In an age of mergers and acquisitions, stability in the banking industry remains the gold standard. One local institution that still fits that standard is OBA Bank, which celebrated its 150th anniversary last year.
Long a fixture in the triangular region defined by the cities of Frederick, Baltimore and Washington, D.C., OBA is headquartered in Germantown and entered the Howard County market through its Columbia branch on Little Patuxent Parkway in 2008.
Its newest expansion and sixth location, a commercial banking center and full-service branch facility on Teague Road in Arundel Mills, brought the bank into the Anne Arundel County market last month.
“We’re certainly not the oldest bank out there,” said President and CEO Chuck Weller, “but we’re one of the oldest in this general marketplace.”
The anniversary was a major milestone for an institution chartered well before the American thrift industry’s general heyday of the late 1800s. In fact, only a handful of building and loans can claim they are older.
“Basically we’re still a local community bank serving the central region of Maryland with meat and potatoes products and services,” Weller said.
Steady, Smart Growth
OBA began its existence as a typical social organization formed to serve the interests of its original members — German immigrant businessmen who worked in the Chinatown District of Washington, D.C.
Like many other ethnic groups in that era, the founders pooled their resources and capital to assist those in their circle who found it difficult to acquire loans or credit elsewhere.
Steady business and growth over the past century-and-a-half helped solidify the bank’s presence.
Initially, OBA operated as a typical savings institution that offered only residential type loans and mortgages, but it soon moved into the business and real estate lending sector.
“A lot of savings banks stop at that point,” Weller said, “but we expanded over the past 10 years to include more typical commercial and industrial type lending and credit products and services. We’re now fairly balanced in our customer base.”
Total deposits held by OBA amount to approximately $275 million, held by a mix of retail and commercial type customers.
In 2009, OBA converted from a mutual savings bank to a publicly traded bank issuing its own stock.
“We were able to raise $46 million in capital, bringing our capital levels to around $70 million, about double our previous normal balance,” Weller noted.
Staying Small Helps
The cornerstone of OBA’s business philosophy has been strong customer service, which has helped the bank build lasting relationships with its customers.
“It sounds like a cliché,” Weller said, “but we have an incredibly loyal customer base.”
Part of the bank’s appeal lies in its size and flexibility. “Our staff knows our customers by name, and we have seasoned tellers with very little turnover,” he added.
Despite systematic growth and maneuvering to enhance profitability, OBA has managed to stay smaller than other traditional banks in terms of organizational structure.
“We use a decent amount of technology so that one staff member can pretty much handle everything a customer might need,” Weller said, with remote deposits adding to its convenience.
Like every other financial institution, OBA has faced its share of challenges in recent years owing to the housing bubble burst and ensuing recession.
“We have remained fairly conservative in our lending practices, so we never really got into the types of acquisitions, developments and no/low-documentation loans that got other banks into trouble,” Weller observed. “We basically stuck to our knitting … and avoided that catastrophe altogether, so that credit quality really held up for us.”
New federal regulations have made it a bit more complicated to do business, Weller observed, with the current lending environment characterized by increased competition and diminished opportunities for banks to deploy funds.
On the bright side, Weller has noticed a slight improvement in terms of new business. “Up until recent years banks were basically recycling each others’ customers,” he said. “Revenues appear to be picking up now, and customers are starting to become a bit more optimistic about their financing needs.”
With that in mind, OBA is poised to take advantage of development potential in Howard County.
“Columbia is by far our fastest-growing location and is almost our largest branch at this point,” Weller said, a situation that validates the bank’s strategic decision to enter the Howard County market.
“I’ve lived and worked in Columbia since 1986 and was actively involved in banks in the Howard County marketplace,” he said. “I knew it well and wanted to go back.”
In 2007, Ken Williams accepted an invitation to leave his position as vice president of commercial lending at BUCS Bank to help launch and manage OBA’s Columbia branch. A former president and CEO of the Howard County Chamber of Commerce, Williams now serves as a vice president and commercial banking officer at both the Columbia and Hanover locations.
The new locations also have attracted some other impressive and well-known commercial banking managers from the local community, Weller said, including Dave Gramil, Theresa Fodel and Bruce Hollander.
“The timing worked out really well for us in Howard and Anne Arundel counties,” Weller said. “With the ongoing banking consolidation, there’s a renewed need for community banks in the marketplace, and customers are responding.”