Banking Notebook: Merger moving ahead; bank will still be in grocery stores

Now that federal regulators have blessed the deal, two local banks can move ahead with their merger.

That means shedding about 70 employees and putting up new signs at all the branches. In March, Union Bankshares bought First Market Bank for about $100 million in stock. (You can read more about that deal here.) The deal has taken two months longer than expected to complete.

Local bank files plan with regulators

Midlothian-based Bank of Virginia has entered into a written agreement with its regulators to improve its condition.

Frank Bell, president and CEO of the bank, said the bank is well on its way to satisfying the conditions set forth by regulators.

“We had known this was coming since September, so we have been working on this,” Bell said.

According to the agreement, Bank of Virginia must submit to regulators a plan that improves its loan policies, credit risk management and board oversight, among other requirements. The bank must also complete a management review and develop a strategic plan to improve the bank’s earnings and budget for 2010.

New bank finally opens; paperwork not quite done

“We are in business and talking to customers, opening deposits and making loans.” Xenith Bank president and CEO Galyon Layfield has been waiting more than a year to say that. Richmond-based Xenith Bank originally wanted to start a new bank from scratch, but because federal regulators were not letting new banks form, the founders bought a bank in Hampton Roads. That slowed them down considerably.

Payback time

Union Bankshares, the parent company of Union Bank & Trust, just wired the U.S. Treasury $59 million it borrowed in December as part of the Troubled Asset Relief Program. The TARP money was expensive in both interest and public scorn. The bank was paying about $288,000 per month in interest on those funds, said William Beale, the president and CEO at Union Bankshares.

Regulators withhold blessing, deal quashed

It’s time to move on for two small community banks that wanted to join forces but got sick of waiting for regulators to give their stamp of approval. Eastern Virginia Bank and First Capital Bank announced in early April that they wanted to merge in a deal valued at $27 million.

Deal’s off

Two local banks are calling off their merger. Eastern Virginia Bank and First Capital Bank are no longer going to combine operations in a $27 million deal, as they agreed to in April. The reason, according to a news release, is the series of delays caused by regulation.

Putting two banks together doesn’t come cheap

Putting two companies together can be costly.

Union Bankshares, the parent holding company of Union Bank & Trust, will spend almost $10 million in coming quarters to consummate its acquisition of First Market Bank. The cost of blending the two companies into one will be about $10.8 million. About $948,000 has been spent so far, much of it on legal fees.

SBA lending rebounds

Lending is starting to flow again to small businesses.

The Small Business Administration Richmond office helped broker 230 loans in the most recent quarter, which ends today. That’s 19 more than the same quarter last year – and the first quarter in a year not see at least a 27 percent decrease in the number of loans issued.

Two quarters ago, the number of loans was down more than 50 percent from the previous year.

“There’s a little more confidence out there in the small-business community,” said Scott Dailey, an assistant director at the SBA’s Richmond office, which handles the entire state except for Northern Virginia.

First Market Bank cuts ‘duplicate’ jobs

A total of 50 employees from First Market Bank and Union Bank and Trust have been given their walking papers.

In March, Union Bankshares purchased First Market for about$100 million in stock. (You can read dabout that deal here.)

William Beale, president and chief executive of Union Bankshares, said the recent job cuts are likely all the jobs that will be eliminated as part of the acquisition of First Market. The combined bank will have about 900 employees.

“Everybody having a status change has been notified,” said Beale. “Some will be retained until the end of the year and some well into the first quarter of next year.”

He said the personnel cuts are part of a 9 percent reduction in overhead achieved by combining the two banks. Most of the ...

New head at Virginia Business Bank

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.

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