Founders to target small firms, use down-home style


September 10, 1993|By David Conn | David Conn,Staff Writer

EASTON — The names of two officers of Easton Bank & Trust Co. were transposed in a caption in yesterday's business section. Chairman W. David Hill appeared on the left and President and Chief Executive Officer Thomas P. McDavid on the right.

The Sun regrets the error.

EASTON -- From the outside, the Easton Bank & Trust Co. building, a quarter-mile off U.S. 50, looks like the kind of bank they don't build anymore: white, classic and stately, with a couple of Doric columns framing the doorway.

Look closer and there's a cornerstone near the right column that gives away a secret: "1993," it says. July 1993, to be exact.


The founders of Easton Bank & Trust, in the middle of a plodding economic recovery, and with many banks more concerned about merging than making loans, have managed to do what nobody else in Maryland has done in 3 1/2 years. They've opened a commercial bank.

"We're a brand-new alternative," beams W. David Hill, the company's 51-year-old chairman, founder and largest shareholder, with about 8 percent of the shares. A dentist by training, Dr. Hill owns the William Hill Manor nursing home and retirement village in town, and recently opened a handful of car washes on the Eastern Shore and in the Baltimore area.

There is a small "minibranch" of the bank inside the main building of William Hill Manor; practically a stone's throw away is the new headquarters building.

Inside, it has money-green carpeting, deep brown wooden counters off the lobby and green marble everywhere else. A winding stairway leads up to the currently vacant second floor. A couple of Federal Deposit Insurance Corp. examiners send employees scurrying for files as part of the bank's first-ever routine examination.

President and Chief Executive Officer Thomas P. McDavid, 52, in short sleeves and tie but no jacket if he can help it, seems happy and relaxed to be away from the big city. He was a top officer at Signet Bank/Maryland in Baltimore until late 1990 when Signet shut down the small-business lending division he ran.

Since mid-1991, when he signed on with Dr. Hill, Mr. McDavid has been helping to organize and sell stock.

And though the real estate market, which dominates bank lending in Talbot County, is still in the dumps, the 20 or so organizers of Easton Bank were able to sell $5.6 million worth of stock to 650 mostly local investors earlier this summer, at $10 a share.

In the two months since the company opened its doors, the bank has attracted $3.6 million in 477 deposit accounts, made $500,000 in loans and has another $2 million in loans about to be approved.

The quick start is due in part to Easton Bank's local personality, Dr. Hill contends, and the fact that many other banks have alienated their customers lately in the drive to consolidate and squeeze out marginal loans.

It was partly the turmoil in the market that convinced the Atlanta consulting firm Strategic Banking Solutions Inc. to take on Dr. Hill and his co-founders, according to SBS President Byron Richardson. Maryland National Bank was suffering through its dog days, Signet had shut down its small-business lending division, and Second National F.S.B. was limping toward a federal takeover last year.

SBS conducted a feasibility study and helped the bank's founders get through the regulatory maze.

"If there's a little bit of chaos in the state banking industry where the large banks are having some trouble, or if there's a potential buyout, that creates some uncertainty in the market," Mr. Richardson says. So "there's a good reason for people to change their banking business."

Which is all well and good if there's any business to switch. W. Moorhead Vermilye, president and CEO of rival Talbot Bank of Easton, admits the market is a little soft.

"I think Talbot County's a good thriving county. [But] I think we're suffering as most of Maryland is from continuing recession," and particularly from the real estate market doldrums, says Mr. Vermilye, whose company has two branches, $225 million in assets, and about 40 percent of the commercial bank deposits in the county.

While they acknowledge the dominance of real-estate lending -- up to 70 percent of most Talbot banks' portfolios, says Dr. Hill -- the Easton Bank officers are hedging their bets. Their target audience is the 1,800 small businesses in the county, which had a population of about 30,000 in 1990 (up 20 percent from a decade earlier). Talbot County is Maryland's second most affluent, and its 5 percent July unemployment rate was lowest on the Eastern Shore and among the state's lowest.

More importantly, Easton has one of the biggest health care communities in Maryland. There's William Hill Manor, Memorial Hospital with its 1,100 employees, and dozens of small physician practices that have grown up around the two facilities.

Easton also is home to several large manufacturers, including a Black & Decker plant that employs 800; Allen Family Foods, a poultry company, with about 600 employees; and a Waverly Inc. printing plant, with another 480 or so.

Still, no one will mistake Easton Bank for NationsBank. The company will stick to consumer and small-business lending, Mr. McDavid assures, and it is starting slowly. "We still have some widgets to fix. Seems like the ATM machine breaks down every other weekend."

To demonstrate the bank's local flavor, on Friday evenings it offers a complimentary spread of hors d'oeuvres in the lobby.

It's a time for folks to sit around and talk, and at the very least Mr. McDavid says he hopes customers will spread the word:

?3 "Not a bad bank, but they've got great shrimp."

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