District-based Industrial Bank, feeling the squeeze of increased regulatory costs and competition from non-bank financial companies, plans to sell a number of buildable lots across D.C. as part of a plan to rake in some growth capital.
The lots, including a roughly 30,000-square-foot development site just a few hundred feet from the Benning Road Metro station, can help Industrial Bank reach a more sustainable size, which CEO and largest shareholder B. Doyle Mitchell pegs at $800 million in assets, or nearly double the bank’s current assets. In recent years, the minority-owned bank — the only one in the D.C. area and one of a few nationally — has seen slow asset growth, limited profits and poor shareholder return ratios that Mitchell said can be reversed or offset through the efficiencies of scale that come from being a larger bank.
“There is a general feeling around the country that community banks need to be larger in order to survive,” Mitchell said, adding that Industrial can use the added funds to overhaul its technology and build its customer base. “We have enough overhead and enough infrastructure now to handle a larger asset size.”
And yet, Industrial also faces a long-standing challenge: It is harder for black-owned banks to access and benefit from capital markets, Mitchell said. That explains the real estate route — offering up land it owns for sale when values and demand are high, offering an attractive alternative. The parcels for sale now are only some of those Industrial Bank owns across the city.