They should have pretty good ties,” he said. “They know who’s who and what’s what.”
Scully declined to disclose how much Howard plans to spend, but the combined company’s philanthropy budget will be larger than the sum of Howard and First Mariner’s pre-merger spending, she said.
“Philanthropy has always been an important part of the value-add we bring as a bank in the community,” Scully said.
