A bountiful harvest
April 29, 2005

Rachael Golden/The Gazette

HarVest Bank President John Hollerbach, who's experienced the highs of his business career like working on Park Avenue in New York City as well as the lows of being downsized and out of a job, says on perseverance: "Good or bad, I've never been a quitter. I tend to fight like hell no matter what the situation."

John Hollerbach is reaping the rewards of persistence and hard work

How is life at the top for a new bank president?

Talk to John Hollerbach, president of HarVest Bank of Rockville. He and his team of partners and investors raised almost $12 million last year, opened the bank in November and have seen it accumulate nearly $30 million in assets.

But Hollerbach's journey to where he is today has not been problem-free. He's seen ups and downs, such as having his job eliminated a couple of times through corporate upheavals and most recently venturing into the dot-com industry with unprofitable results.

"At the time I thought I'd investigate all the excitement going on over in Northern Virginia and I got involved with a dot-com," Hollerbach said. "There were a lot of well-meaning people, good people, but it just didn't make it -- burned through the cash and didn't make it. Then I went with another one and they struggled and didn't make it.

"So here I am with this perfectly orchestrated career resume, major companies, banks, and then run into this wall. It was very hard and I think you learn from experience, that you are a better person for whatever you go through."

Hollerbach, 52, picked himself up, went back into business for himself and developed a strategy for getting back into the banking industry, big time. The Business Gazette talked to Hollerbach recently about his early years, how HarVest Bank came about and what the goals are for the bank.

What did your dad do? Was he in business?

I grew up in a blue-collar family in northern New Jersey. My dad was a mechanic, he worked for a construction company, kind of ran the equipment yard for this construction company. My mom worked on an assembly line in a plastics plant. I was always watching how hard they worked to create opportunities for us, for our educational background, so I always looked to do my best academically and as an athlete.

You started in business as an accountant?

Yes, but I was also studying for my MBA and I worked in support of marketing, in new product development functions, rather than being a bean counter.


Who did you work for?

I was with Lever Brothers, Bristol Myers and Paramount Pictures, working on everything from television shows to bar soap to hair coloring and hair dryers. It was very interesting and stimulating for a young person to be involved in, being in a support role, but being part of developing a solution to a problem, in this case solving a consumer's problem. They needed a product to answer a need. So I saw that whole sales and marketing and product development effort, which dovetailed nicely with my technical training.

Then Citibank was attracting people with consumer product backgrounds in the early 1980s to kind of come in and de-commoditize banking products, so that experience that I had as accountant, with an MBA in finance, but also with this marketing overlay, played very nicely for me with Citibank. I went to work for them for the better part of five years, in the credit card businesses. I traveled around the country, working on their internal reporting and analysis. I came down to Baltimore in 1985 to work on their Choice card business.


Then you decided to move to Maryland?

Yes, and worked for Citibank in Towson on the Choice card, and was involved in the startup of the Citibank Maryland Choice franchise.

But we determined that the Choice credit card just wasn't capable of competing in the long run with Visa and Master Card -- it was just too small. So that business was folded up and it became a Choice-branded Visa card, and was repositioned as an entry card for people who had had bad prior credit.

So, faced with a chance again to relocate back to New York, and take another role there [with Citibank], I ended up meeting the CEO of Maryland National Bank, who invited me to come and join them, and I worked on the Equitable [bank] acquisition. It was more good experience, another part of banking, working in the comptroller's division. But then with the changes in the banking industry there was stress on Maryland National's balance sheet. As the company began disintegrating there was a downsizing, and I had to leave.


So you went into business for yourself?

Yes, that was the first time I hung up my shield as an independent CPA. Pretty quickly my biggest client became a group of people who were forming a dissident shareholder group to challenge the existing board of the Bank of Baltimore. Eventually there was a proxy contest and a movement that succeeded in unseating the board. There were problems in the financial statements we felt weren't being addressed in a forthright way.

We took over the company and as it turned out it was a case of be careful what you ask for, because soon we were hit with three regulatory orders to fix all of the problems that we had raised in the proxy contest. So now we're sitting in management seats, and we have the shareholders to answer to and I became corporate controller and the point man for resolving those regulatory orders which we negotiated with FDIC, the state of Maryland and the [Board of Governors of the] Federal Reserve. We ended up selling the bank to First Fidelity Bank of New Jersey for about seven times what it was worth in 1991. When we sold, it was about $21 a share, from about $3 a share when we took it over.


Where did you go then?

I took a job as CFO of Poole and Kent in Baltimore, approximately a $400 million mechanical and general contractor. While I was there I got very involved in a lot of major deals, including working with a contractors group which helped to build and fund Ravens Stadium, with Poole and Kent doing the air conditioning and plumbing. I helped arrange the government parts of the financing for the stadium.


Later you worked with some dot-coms, then went back to consulting?

Yes, and things were going pretty well. But during the course of this time I was looking at all the bank merger activity. And having been through situations from very large Citibank to medium-size Maryland National, and Bank of Baltimore, to a larger First Union, to a small Cardinal Bank, I thought there's a different way to do this. You watch this activity and these big banks come take over these small banks, and they displace a lot of people, and they don't typically do a good job in retaining the customers and making those customers feel good about what they are doing.

My theory was, if I could find the right situation in terms of a focused business plan, a focused geography, the right partners, you could build a good strong infrastructure ... and a good strong credit culture. You don't lead with the loan products, you lead with deposit products, and if you bring in a bunch of seasoned partners who represent the businesses you want to serve, you can bring in deposit business, and you can make money on deposits.

So I was doing some work with some investor groups and I run into John Holaday [former CEO of Rockville biotechnology company EntreMed], and he's lamenting the absence of banks that serve these technology companies and government contracting companies here. And bells kind of went off. Here it is, here is the opportunity. This is the geographic area, it's concise, with the 270 corridor, and the technology, life sciences, medical community and there was a heavy concentration of people who were prominent in those industries from where we could put a team together.


Where did the name HarVest come from?

As John and I talked, this Maryland theme had become prominent, we were looking for a theme that evoked Maryland, something with a down home feel.


What's been the breakdown of your clients?

So far the significant traction has come in the early stages from the legal and real estate communities and from the medical community. We are just beginning to get more traction in the technological community.

We will be above our business plan for first quarter results, and we are on track profitability wise. We're planning to open in Germantown in the fall, North Bethesda next year, Howard County by early 2007 and also work our way up the 270 corridor to Frederick in a couple of years.


So, are you building the bank up to sell it to a big banking company in a few years?

No, we did not start this bank to sell it. We started it to fill a very obvious need, to build a Maryland-based bank that caters to the business community, that understands the needs of its customers in Maryland, understands what it's all about to be part of Maryland. We fully intend to be a predominant player within the next decade that happens to be a bank based in Maryland. Our investors knew that ... this is not a five-year turnaround to build it and sell it ... if you want to do that, go talk to one of the other banks. That's not our model.


What lessons have you learned that you would share with a young person going into business?

You can never stop believing in yourself. There might be a temptation where you get knocked down and want to do that. [But] also, do not be afraid to admit you are wrong. And get involved in community in a big way, make friends, make relationships, because those will pay off in a big way.

And you don't have to apologize for where you came from. My grandfather was a coal miner and my father was a mechanic and I'm a bank president. If you have an energy level and you got some intelligence and focus and dedication, you can succeed in this country.