John Holaday, a former chief executive of a pharmaceutical development company, knows dozens of executives in the biotechnology industry and knows how they struggle to make themselves understood to bankers.
“When they enunciate their needs, they usually tend to give the technical details of their business, and bankers’ eyes often glaze over,” Mr. Holaday said. “And then the banker will start telling them better ways to manage their assets, without understanding a thing.”
Last year he decided to do something about this: start his own bank. HarVest Bank of Maryland, scheduled to open in September, will target the nearly 300 biotechnology firms that have cropped up in the Maryland and Washington areas over the past few years. It also plans to serve professionals involved in general technology, medicine, and government contracting.
Mr. Holaday founded the Rockville bank with John “Jack” Hollerbach, a former banker who also worked for technology and government contracting companies. Mr. Holaday is chairman of the board, Mr. Hollerbach the president and CEO.
HarVest aims to provide more than just banking services. It will also connect customers with investors, strategic partners (while providing some strategic planning advice of its own), potential employees, and accountants and lawyers.
“Just like the post office was years ago, HarVest Bank of Maryland wants to be the center of the technology community,” Mr. Holaday said.
He and Mr. Hollerbach have put together an 11-member board made up of executives from each of HarVest’s four target industries. Their hope is that the directors’ ties to the industries will yield a large customer base.
HarVest will open with capital of $10 million, one branch, and 12 employees. By yearend it hopes to have raised an additional $4 million of capital and opened another branch, Mr. Hollerbach said.
He said the bank plans to expand in a three-county region northwest of Washington and hopes to have as many as eight branches within five years.
Mr. Holaday said there is more than enough business in Maryland’s biotech, technology, government contracting, and medical industries to support such growth. Large out-of-state banks have acquired six banks in the area in the last couple of years, and many companies in these industries want to do business with a local, hands-on bank, he said.
Arnold Danielson, the chairman of the Rockville bank consulting firm Danielson Associates, said HarVest’s positioning is a good way to get people interested, but in the long run it will have to expand into general small business to sustain growth, he said.
“If this specialty focus is more part of a marketing game, then I think they are going to do quite well, especially with all the well-connected people involved,” Mr. Danielson said.
