Rarely does a top lender at a big bank jump ship to become part of a much smaller team.
But John Mangan, who just left the $126 billion-asset M&T Bank to lead the commercial real estate team at the $2.3 billion-asset Howard Bancorp in Baltimore, likened his move to a carefully timed leap.
“The timing is perfect because there's so much disruption now,” Mangan said.
“Howard worked through some really difficult situations to land where they are now," Mangan added. "They worked through some bad loans they inherited, some bad loans that they booked and they cleaned up the balance sheet. ... Howard is ready to go.”
Mangan has been involved in real estate lending his entire career, initially working as a lawyer in upstate New York before spending two decades at M&T. He relocated to Baltimore in 2006.
Howard is eager to ramp up loan production in commercial real estate. Its CRE portfolio increased by nearly 40%, to $640 million, when it bought 1st Mariner Bank in March 2018. The book has grown by less than 6% since then.
Howard began courting Mangan in May at a convention in Las Vegas, said Robert Kunisch Jr., the company's president.
“At that time, we didn’t talk too much about the opportunity," Kunisch said. "It was more so me just trying to sell him on things we were working on. But we stayed in communication. Any time you’re recruiting a long-term employee away from their current employer, it takes time.”
For Mangan, the decision to join Howard was in large part a realization he could play a more pivotal role at work.
“I’d been doing the same thing for 12 years and thinking ‘I'd like to go someplace where every day I'll make a difference,” Mangan said. “It’s hard to that at a big bank. You’re there every day, but here you really make a difference. From the second you walk in to the second you punch out, you’re doing something that’s really important for the bank. That resonated with me a lot.”
That pitch could help more community banks that want to lure talent from bigger lenders, industry experts said.
“Sometimes bankers want to feel like they’re a bigger part of the equation and not a cog in the machine,” said Joseph Gladue, an analyst at Alden Securities.
Founded in 2004 in Ellicott City, Md., Howard expanded to Baltimore with its deal for 1st Mariner, where Kunisch was CEO. American Banker named Howard Chairman and CEO Mary Ann Scully as a
Howard has endured some missteps since the deal closed. It reported a $3.8 million loss in 2018 due to merger-related expenses and credit quality issues. The company has rebounded, earning $11 million through the first nine months of this year.
Despite the hiccups, 1st Mariner gave Howard the size necessary to make bigger loans and to recruit an executive like Mangan.
“Scale is everything,” Kunisch said, noting that Howard's lending limit now exceeds $30 million. “We would have never been able to attract John to a bank that had a $12 million legal lending capacity.”
A typical commercial real estate loan at Howard ranges from $8 million to $15 million, and Mangan plans to keep targeting those opportunities.
At Howard "all the decision-makers are sitting within 100 yards of each other,” Mangan said. “We can walk around, talk to people and get consensus quickly. … We can approve a deal so much faster, easily within a week if it’s the right deal."
Underwriting will be a critical part of the process, with Kunisch noting that Howard will not “blow up the loan book for growth’s sake."
Mangan "understands the discipline that’s required in lending in the real estate market,” Kunisch added.
Still, Howard is optimistic about its growth prospects, given the disruption in Baltimore tied to industry consolidation.
The area has witnessed several significant deals in the past year, including
“We haven’t seen this type of disruption in a long time,” Kunisch said. “All of that creates unknowns for customers and opportunity for us.”
A CRE effort could also help Howard gain traction in Washington, a move that would make more sense considering Howard's increased lending capacity, Mangan said.
“Our entrée there will come slower,” he said. “As we get bigger, we’ll have more penetration.”
Of course, Washington, like Baltimore, is going through a transition spurred by bank deals, Gladue said.
“I wouldn’t discount it as only a long-term strategy” for Howard, Gladue said. “I would suspect if they had a chance to talk to some people that they’d seriously consider" hiring lenders.
Howard is open to additional hires, though it approaches the process cautiously, Kunisch said.
“We really empower our people to go out, be decision-makers and have meaningful conversations with clients," Kunisch added. "You’ve got to fit that criteria. ... If we found the right team in D.C., we'd go there tomorrow.”
