Cardinal Bank

Cardinal Bank was a Virginia-based community bank headquartered in McLean and focused primarily on Northern Virginia. It operated as the banking subsidiary of Cardinal Financial Corporation, a bank holding company established in November 1997. The institution opened its first branch in McLean in June 1998 and developed a regional business model centered on commercial banking, residential mortgage lending, and wealth-management services. The bank’s early years were difficult. Its community-bank strategy required a relatively complicated administrative structure, and Cardinal Financial recorded cumulative losses of approximately $24 million during its first five years of operation. The organization responded by consolidating its banking units, changing senior leadership, reducing its workforce, and recognizing losses associated with earlier investments. Bernard H. Clineburg, recruited after serving as chief executive of George Mason Bank, became Cardinal Financial’s chief executive in October 2001 after founding CEO L. Burwell Gunn resigned. Clineburg combined four banking units into one and reduced staff as part of a restructuring program. Cardinal expanded its capabilities through acquisitions and subsidiary development. In 1999, Cardinal Wealth Services began operating as an investment-advisory subsidiary. Cardinal Financial purchased Heritage Bancorp of Fairfax in 2000, although the acquisition later resulted in an $8.3 million write-off. In 2004, it acquired George Mason Mortgage from the Virginia unit of United Bankshares, strengthening its mortgage business. In 2014, Cardinal Financial acquired United Financial Banking Companies, the holding company of The Business Bank, based in Vienna, Virginia, for approximately $51.7 million. The company also raised capital through public stock offerings during its development. Cardinal Financial sold 2.6 million shares at an initial price of $10 per share in July 1998, raised $18.5 million through a $3.50-per-share offering in May 2002, and raised a further $31 million through the sale of four million shares at $7.75 per share in May 2009. These figures relate to the holding company rather than necessarily to the Cardinal Bank operating subsidiary. By the 2010s, Cardinal’s activities covered commercial banking, mortgages, and wealth management. The organization introduced a middle-school banking program in Fairfax County in 2010. In 2012, the U.S. Department of Justice concluded an investigation into alleged lending discrimination and stated that it did not intend to file a lawsuit against the bank. Cardinal also revised a Washington Metro advertisement in 2012 after members of the public confused its logo with the logo of the St. Louis Cardinals baseball team. Cardinal Bank ceased to operate as an independent banking organization after United Bank acquired Cardinal Financial in April 2017 in a transaction valued at approximately $912 million. The acquisition ended Cardinal’s independent corporate identity, although its banking, mortgage, and wealth-management operations formed part of the transaction.

Cardinal Financial Services was formed in November 1997 as a bank holding company, with John H. "Jack" Rust, Jr. serving as chairman. The first Cardinal branch opened in McLean, Virginia, in June 1998. In July of that year, the holding company sold 2.6 million shares at an initial price of $10 per share. Cardinal broadened its financial-services platform in 1999 by beginning operations of Cardinal Wealth Services as an investment-advisory subsidiary. The company pursued regional growth in 2000 by purchasing Heritage Bancorp of Fairfax for approximately $13.8 million. The expansion came while Cardinal was struggling to achieve profitability. During its first five years, the company accumulated losses of about $24 million, in part because the administrative infrastructure required by its community-bank model was expensive to maintain. In 2001, Rust recruited Bernard H. Clineburg, previously chief executive of George Mason Bank. Clineburg became chief executive in October after the resignation of founding CEO L. Burwell Gunn. Clineburg initiated a significant operational restructuring. He consolidated four separate banking units into a single organization and eliminated 33 of the bank's 135 positions. Cardinal also recorded an $8.3 million write-off related to its 2000 Heritage Bancorp purchase and recognized a $1.7 million loss on a WorldCom corporate bond. The company raised $18.5 million in May 2002 through a stock offering priced at $3.50 per share. Cardinal expanded its mortgage capabilities in July 2004 by acquiring George Mason Mortgage from United Bankshares' United Bank-Virginia unit for approximately $17 million. It later raised $31 million in May 2009 through the sale of four million shares at $7.75 per share. In April 2010, it launched a banking program for middle-school students in Fairfax County, extending its community-banking identity into financial education. Regulatory and public-relations matters also formed part of the bank's later history. In May 2012, the U.S. Department of Justice concluded an investigation concerning lending discrimination and announced that it did not intend to file a lawsuit. That same year, Cardinal revised an advertisement displayed in the Washington Metro after residents confused its logo with the logo of the St. Louis Cardinals. Cardinal Financial continued its regional consolidation strategy in January 2014 by acquiring United Financial Banking Companies, the holding company of Vienna-based The Business Bank, for approximately $51.7 million. The transaction broadened Cardinal's business-banking presence in Northern Virginia. In April 2017, United Bank acquired Cardinal Financial for approximately $912 million. Following the transaction, Cardinal Bank no longer existed as an independent banking organization.

1. 2017Acquired by United Bank

   United Bank acquired Cardinal Financial for approximately $912 million, ending Cardinal's independent existence.

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2. 2014United Financial Banking Companies acquired

   Cardinal Financial acquired the holding company of The Business Bank for approximately $51.7 million.

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3. 2010Fairfax County middle-school banking program launched

   The company introduced a banking program for middle-school students in Fairfax County.

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4. 2004George Mason Mortgage acquired

   Cardinal Financial bought George Mason Mortgage from United Bankshares' Virginia unit for approximately $17 million.

   Source
5. 2001Operational restructuring begins

   Bernard H. Clineburg became chief executive, consolidated four banking units, and reduced the workforce by 33 positions.

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6. 2000Heritage Bancorp of Fairfax acquired

   Cardinal Financial purchased Heritage Bancorp of Fairfax for approximately $13.8 million.

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7. 1999Wealth-management subsidiary begins operations

   Cardinal Wealth Services began operating as the company's investment-advisory subsidiary.

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8. 1998First McLean branch opens

   Cardinal opened its first bank branch in McLean, Virginia, in June.

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9. 1997Cardinal Financial Services is established

   Cardinal Financial Services was founded as a bank holding company in November, with John H. "Jack" Rust, Jr. as chairman.

   Source

A Northern Virginia community bank serving commercial, mortgage, and wealth-management customers through a regional branch network.

• Commercial bankingBusiness banking

  Cardinal's commercial-banking business served companies and other regional customers through its Northern Virginia community-bank network. The available source identifies commercial banking as one of the institution's three principal operating segments, alongside mortgages and wealth management, but does not provide a detailed product catalogue.

• Mortgage bankingResidential mortgage lending2004

  Mortgage lending was a core Cardinal segment and was reinforced by the 2004 acquisition of George Mason Mortgage. The business formed part of Cardinal's broader regional financial-services offering.

• Wealth managementInvestment advisory1999

  Cardinal Wealth Services operated as Cardinal's investment-advisory subsidiary beginning in 1999. It represented the wealth-management component of the bank's three-part operating model.

• 2012Washington Metro advertising revision

  Washington metropolitan area

  Cardinal revised a Washington Metro advertisement after the public confused its corporate logo with the logo of the St. Louis Cardinals.

  Outcome. The advertisement was revised; the available source does not specify the precise creative changes.

  Source
• 2010Fairfax County middle-school bank program

  Fairfax County, Virginia

  Cardinal launched a banking program for middle-school students, extending its community-bank positioning into local financial education.

  Source

• 2017Acquisition by United BankM&A

  Cardinal Financial was operating as a regional banking company with commercial-banking, mortgage, and wealth-management activities.

  What changed. United Bank acquired Cardinal Financial.

  Aftermath. Cardinal ceased to operate as an independent bank and its corporate identity was absorbed into United Bank.

  Transaction value. $912 million (April 2017)

  Source
• 2014Acquisition of United Financial Banking CompaniesM&A

  Cardinal pursued regional expansion and sought to strengthen its business-banking presence in Northern Virginia.

  What changed. Cardinal Financial acquired United Financial Banking Companies, the holding company of The Business Bank.

  Acquisition price. $51.7 million (January 2014)

  Source
• 2004Acquisition of George Mason MortgageM&A

  Cardinal sought to expand its mortgage-banking capabilities within its Northern Virginia financial-services model.

  What changed. Cardinal Financial Services purchased George Mason Mortgage from United Bankshares' United Bank-Virginia unit for approximately $17 million.

  Acquisition price. $17 million (July 2004)

  Source
• 2001Consolidation of banking units and workforce reductionStrategy

  Cardinal had experienced substantial losses during its first five years, partly because of the cost and complexity of its community-bank administrative structure.

  What changed. New chief executive Bernard H. Clineburg combined four banking units into one and eliminated 33 of 135 positions.

  Aftermath. The restructuring was accompanied by an $8.3 million write-off related to Heritage Bancorp and a $1.7 million loss on a WorldCom corporate bond.

  Source

• 2017United Bank acquires Cardinal Financial

  United Bank acquired Cardinal Financial in a transaction valued at approximately $912 million, ending Cardinal's independent operation.

  M&A
  Source
• 2014Cardinal Financial acquires United Financial Banking Companies

  Cardinal Financial acquired the Vienna, Virginia-based holding company of The Business Bank for approximately $51.7 million.

  M&A
  Source
• 2012Justice Department ends lending-discrimination investigation without planned lawsuit

  The U.S. Department of Justice concluded an investigation into lending discrimination and stated that it did not intend to bring a lawsuit against Cardinal.

  RegulationOther
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• 2012Cardinal revises Washington Metro advertisement after logo confusion

  The company changed a Washington Metro advertisement after local observers confused Cardinal's logo with the emblem of the St. Louis Cardinals.

  Campaign
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• 2004Cardinal Financial acquires George Mason Mortgage

  Cardinal Financial Services purchased George Mason Mortgage from United Bankshares' Virginia unit for approximately $17 million.

  M&A
  Source

1. Cardinal Bank