Six Decades and Counting at The Bank of Glen Burnie

By Mark R. Smith, EDITOR-IN-CHIEF



It was August 7, 1949 - perhaps giving or taking a day or so.

At the time, there was only one bank in the burgeoning suburb of Glen Burnie, the County Trust Co. of Maryland. A predecessor of Maryland National Bank, the Baltimore-based institution was formed after the Great Depression from the debris of another bank that had failed.

But the County Trust Co. wasn't considered local by the locals in Glen Burnie since, for instance, loan applications had to be run by the staff at its downtown headquarters for approval.

The community's desire for an independent local bank is what spurred F. William Kuethe, Sr., and other local businessmen into action. "My dad walked up and down Crain Highway and started selling stock to local residents," said F. William Kuethe, Jr., director and president emeritus of the bank, "with many a deal sealed by a handshake."

That was the genesis of a bank that is now entering its seventh decade with $350 million in assets among its eight branches.

"We were able to get approval to found the bank quickly because the decision-making process was local," Kuethe said. "That made it much safer to make loans, since borrowers saw that we were dedicated to their community."



All in the Family

While The Bank of Glen Burnie was considered a success right off the bat, it wasn't profitable initially. "The returns were steady, but not spectacular," said Kuethe, noting the bank originally was based in a nearby rental space before the current location opened at 101 Crain Highway in 1953. "As the deposits gradually came in, the bank started to grow."

Like Kuethe, Chairman of the Board John "Jack" Demyan's roots with the organization can be traced through his family tree.

"My father was also a founder of the bank in 1949 and served as vice president," said Demyan. "My family has always owned stock in this bank," he said, noting that the senior Demyan also served as president from 1980 through 1989.

He also stressed the bank's deep, strong roots that have led to it having a 3.36% market share in Anne Arundel County as of a year ago (the most recent figure available), ranking it 10th in the market. "We're a traditional bank, family first," said Demyan, who became a board member in 1990 and has been chairman since 1995. "That cohesion has been an attraction to our customers."

And, of course, being in business for 60 years has meant withstanding the moods of the market. "We've been through all the cycles since the Depression," Demyan said, "and have weathered the storms."



The Straight and Narrow

Demyan discussed how the bank has dealt with various trends and issues in the industry over the decades, such as the bank's decision to list on NASDAQ in 2001 and others that have affected the market of late.

"In recent years, we've had enormous competition due to sub-prime lending, but we stayed out of that," he said, noting that CEO Mike Livingston had major input in the decision against partaking in a trend that resulted in devastating effects on the economy and the careers and personal finances of millions of Americans (which has, in part, led to the bank's stock buyback program).

Also, competition in general is much keener. "We have a lot of new banks moving into our area," Demyan said, "as well as credit unions, which have the competitive edge of tax exempt stature."

That's a far cry from the local financial landscape in 1949, when The Bank of Glen Burnie actually became the competition. "Now Anne Arundel County is seen as a hot market, especially due to the Base Realignment and Closure," he said.

What the bank has done so well since is simply stay the course. "And note that we don't do deal banking," Demyan said. "Everything we do is relationship-oriented. We want to do multiple deals with our customers over time."



Intimate Relationships

"Relationship." That's the key word to remember when discussing the success of The Bank of Glen Burnie, said Rick Faby, senior investment counselor with Van Sant & Mewshaw in Lutherville.

"That company knows their clients better than most banks, and they know the asset that they're lending on, whether it's a piece of land, a building or a person," said Faby. "They know."

And when a deal doesn't feel right, the bank's brass isn't afraid to make a tough decision. "Sometimes they have to say 'no,'" he said, "and they do."

One move The Bank of Glen Burnie has said "no" to many times is expansion [it didn't expand until the opening of the Odenton branch's original location in the mid-'60s]. "These small banks sometimes expand too much," said Faby, "but this bank has focused on controlled growth, meaning they expand when it's appropriate from a risk standpoint."

And while it may sound obvious to say that the bank's management team and board know what's in the bank's portfolio, it really isn't. "Some large institutions don't know what's in their portfolio, their structure or even what's in the closet down the hallway," he said. "Unknown assets have taken many a big bank down."

But when the CEO knows every loan, whom they're dealing with and what problems may arise, "they can anticipate issues and deal with them before they become damaging to the reputation of the bank," Faby said.



It's Something Personal

Such intimate knowledge of the market and its customers has been the recipe for success, said Kathleen Murphy, president and CEO of the Maryland Banker's Association.

"They have stuck to their knitting," said Murphy, noting that the Northern Anne Arundel County area (and Glen Burnie especially) is not very transient, which is another reason that the bank is so intertwined in the local scene.

"Many traditional savings and loans have been around for decades," she said, "and many are in Baltimore because they were founded to serve certain ethnic groups. Others were more geographically-based, like Rosedale Federal. That's where The Bank of Glen Burnie comes in."

Another facet of the bank's success has been the consistency of its ownership. While approaches have been made, and "everything has its price; I don't think we'll ever be sold," Kuethe said - but, if it is, there is a provision in the bank's change of control plan that the employees be "taken care of."

Staying local is so crucial to the bank's success that it even continues to handle its processing in-house. "When a customer calls in for mortgage information, they talk to us because we have not sold our mortgages to a third party," Kuethe said.

Nor does the bank strand its customers in voicemail hell. "When our executive officers answer their own phones," he said, "that sets us apart from other banks."

It's that type of service that customers have received for decades. "When I first got into banking, people would tell me that if it weren't for my father, they wouldn't have their house," Kuethe said, "and it's happened for three generations."

When Livingston visits local diners, it's more of the same. "I hear story after story about people who got their first business loans at the bank," he said.

"We don't have to do everything, but we know our own products very well. It behooves us to do a good job," Livingston said, adding, "or we might hear about it over breakfast or lunch."