Growth strategy has been right for bank CEO
I thought of banking as geared toward accounting and a green-visor job,” United’s 69-year-old chairman and chief executive said. Once I got in there, I realised it’s all about people. It was a lot more exciting than I thought. Richard M. Adams Sr., United Bankshare’s chairman and CEO
WASHINGTON: Richard M. Adams Sr. announced this month that United Bankshares was buying Cardinal Bank for US$912 million (RM3.6 billion), creating the 32nd-largest bank in the United States. Which is kind of ironic, since he didn’t want to be a banker in the first place.
“I thought of banking as geared toward accounting and a green-visor job,” United’s 69year-old chairman and chief executive said. “Once I got in there, I realised it’s all about people. It was a lot more exciting than I thought.”
Adams took over a onebranch bank in Parkersburg, West Virginia, at the tender age of 29. He has grown it into a powerful community bank in the Washington metropolitan area.
More significant - to me, anyway - is what he has accomplished with United’s dividend: The financial company has increased its payout for 42 consecutive years. The dividend currently pays US$1.32 annually, a comfortable yield of 3.4 per cent at today’s share price. Such consistency makes United part of the select group of dividend aristocrats.
“We all have a purpose,” Adams said. “My purpose was to build a very successful regional banking company and make a difference in people’s lives.”
He made a difference if you were smart enough to buy US$100,000 of United stock when Adams took over as president in 1976. As of Dec 31, 2015, that US$100,000 would have grown to US$11.3 million, including dividend reinvestment, according to the company’s annual report.
The deal maker has done it through 31 acquisitions, starting in 1982 with the take-over of Union Trust National Bank. The bank now has 129 offices from Ohio through Pennsylvania and West Virginia and winding through Virginia, Maryland and the District. The company emphasises that it has dual headquarters in Charleston, West Virginia, and Tysons Corner.
United has US$14.3 billion in assets and will hit US$20 billion when it swallows Cardinal this year. The number of employees should increase from 1,700 to about 2,000.
“It’s almost a miracle that you could come out of Parkersburg, West Virginia, a US$100 million bank, and build it into the 32ndbiggest bank in the nation and dominant community bank in the nation’s capital,” Adams said.
Adams graduated from West Virginia University in 1968 with a bachelor’s degree in political science. After a year in the Army Reserve and as a management trainee at Wachovia Bank in Winston-Salem, North Carolina, he joined his father’s bank in Parkersburg. At the time, the Parkersburg National Bank was the 12th-largest in West Virginia.
Adams began as an assistant cashier and then helped start the bank’s credit-card business, because he had worked on that at Wachovia.
Adams quickly became involved in other parts of the bank’s business, including finding the next generation of executives to take over. Three of them have stayed with the company and helped him grow Parkersburg/United into a powerhouse.
The assignment also embedded in Adams the importance of finding and hiring the best talent. Some members of his core brain trust have been with him for more than 40 years.
He grew to love the banking business and took an intensive course, sponsored by the American Bankers Association, to dig more deeply. “It was a good learning process,” he said.
A couple of years after his father, who was president of the original Parkersburg bank, died in a car accident, Adams took over. It was 1976. — WPBloomberg