Until a decade ago, Mary Ann Scully had been with First National Bank of Maryland — later Allfirst — for her entire banking career.
But after M&T Bank Corp. acquired Allfirst Financial Inc. in 2003, Scully went in a new direction. Along with some colleagues and investors, she launched Howard Bank in Ellicott City.
Howard Bank is now in its 10th year of operation and growing, too, partly through acquisition. It recently acquired its sixth branch along with $38 million in assets from Cecil Bank in Harford County. And Howard is opening a new office in Towson later this year.
Scully recently discussed why she took the leap to start a bank, the challenges facing community banks today and how her business customers are dealing with the federal budget cuts known as sequestration.
How did you get into banking?
I entered banking fresh out of a liberal arts education at Seton Hill University, unprepared to do much in the workforce other than learn and work hard. Banks had a well-deserved reputation then for providing great training programs. I took an offer from what was then First National Bank of Maryland, whose training program was more customized than the programs at the two others from whom I received offers. Children do not grow up wanting to be bankers. Most of my colleagues got into the field for similar reasons. Until you enter the field, you have no knowledge of the breadth of divergent paths available to you in a bank, no idea of the constant chance to utilize both right- and left-brained skills, no concept of what having impact means. And it takes years to learn the difference between being a banker and working in a bank. So I never expected to start and probably end my career as a banker. But when I learned all that, I seized the opportunity.
After leaving Allfirst Bank, you started Howard Bank in 2004? Why launch a new bank?
One of the best opportunities I received along the way was the chance to work in a bank mergers and acquisition environment where I really came to understand the dynamics of my own industry — being focused up until then on learning my customers' industries. I realized in that time period, coincidentally at the turn of this century, that community banks in aggregate were eating the lunch of regional banks… capturing the share that larger institutions were losing as they brokered larger and larger consolidations. I also knew from my previous years as a corporate banker that smaller and medium-sized companies were the ones most needing the advice and expertise. So when M&T bought Allfirst in 2003, I decided to put that insight to work and with three colleagues and some local investors started a business-focused community bank in one of the most dynamic regions of the country. As the country lost many community banks in the Great Recession, it turns out we filled even more of a vacuum.
Many experts say banks need to have $1 billion in assets to be able to thrive because of the cost of increasing regulation. Howard Bank has about $414.6 million in assets. Do you agree that banks your size need to get bigger, and if so, how do you plan to do so?
Banks can — up to a point — benefit from scale. This is not to say that smaller banks cannot be profitable and survive. But thriving is different from survival, and relevance is more than profitability. Right now, a rapidly growing bank like Howard needs access to capital markets to supplement the normal returns of the business, and the capital markets in particular want to see banks with at least $500 million to $1 billion assets. At that size, a commercial bank presumably has a broader footprint to serve clients, a larger legal lending limit and certain infrastructure efficiencies to allow them to leverage support functions across a larger group of branch- and nonbranch-based relationship managers. So, believing that, we intend to continue our track record of double-digit organic growth, and supplement it with acquired growth like the acquisition of the Aberdeen branch in Harford County that we just consummated as well as, hopefully, partnering with other local banks seeking that scale and impact.
As head of a bank catering to small- and mid-sized companies, you must hear from your clients how the Maryland economy is faring, particularly with federal spending cuts this year under sequestration. How is Maryland's economy?
We work really closely with our small- and middle-market clients, and we are constantly taking the economic pulse through them. Sequestration is real — people see contracts that were awarded delayed in fulfillment; they see government workforce cutbacks which affect their ability to serve or subcontract with that workforce; they see payment delays. And with each month, they see greater and greater negative impact from those delays and cuts. But the biggest problem really remains the uncertainty about resolution or extension of sequestration. The uncertainty about focus and commitment and direction has become a cancer in our economy, and the small- and middle-market business are its first victims.
You like to travel, and have done so as the former head of Allfirst's international banking group. What would be your ideal vacation?
First, I have never taken a one-month vacation — and have only taken a three-week vacation once — so I would love to get away for a month. Second, I have a wonderful husband and teenage son who do not share my passion for cities but, fortunately, we do have a shared love of the sea. So with all that in mind, I would love two weeks near the water in Europe — either the Lido across the canal from Venice or on the Amalfi coast — and then spend the next two weeks on Kiawah Island near Charleston.
Mary Ann Scully
Title: CEO and chairwoman of Howard Bancorp, parent of Howard Bank
Previous job: Executive vice president, regional banking, Allfirst
Hometown: Indiana and Washington, Pa.
Education: Bachelor's degree in American studies from Seton Hill University and an MBA from Loyola University Maryland
Residence: West Friendship
Family: Husband, Chuck; and son, James Jr.
Hobbies/interests: Travel, reading, running and other exercises, such as Pilates, barre and boot campsrcises, such as Pilates, barre and boot camps