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Following the money, banks flock to Loudoun
Nan Forbes stood outside Middleburg Bank in Leesburg, happily eating a chocolate ice cream bar. It was client appreciation day, and a small ice cream wagon greeted customers at the front door.Forbes, of Purcellville, had just gone into the bank on Catoctin Circle to fix a small problem with one of her personal accounts. A staff member cleared up the issue quickly and efficiently, she said.
A customer for five years, Forbes said she was “tired of bureaucracy” with other, larger banks and switched to Middleburg Bank because it's “very much a people-to-people bank.”
Loudoun-based Middleburg Bank opened its doors in 1924, and, for 83 years, has successfully avoided being bought out by a larger bank. In fact, during the last 13 years, the bank has been steadily increasing the number of branches – and therefore its market share -- in Loudoun and the surrounding area. There are nine branches now in the county.
Across the street from the Catoctin Circle branch sits Middleburg Bank's main competition, North Carolina-based BB&T, the 11th-largest bank in the nation. Since 2003, the two banks have competed for the No. 1 spot in the Loudoun market. Latest statistics show that BB&T boasts nearly 20 percent of the total deposits among countywide banks, while Middleburg Bank has about 18 percent.
BB&T has purchased nearly 20 banks during the last 10 years, expanding its reach from Maryland to Florida and Kentucky. It now has 1,450 branches – 12 in Loudoun -- and $121.7 billion in assets.
“It was great when BB&T took over. There were branches everywhere,” said Leesburg resident Christie Kobylinski, who has multiple accounts with BB&T, after it bought her old bank several years ago.
She cited convenience as the main reason she banks with BB&T. For example, if her daughter Lauren, a college student in Charlottesville, ever needs emergency funds, Kobylinski can transfer money from the comfort of her home computer.
A close second to convenience, she said, is her satisfaction with customer service. “I've had banks in the past, where you get stuck on an issue and they don't fix it for you.” BB&T, she said, has always been responsive to her needs.
The rivalry for dollars
Competition for the dollars of Loudouners such as Kobylinski and Forbes remains fierce. Loudoun's residents have the highest median income in the nation, according to a 2005 U.S. Census Bureau report. Dozens of regional and national banks are popping up all over the county, competing for a piece of the affluent Loudoun pie.
In the last 10 years, the number of individual branches in the county has more than doubled. The amount of money in Loudoun banks has tripled to nearly $3 billion, according to the most recent data available from the Federal Deposit Insurance Corp.
And soon, Middleburg Bank won't be the only Loudoun-based bank. In the fall, a start-up bank, Founders Bank & Trust, will open in Leesburg.
How are banks attempting to attract customers? The name of the game is the personal touch.
“What will end up differentiating banks will be the level of service,” said Alice Frazier, a senior vice-president with BB&T who is the bank's sales and marketing leader within Loudoun County. Until recently, Frazier was the chief operating officer at Middleburg Bank.
In order to survive, banks have to offer the same level of convenience and the same number of products: online banking, remote deposit, and a spectrum of lending and money management tools.
Frazier said that flexibility, local decision-making, and top-notch customer service have made BB&T thrive in Loudoun.
She said she loved her 16 years with Middleburg Bank but left because BB&T offered her the opportunity, she said, of working with a bank that has a community focus, as well as the convenience for customers of offering a multitude of branches.
“The third bullet of our mission statement is make the community where we are located a better place to live,” she said. BB&T, she said, is engaged in the local community and has a corporate structure that allows local decision-making.
An example, she said, was when BB&T provided 3,000 bottles of water for the Leesburg Fourth of July Parade, with BB&T on the label, of course. Also, BB&T sponsored the fireworks in Middleburg and participated in the parade in Purcellville.
Kim McComas, owner of Ashburn-based Stress Free Moves, a moving service just for senior citizens, banks with BB&T.
“It's always easy to get ahold of someone. If there is a problem, you don't have to wait on 'ignore' for a long time.
“That's what I call being 'on hold',” she explained.
The small, but nimble bank
Middleburg Bank, with its $772 million in total assets, has kept pace with the county, growing 2 percent faster than the market.
“Our strategy is to remain competitive in the marketplace ... but not change the culture of a community bank,” said Joe Boling, chairman/CEO of Middleburg Bank.
Boling said his bank offers all the amenities of a larger bank, while maintaining a deeply rooted, authentic connection to the community. He said people choose his bank because its size makes them nimbler, with an ability to respond quickly to clients’ needs.
Compared to larger banks, whose call centers can be located as far away as India, seven people man Middleburg Bank's phones in a second-floor office in Leesburg.
Lee Garland, owner of Purcellville-based Cabinet Showplace, picked Middleburg Bank to handle his business accounts when it opened more than a year ago.
“I've never liked large banks,” he said, adding experience has taught him that when small banks get bought, customer service seems to slide. He said Middleburg Bank has a stellar reputation in the community,
“They are very flexible and give good sound advice,” he said. “I call them every time I have a financial question.”
New player in the market
A newcomer to Loudoun is Arlington-based Virginia Commerce Bank, which recently opened its first branch in Loudoun -- in Ashburn. A second branch will open in Leesburg, in the old Knossos building on East Market Street.
Virginia Commerce is the largest bank headquartered in Northern Virginia, and its commercial lending division is one of its most robust divisions, offering loans to small ethnic groceries to multimillion-dollar developers.
Branch manager Charles Kapur said one major strategy for attracting customers is to reduce the number of fees levied on bank users. But like BB&T and Middleburg Bank, Kapur's bank gives personalized service top priority.
“What Northern Virginia has seen is the growth of larger banks edging in to take a piece of the growing economy,” Kapur said. “What we offer is our commitment to the philosophy of community banking.”
Virginia Commerce is one of eight new bank branches that plan to open in Leesburg in the next two years.
Contact the reporter at akeisman@timespapers.com. Carmen Magana contributed to this story.
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