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Bank on it: Why 2012 was a turning point

Michael Schwartz December 28, 2012 0

The new StellarOne branch, Union’s downtown headquarters and an Essex Bank branch. (RBS photos)

After years of a lot of bad news, the local banking scene saw a sunnier side in 2012.

Many banks that had struggled since the recession began to stabilize, some local banks began to shed the infamous TARP and, although some local bank branches closed, out-of-town banks continued their expansion into the market.

Glen Allen-based First Capital Bank had a busy year that included a $17.8 million capital raise in May and its unconventional exit in June from the TARP program.

In April, C&F Bank bought its way out of its remaining $10 million in TARP capital. Having taken $20 million from the program in 2009, it repaid the first half in the summer 2011.

Still on the hook for $17.6 million in TARP capital, Essex Bank and its Innsbrook-based parent, Community Bankers Trust, received approval from regulators in August to make six TARP dividend payments that it had fallen behind on in 2010.

Essex took another step in the right direction this month, becoming the first local bank to be released from a regulatory written agreement since the recession. It was one of a handful of Richmond banks under such an agreement.

Essex wasn’t the only local bank that saw improvement in 2012.

Midlothian-based Bank of Virginia had its first profitable quarter in almost three years and then set off to raise a fresh round of capital.

Of the 15 community banks headquartered across Richmond, 11 reduced their nonperforming assets through the first six months of 2012.

And as of the end of the second quarter, 11 banks were profitable. That’s up from six from the same period in 2011.

There was plenty of news from out-of-town banks making moves into the Richmond market during 2012.

Christiansburg-based StellarOne in August opened its first Richmond branch at the corner of Libbie and Patterson avenues. Four months later, it found a site for another branch near Gaskins and Gayton roads.

Middleburg Bank, headquartered in Northern Virginia, announced its second branch in the Richmond market. It leased an old Wachovia/Wells Fargo branch on Libbie Avenue, in the heart of the popular Libbie and Grove retail area.

Citizens Bank & Trust, headquartered about 60 miles southwest of Richmond in Blackstone, began talks to purchase a site in Chester for its fourth branch in the market. The property is part of a six-acre parcel owned by developer George Emerson.

Another out-of-town bank made a splash locally with a $40 million acquisition. First Community Bank of Bluefield, Va., acquired the 10-year-old Peoples Bank of Virginia and its four local branches in a deal that closed in June.

A few branch closings also dotted the year.

Union First Market Bank in May closed branches in Charlottesville, Fredericksburg, Port Royal and Mechanicsville.

Gloucester-based Colonial Virginia Bank closed its three-year-old branch at New Kent Courthouse Village, a 21-acre mixed-use development that had stalled and been in and out of bankruptcy and foreclosure.

And EVB, headquartered in Tappahannock, announced in September the closure of a branch in Bowling Green and then broke ground on a new branch in Colonial Heights. It’s the bank’s 22nd branch.

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