The head of a struggling local bank has stepped down.
Merlin Henkel, the former president and chief executive of Virginia Business Bank, has been replaced by Terrie G. Spiro, an executive with decades of experience at regional banks in the mid-Atlantic.
Late last month, federal and state regulators required the privately held bank to submit a lengthy list of protocols that they hoped would help turn the bank around. (Read more about that here. ) One of those was an analysis of management, and it’s possible that a new chief executive is meant to remedy that request.
The bank is the second one in the past three years in Virginia to require a survival plan.
“We’ve had some things to correct,” said Frank “Bunky” Miller, the chairman of the board. “We hope [Spiro] is going to correct them.”
Joe Face, Virginia’s commissioner of financial institutions (part of the State Corporation Commission), said the agreement did not specify the type of management change required. “The board is taking whatever steps it deems appropriate,” he said.
Face said Virginia Business Bank has been in close contact with the SCC, providing weekly and sometimes daily updates.
“We’re working on the processes and procedures and addressing the liquidity and capital in the loan portfolio,” Spiro said. “I think the agreement is a clear road map of what the board and management team and employee base committed to doing before I came aboard.”
Spiro, 53, helped start Tysons National Bank in the early 1990s and was president and chief executive of Heritage Bank, both in Northern Virginia. Most recently she was a regional president of First Tennessee.
“I was contacted by folks on the board who asked me to come talk to them,” said Spiro, a Jacksonville, Fla., native. “I came away extremely impressed at the board and the members of the management teams’ commitment to creating a healthy and bright future for this organization.”
Henkel will serve as a consultant to the board of directors.
In a previous interview with Richmond BizSense, Henkel said the bank had been trying to raise $6 million to $9 million for almost a year. But, given the economic climate, that has been more difficult than expected, he said, and the bank was able to raise only $1.5 million. He said the bank would consider a sale if the right offer came along.
Miller said he has not seen any offer for a sale.
As of March 31, the bank had $11.12 million in capital, $137.38 million in deposits and $136.69 million in loans, of which $1,296,000 were non-accruing, according to FDIC reports.
Aaron Kremer is the BizSense editor. Please send news tips to Editor@richmondbizsense.com.
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