As the oldest bank in Virginia, Alexandria-based Burke & Herbert Bank & Trust Co. has weathered many changes in the Washington metro area. Founded in 1852, the bank precedes the Federal Deposit Insurance Corp. by 81 years. But the bank has had to adapt — while keeping its local community atmosphere — to compete with the influx of national bank branches over the last few years.
“A lot of banks left [the region], but now everyone’s coming back in droves … with a bank on every corner,” said Hunt Burke, president of Burke & Herbert. He has seen the ebb and flow over many business cycles and predicts that in five to seven years, the number of banks might shrink.
“I don’t think there’s enough money to go around. I think we have reached thatpeak,” Burke said.
Some analysts agree the market is oversaturated. The Northern Virginia area is a “thriving” market, said Rich Buckner, managing director of financial institutions at Commerce Street Capital. “You can make a case,” he said, however,” that it’s over-banked.”
But that isn’t stopping Burke & Herbert, which opened its 18th branch last month in Prince William County in Dumfries. A new branch is slated to open around August in Manassas, and the bank recently purchased two more properties in the region.
“We’re very strong in Alexandria and Fairfax County, and we’re trying to get a foothold in Prince William,” said Burke.
The 156-year old institution, the bank of historic figures like Robert E. Lee, has moved to keep up with the times.
“We try to stay technologically competent,” Burke said. “Small banks can have the systems to help them compete,” said Buckner, adding that wasn’t the case only five or 10 years ago.
The bank unveiled a new, more user-friendly Web site last month and recently launched mobile banking access. Roughly 10 to 20 percent of the bank’s customers now use online banking, said Burke.
Burke & Herbert also made remote capture technology available to small-business customers, allowing them to scan in checks for deposit. Next month, the bank will roll out a high-interest rate, Internet-based savings account to compete with similar offers from ING, HSBC and eTRADE.
Like other community banks, Burke & Herbert still stresses the human element.
“People get a kick out of a human being answering the phone,” Burke said.
“We have witnessed a rise in creation and presence of locally owned community banks,” said Ed Schiff, managing partner at Sheppard Mullin who advises the banking industry. “People want to know who their banker is.”
