When $116 billion-asset, Winston-Salem-based BB&T bank ? which has 54 branches in the Baltimore metropolitan area ? announced in January that it would no longer finance eminent domain-based commercial development, it was a principle-based gesture of BB&T Chairman and CEO John Allison, said bank spokesman Bob Denham.
“There?s no way that either John [Allison] or anybody else had any idea how this would turn out,” Denham said, noting that the bank?s board was equally bold in approving the proposal. “But the impact has been very positive, not negative.”
Denham, who cited Allison?s interest in philosophy and the CEO?s distress over the U.S. Supreme Court?s 2005 ruling in favor of the practice as inspiration for the move, said that BB&T lost one multimillion dollar account as a result of thepolicy.
But, he noted, “thousands and thousands of new accounts” have been added as a direct result of the well-received action.
“The policy was announced in January,” Denham said, “and in February we had more net new accounts posted than in any previous month in the bank?s history.” Asked how many accounts that represented for the 134-year-old, 1,400-branch bank, Denham replied 16,462 ? as compared with 10,611 in February 2005 and 11,197 in January 2006.
“I personally have received probably 30-40 media inquiries and probably another 30-40 inquiries and comments from individuals telling me how much they appreciated the stand,” Denham said, explaining that many inquiries were from outside the bank?s operating area, asking for local locations of BB&T branches.
One correspondent even imparted that he had purchased $25,000 in BB&T stock in solidarity with the policy.
But despite favorable commercial and public relations response to BB&T?s go-it-alone policy, no other commercial bank in the 9,200 bank industry appears to have followed its lead.
Of two Maryland-based banks queried on the subject, Mercantile Bank and Trust spokeswoman Janice Davis said the bank had no policy and Provident Bank did not respond by press time.
Asked if they were aware of another commercial bank imitating the practice, both American Bankers Association Senior Economist Keith Leggett and Maryland Bankers Association President Kathleen Murphy said no ? and calls to both the Mortgage Bankers Association and the Consumer Bankers Association turned up no names.
BB&T has a commercial loan portfolio of $40 billion, which, Denham conceded, never represented much eminent domain lending.
