WASHINGTON -- Virginia's banks and thrifts are merging their trade groups, continuing a trend that has taken root in six other states.

The Virginia Bankers Association, which represents 164 commercial banks, and the Virginia League of Savings Institutions, which counts 33 savings associations among its members, agreed to the marriage in separate votes on June 20.

The surviving group will be known as the Virginia Bankers Association.

"In recent years, both the legal aspects and the market place distinctions between banks and savings banks have been significantly reduced," said Vernard Henley, president of the Virginia Bankers and chairman of Consolidated Bank and Trust Co., Richmond.

"Today the balance sheets of many banks and savings banks are frequently the same with most consumers not recognizing a difference," he added.

"Savings banks and commercial banks have many common interests and purposes today and very little that separates them," added Gordon L. Gentry Jr, chairman of the Virginia League and chairman of TideMark Bank for Savings, Newport News.

"It makes sense for our trade organizations to come together in serving our members requirements for training, legislative initiatives, and employee benefits programs," he added. "It's a win-win situation."

To implement the merger, the Virginia Bankers Association will add four thrift executives to its 19-member board for a three-year transition period. After that, board members will be elected without regard to the type of institution they represent.

A spokesman for the Virginia Bankers said he expects the two groups to agree on most issues, but conceded that there may be occasions on which members divide on bank and thrift lines.

One such issue will arise if Congress decides to consider merging the bank and thrift insurance funds.

"That could be something on which we disagree," said the VBA spokesman. "It was brought up by both sides and both sides understand it is an issue. We just agreed that it would have to be decided by the democratic process."

Edward L. Yingling, executive director of government relations for the American Bankers Association, said the issue of whether to merge the Savings Association Insurance Fund with the Bank Insurance Fund may be the only federal legislative issue on which banks and thrifts disagree. "I can't think of any others," he said. However, he added, other industry trends may prove more important in deciding that issue than the merger of state trade groups.

"The bigger factor now is that the savings and loan industry is being bought up by banks," Mr. Yingling said. "Right now, 20% of the deposits insured by SAIF are owned by bank holding companies."

In announcing the merger, the two trade groups noted that they have cooperated in lobbying on a number of state legislative issues, and on a number of state and federal regulatory issues.

Bank and thrift trade groups have merged in Florida, Tennessee, Connecticut, New Jersey, Massachusetts, and Pennsylvania.

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