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■ Business Trends: BANKING


Will mergers ruin Virginia’s community banks?


F


Industry experts say trend is a sign of a strengthening economy by Tim Loughran


or a variety of reasons, an increasing number of Virginia community banks have decided


to combine. The urge to merge has resulted


in fewer banks competing in the commonwealth, but bank executives and industry experts say the trend doesn’t threaten the industry (or its customers) and could continue as the economy improves. “The decline in numbers of com-


munity banks in Virginia has been precipitous,” says Steven C. Yeakel, president and CEO of the Virginia Association of Community Banks (VACB). “We’ve had 28 mergers or announcements in the last four-and-a half years. That’s substantial.” In April, the $450 million


Kilmarnock-based Bank of Lancaster closed its merger with Petersburg- based Virginia Bancorp Inc., creating a new Virginia Commonwealth Bank (VCB), a 19-branch, $800 million financial institution based in Henrico County. In a joint interview, VCB’s CEO,


Randal R. Greene, and president, C. Frank Scott III, say their merger was designed to create a bank large enough to better target the rising number of thriving small businesses in the Rich- mond metro area. In May, Richmond-based Union


Bankshares Corp. agreed to buy cross- town rival Xenith Bankshares Inc. in


Photo courtesy Virginia Commonwealth Bank


Virginia Commonwealth Bank CEO Randal Greene (left) and President Frank Scott III say their merger makes the bank large enough to better target growing small businesses in the Richmond area.


a stock deal worth $701 million. The acquisition is expected to be completed by the beginning of next year. The combined bank would have $12 billion in assets and more than 150 branches and loan offices from Maryland across


www.VirginiaBusiness.com


Virginia to eastern North Carolina. (Last summer, the Virginia


Beach-based Bank of Hampton Roads bought Xenith to create a larger, Richmond-based bank under the Xenith name.)


VIRGINIA BUSINESS 65


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