“I was nervous. Our CFO was nervous,” says B. Doyle Mitchell Jr., recalling the failure of several global financial institutions that marked the dark days of the Great Recession. “If there was a catastrophic domino effect through the financial markets, sooner or later it would trickle down to my community and affect the bank.”
Mitchell, president and CEO of Washington, D.C.-based Industrial Bank (No. 8 on the BE Banks list with $382 million in assets), knew that while the bank hadn’t been involved in the subprime market, there was no way it could remain unscathed. A lot was at stake. Industrial is a third-generation family business that was founded in 1934 by Mitchell’s grandfather, in the midst of the Great Depression. The 49-year-old Mitchell wasn’t about to let it fail now.
But the economic climate at the time of the Great Recession meant nothing was safe. More than 35% of Industrial’s outstanding loans are tied to residential mortgages and home equity lines, 32% are linked to commercial real estate, 20% are with local churches, and 10% with small business loans. As the U.S. continued to hemorrhage jobs, tithing declined in churches, affecting their ability to make loan payments. “We’ve had quite a few problem loans—mostly in commercial real estate—that we’re still working through,” says Patricia Mitchell, executive vice president of sales/operations and sister to the CEO.
Despite these challenges, the bank managed to keep costs low in order to consistently remain profitable—even when the economy was the worst it’s been in a generation. And now, Industrial faces the challenge of increased regulation while eyeing the possible need to consolidate to grow assets and resources.
From Great Depression to Great Recession
In the 1930s, Jesse H. Mitchell was a vice president at Industrial Savings Bank, a black-owned bank that closed during the Great Depression. “So, my grandfather and a few of the people who had been associated with Industrial Savings got together and formed Industrial Bank because there wasn’t any other black-owned bank in D.C. at the time,” says Patricia, a graduate of Drexel University. In the middle of the Great Depression, Industrial Bank opened with $250,000 in assets and 470 shareholders on the corner of 11th Street NW and U, an area in the Shaw neighborhood known as Black Broadway since it was one of the few places where African Americans could go to enjoy nightlife. Over the years, the bank expanded and now has eight locations and 28 ATMs in the Washington, D.C., metro area.
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