Blue Harbor Bank sets sail with high-rate account

Jim Marshall may very well be in the right place at the right time with the right products.

The CEO of Blue Harbor Bank picked the heart of new Mooresville-Morrison Plantation, where household incomes continue to soar, making it the wealth capital of Iredell County.

Morrison Plantation, a massive mixed-use development, is just now coming into its own as a shopping and leisure destination after four years of construction. As a new bank, with no baggage on its books, Blue Harbor doesn't have a single sub-prime loan on its books.

"We're not being distracted by working through problem loans," Marshall says. The bank organizers, who include Kelley Earnhardt Elledge of motorsports fame; Abigail Jennings, CEO of Lake Norman Realty Inc.; and super-builder Phil Gandy of Gandy Communities, picked a good time to launch a publicly held, local bank.

Agreeing that parts of the nation are in recession, Marshall says Lake Norman seems to be a different animal altogether. "Household income levels are off the charts. The growth for this area will continue, in light of Lowe's Home Improvement and related industries," he says.

Indeed, would-be investors over-subscribed the public offering, which raised $21 million in capital. Checks were shipped back to disappointed buyers, according to Jan Hollar, the head of investor relations at the bank, which has its official grand opening April 1, complete with a blue grass band.

The bank also seems to have a product that is timed correctly to the marketplace.

While it will focus on retail lending, including home equity loans, and commercial loans, including those backed by the Small Business Administration, Blue Harbor has come out with a unique account that pays a much higher interest rate on checking accounts. Known as the Neon Blue account, it looks like it will compete aggressively with small CDs at other institutions.

"We have dissected other accounts internally, and come up with something new so that customers can be happy with it," Marshall says. "The product by design is to always be at a very attractive rate, not a teaser rate."

What Marshall is doing is paying an eye-opening 5.25 percent on checking accounts-with balances as high as $30,000-that utilize direct deposit and Blue Harbor's own debit card.

Built around internet banking, the product features an electronic statement that is printed out at home and a minimum of 15 debit card transactions each month.

Debit cards generate a fee valued at about 1 percent of the transaction amount. Ordinarily, issuers of debit cards use the fee as part of their overall cost structure.

With 15 debit card transactions each month, Neon Blue generates enough fee income to pay the higher rate. At the same time, there are costs benefits around not servicing at least 15 checks a month.

Marshall says customers are converting from using credit cards to Neon Blue to get the higher rate-rather than trying to amass Frequent Flyer Miles, for example.

"You don't have to have a checking account, money market account and savings account or CD," he says. "Neon Blue has it all rolled into one."

With balances over $30,000, the rate drops to 3.05 percent.

The untraditional approach is the bank's hallmark. Customers can buy postage stamps at the bank's drive-up window. There are bowls of water set out at the front door each morning for patrons' dogs, and the lobby looks more like a living room than a bank.

In fact, the bank's sprightly web site flashes this on a regular basis: "So much for velvet ropes and free toasters. Introducing the end of the big, out of town, uninspired bank." It's in white letters on a purple field.

"We want to shake it up a little bit," Marshall says.