Interview: Brian Reid, President Raleigh, TowneBank

Branching out

While the industry trend is toward fewer physical branches, not all banks are scaling back

Brian Reid

President, Raleigh – TowneBank

How has the pandemic forced the bank to rethink its branch strategy? The evolution to digital-only banking will take at least 1520 years to complete but we’re undeniably headed in that direction as an industry. By design, we have relatively few offices in North Carolina but we believe that our physical footprint is still important and valued by our clients. We plan to build five to seven new offices throughout the Greater Triangle, Charlotte and Triad regions during 2021 and beyond. We will have a limited but very strategically located branch offering (main corridors).

How is technology changing the banking sector? Fintech is going to start competing directly with banks. The changes and innovation, like online transfers and stock trading, are going to continue to accelerate. Banks need to adapt and integrate the new technology into their core systems to allow their clients to access the full range of products and services digitally.

How do you expect the real estate sector and mortgagelending side of the business to perform in the next year? Banks have more cash on their balance sheets than ever because of the uncertainty caused by the pandemic. The real estate market had distinct winners (warehouse, residential and multifamily) and losers (hotels, retail centers and office) during 2020 and into 2021. The first half of the year will still be relatively light in terms of economic activity and capital investment for owne- operated companies (commercial and industrial entities). We anticipate an uptick as the pent-up demand from the past year starts to flow into North Carolina in 2H21 and into 2022.

We closed just over $6 billion in residential mortgages last year and while activity will still be robust in 2021, I don’t think it will be as busy this year due to a lack of supply for potential residential homebuyers, less demand for refinancing and a projected mortgage rate increase during 2021. It’s a sellers’ market as there is just not enough supply right now.

What are the bank’s main goals and objectives in the next year? We want to increase our footprint and serve the community in an intimate and unique way. We are large enough to handle the complex corporate relationships but our typical target market from a business development perspective is midmarket companies with $5 million to $100 million in annual revenues and real estate developments with borrowing needs between $1 million and $25 million. We want to provide solutions for the people and businesses in our community — that’s what gets us up in the morning.