A local bank has trimmed its branch count to the north and west of Richmond.
Henrico-based Essex Bank in recent months shuttered two of its retail locations: one in Cumberland and one in Fairfax.
The Fairfax location had opened in 2016 and was the bank’s attempt to increase its presence in the Northern Virginia market, where it already had a loan office and branches nearby in Maryland that it inherited via acquisition post-recession.
CEO Rex Smith said that area of Northern Virginia proved a bit crowded and couldn’t match the production it was seeing in its Maryland territory.
“It’s extremely competitive up there right now,” Smith said of the Greater Washington, D.C. area banking market. “You’ve got some banks that did some big mergers and spent some good money on acquiring branches and deposits.”
The bank decided to close the Fairfax outpost at 10509 Judicial Drive when its lease came due.
“It’s never easy to say you’re going to close a branch, but for that one we’d need to open probably four to five other branches (around Northern Virginia) just to try to stay competitive and have enough density,” he said. “We still need to add density in some of the other markets we’re sizable in, like Richmond, Lynchburg and Eastern Maryland.”
Smith said the bank moved its Fairfax loan officer to its branch in Bowie, Maryland, and was able to retain around 70 percent of the deposits from its Fairfax customers.
The Cumberland branch, which opened at 1496 Anderson Highway just west of Powhatan County in 2017, was more of an experiment, Smith said, with a relatively low cost starting out. The goal was to try to capture traffic between Powhatan, Farmville and Lynchburg, the latter being a market where Essex has since opened two branches.
“Cumberland at the time, it was a cheap entry,” he said, adding the bank made the move by buying an old BB&T branch that had been vacant. “We thought it might be a good situation to get some folks between Farmville and Lynchburg.”
In the end, the deposit growth wasn’t what the bank had hoped, so Smith said they decided to let it go.
“We usually give them about three years to see what kind of deposit base they could acquire, and it got to the point it wasn’t cost-effective,” he said.
The bank has since put the Cumberland building up for sale with an asking price of $415,000, according to a marketing flier. Brokers Kerry Riley and Coleman Stewart have the listing. It paid $265,000 for the building in May 2016.
Essex now has 18 branches in Virginia in Maryland, as well as two loan offices in Lynchburg and Timonium, Maryland.
The bank turned a profit of $7 million through the first six months of the year, up from $6.3 million in the same period last year. It had $1.21 billion in deposits at the end of June, up from $1.16 billion last year. It had $1.05 billion in loans as of June 30, up from $1.02 billion at the same point in 2018.