Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, March 27, 1994 TAG: 9403290142
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Long
They are for those occasions when the bankers bump into acquaintances at the club, a party or a bowling alley and the conversation just might lead to "Let me know when you're selling stock" or "I might be interested in opening an account." Immediately, their names go on a blue card.
Guy W. Byrd Jr., president and chief executive officer of the bank-to-be, and A. Wayne Lewis, its senior vice president and chief operating officer, are maintaining two master lists of those names.
"They may forget they made the comment," Byrd said of the prospective stockholders and depositors. "We're not forgetting." He and Lewis will phone those people when Valley Bank's stock goes on sale, expected in late May or June, or when the bank opens, probably at the end of this year.
Byrd won't say how many names appear on those lists except that they are "measured in full pages."
Already, some people walk into the bank's temporary office at 32 Church Ave. in downtown Roanoke thinking that it is open.
Although the actual opening still is many months in the future, the organizers this week will take a major step in the organizing effort.
Come Thursday, they will file three major documents: an application for a bank charter with the federal Controller of the Currency, an application for authority to register stock with the Virginia Corporation Commission and an application for deposit insurance coverage with the Federal Deposit Insurance Corp.
Those documents represent countless hours of paperwork by the officers and the other organizers of the community bank. They had to do more than list their assets; they were required to account for their personal cash flow or expenses for the past three years. They were fingerprinted to prove they were not known gang members, associated with a failed bank, found guilty of money laundering or convicted of drug trafficking and the like.
They also are risking their personal funds - they won't disclose the amount - against success of the venture. If the stock doesn't sell, their money will be what's lost.
The organizers have held several meetings a month lasting three or four hours each. They went to Atlanta as a group in early March to meet with the officials at the Office of the Controller of the Currency and spent the day answering questions about their goals and purposes.
That so-called pre-filing meeting in Atlanta, Byrd said, "was very much a formal visit."
Lewis described the Atlanta proceedings as formal in nature in which the organizers had to prove the case for a new bank. It was also the regulators' first impression of the group.
All of this time and effort has cost the services of one of the 15 original organizers. Bittle W. Porterfield III, president of Rice Management Co., dropped out of the group because, said Byrd, "we found this a very time-consuming project, more than any of us anticipated."
Porterfield will not be replaced, so the group announced last January now consists of 14 people.
Even though Byrd and Lewis are the only people on the payroll - Betty Carr Muse is the volunteer receptionist - the organizers have put up considerable money for paperwork, rent, travel and the like. Byrd won't say yet how much money has been advanced for the project.
However, Arthur Myers, a Richmond bank consultant and retired official of the Federal Reserve Bank, said the cost of opening a new bank can vary greatly. But he said organizers renting a prime location and using professional help can easily spend $300,000 to $500,000 in the year it takes to open.
A bank can lose money for a year or more after it's open, Myers said, but it might turn a profit immediately if the organizers have good connections in the business community.
In the two months since announcing the effort to found Valley Bank, some key decisions have been made about its future.
Valley Bank's headquarters and downtown branch will be in the building at Church Avenue and First Street S.W. formerly occupied by First Federal Savings and Loan Association and its successor, CorEast Savings Bank. It has been vacant since CorEast was shut by federal thrift regulators in 1992, a year after its seizure.
Although the lease remains to be signed, Byrd said there is "no doubt" that Valley Bank will be "so designated on the city skyline." They will sign for the ground floor and part of the second floor, along with options on more space as the bank expands.
Location for a second branch in the Tanglewood area of Roanoke County is still subject of negotiations, according to Byrd and Lewis. They plan other branches in the future.
The organizers also have selected several of their outside advisers.
KPMG Peat Marwick will serve as Valley Bank's accounting firm; Woods, Rogers and Hazlegrove will handle its legal work. Both once worked for Dominion Bankshares Corp. of Roanoke prior to its acquisition by First Union Corp. of Charlotte, N.C.
Dennis Cronk of Roanoke is Valley Bank's real estate representative. His wife, Elaine, is the bank's "voice" on its telephone answering machine.
Byrd said a high percentage of Valley Bank's 20 initial employees will be customer service people because it intends to purchase some services outside the bank. It will outsource such functions as data processing, marketing, human resources and trust services. A second accounting firm will be retained to do internal auditing.
Valley Bank's public stock offering is likely to be made before the State Corporation Commission gives its blessing, meaning any money raised from would-be shareholders must be placed in escrow until the approval is received. The bank's organizers have not yet chosen an underwriting firm, but the stock will be sold through brokers, not by the organizers.
Byrd and Lewis will not say how much capital the organizers are seeking through their stock sale in advance of the SCC filing except that it will be substantially more than $5 million, the minimum required by federal law.
by CNB