Fredericksburg, Va., is about to lose its last two local banks, but two veterans of Mercantile Bankshares Corp. of Baltimore plan to fill the void.
William B. Young, the former president of National Bank of Fredericksburg, and Lloyd B. Harrison 3rd, the former president of Mercantile Southern Maryland Bank in Leonardtown, Md., are organizing Virginia Partners Bank, a community bank in Fredericksburg.
PNC Financial Services Group Inc.
The other local bank in Fredericksburg is Second Bank and Trust. Last month its parent, Virginia Financial Group Inc. of Culpeper,
"When National Bank of Fredericksburg ceases to exist, [and] when Second Bank goes away, it will be the first time since 1865 that there hasn't been a locally headquartered bank in Fredericksburg," said Mr. Harrison, who will be Virginia Partners' president.
Starting a new bank "is not an issue of rejection or repudiation, but rather of seizing opportunity," he said.
As of June 30, 2006, BB&T Corp., Wachovia Corp., and Union Bankshares Corp. of Bowling Green, Va., held more than 68% of Fredericksburg's $1.4 billion of deposits. National Bank of Fredericksburg had the No. 4 share, with 15%, and Second Bank and Trust had 4.3%.
"We are becoming a branch-bank-only kind of a town, without local ownership in control and management," said Mr. Young, who will be Virginia Partners' chief executive. "There is a component, I believe, in every economy that cherishes … [the community bank] kind of approach, and we hope to provide that."
Wallace N. King, who was a senior vice president at National Bank of Fredericksburg, will be an executive vice president and senior lending officer at Virginia Partners.
Mr. Young said he hopes to leverage the contacts of its management team and its board, which includes a former state senator, to drum up business.
Virginia Partners is expected to open in the spring. Mr. Young said he will begin raising capital next week, and he hopes to take in between $15 million and $25 million.
David G. Danielson, the president of Danielson Capital LLC, a bank consulting firm in Vienna, said community banks, particularly satrt-ups, have been finding it harder to raise capital of late as credit markets have tightened.
But, he said, "these are very experienced bankers with deep connections, and they are more likely to have better fortunes raising capital than some other groups out there."
Mr. Young expressed confidence in the economy of Fredericksburg, which is on Interstate 95, about halfway between Washington and Richmond.
"All we've done for the past 20 years is grow and grow and grow," he said of Fredericksburg.
But Mr. Danielson was less enthusiastic.
"It's a difficult market — to the south you've got the state capital, you're not there. And to the north you've got Washington, which sort of operates in a different orbit," he said. "I don't know how many $3 million loans you can come up with in that area."
