Burke & Herbert Bank is beefing up its lending, tech efforts – and expanding into new territory

March 16, 2021

By Andy Medici  –  Senior Staff Reporter, Washington Business Journal 

The 168-year-old Burke & Herbert Bank is beefing up both its commercial banking presence and its technology as it looks to be more active in 2021 and beyond.

“We will be a much more technologically advanced bank than when we started the year,” CEO David Boyle said of the Alexandria-based bank’s plans for 2021. “We will have a better presence in the market than we have had in the past, particularly in the commercial space. There will be more of us on the street. And we will be active.”

Those moves include hiring two commercial real estate bankers in Jeff Rouse and Lee Pugh for the Fredericksburg market, hires that come after Gregory Mellors joined the bank earlier in 2021 as senior vice president, commercial banking to lead its commercial and industrial lending efforts.

And those hires won’t be the last in 2021, with Boyle saying in an interview that Burke & Herbert intends to bring six to 10 new bankers on board to deepen and extend its commercial banking presence across Virginia, with more activity planned for Charlottesville, Ashburn and even southern Maryland.

The bank is also eyeing potentially expanding its branch network in areas where it currently does not have one, whether it is Fredericksburg, or the city of Fairfax, Reston or Herndon. Commercial banking efforts usually come first, and then the bank decides whether to bring its entire suite of services, such as consumer banking, mortgage lending and wealth management to those areas, Boyle said.

“It just made logical sense to take the ring where we do business today, and expand it out by 20 or 30 miles to the south, the east and the northwest,” Boyle said, adding that while the bank already does deals as far out as central Pennsylvania, it make sense to expand its presence and compete for business. “We are actively growing the business and we are going to be opportunistic in growing the business. We are not going to grow for the sake of growth.”

The moves come after a 2020 defined by the Covid-19 pandemic and cost-cutting the bank undertook as it re-evaluated its priorities, including reducing staff and closing two locations, which freed up resources, Boyle said. And that showed in the bank’s 2020 earnings. Burke & Herbert was down from 455 employees at the end of 2019 to 409 at the end of 2020, according to data from the FDIC. Profits were up from about $17 million at the end of 2019 to about $26.5 million at the end of 2020.

The bank, which has made about $135 million in Paycheck Protection Program loans, also took an opportunity after the market crashed in the first quarter of 2020 to invest about $150 million of its surplus cash in securities, which yielded big gains.

“The pandemic has a lot of things it could be blamed for but it turned our focus internally and it allowed us to reevaluate a lot of the things we are doing. We came out of it a much more efficient bank,” Boyle said. “We looked at every penny that we spend and why do we spend that dollar.”

He stressed that the bank would put some of those profits to work investing in its technology as well.

That includes having a new customer-facing online banking system up and running by the end of the summer, which will allow the bank to more easily onboard new accounts online. It also means finalizing a treasury management system that Boyle said will rival any bank in the market.

The bank has grown in size as well, reaching more than $3.4 billion in assets at the end of 2020, up from about $2.8 billion at the end of 2019. It ended 2018 with roughly $3 billion in deposits, so it has now more than made up the ground it had lost.

Boyle took the reins from CEO Scott McSween in early 2020 as part of a long-planned transition arrangement. Chairman E. Hunt Burke, who in turn had served as CEO, had said earlier in 2019 the bank’s deposits had been stagnant. Boyle had vowed at the time to breathe new life into the bank’s operations.

Now the bank is preparing for widespread growth.

“It’s going to be a measured growth but it’s going to be a noticeable growth,” Boyle said. “We are actively growing the business and we are going to be opportunistic in growing the business.”

This article was originally featured on the Washington Business Journal website, and is used with permission.