Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, February 2, 1991                   TAG: 9102020175
SECTION: BUSINESS                    PAGE: A-8   EDITION: METRO 
SOURCE: MAG POFF BUSINESS WRITER
DATELINE:                                 LENGTH: Medium

PRESIDENT RESIGNED, BANK SAYS/ HEALTH REASONS LISTED AS REASON

J.D. Fralin, chairman of the bank board, said Gary Peck has resigned, citing health reasons. Peck could not be reached Friday for comment. Fralin said Peck was on vacation.

First Security is a state chartered bank reporting about $18 million in deposits.

It has an office at Williamson and Airport roads.

Fralin, who is president of J.H. Fralin & Son, said the bank board will meet Tuesday to consider the resignation.

He said David Peterson of Roanoke, who has been a full-time consultant at the bank for about two months, is serving as acting president.

Peck became president of the bank in June 1989 after an 11-year career in banking.

He went to First Security after being vice president in charge of private banking at Signet Bank in Roanoke.

First Security opened in November 1988 with Frederick Query as president.

Query had organized the bank starting in October 1986.

Query was fired by the board in February 1989 and launched a stockholder fight to elect a different board. The existing board was reelected by 53 percent of the shares at a heated meeting in May 1989. Peck was appointed shortly afterward.

William C. Stott Jr., a lawyer and former president of the former Colonial American National Bank, now part of Crestar Bank, served as interim president during the 1989 dispute.

First Security was one of five banks recently linked to an investigation of "straw-man" loans arranged by Richard Hess, a bankrupt Salem mortgage broker. These were loans obtained by third parties to conceal the identity of the true borrower.

The straw-man loans at First Security were obtained through Thomas E. Hartman, who was then vice president in charge of lending.

Hartman, who joined the bank staff in May 1988, resigned last summer during the investigation.

John Meteney, one of the partners in a former land sales company at Smith Mountain Lake, listed a $50,000 loan from First Security in his bankruptcy papers filed recently.

Meteney and other members of the land sales operation are under investigation along with Hess.