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

DATE: SATURDAY, March 28, 1992                   TAG: 9203280078
SECTION: BUSINESS                    PAGE: A-8   EDITION: METRO 
SOURCE: PATRICK K. LACKEY LANDMARK NEWS SERVICE
DATELINE: NEWSOMS                                LENGTH: Medium

LITTLE TOWN COULD LOSE LIFEBLOOD: ITS ONLY BANK

It's said that a single raindrop is a tragedy for an ant.

Rural villages such as Newsoms, population 340, sometimes feel like rained-on ants. They get crushed by unforeseen forces too small to cause a larger town to flinch, or even notice.

This Southampton County town in Southside Virginia learned this year that it soon may lose its Dominion Bank branch. It's the only bank in town.

The brick building is unimposing, in size and shape about like a typical suburban home.

But the branch pays the town about $6,500 a year in bank franchise taxes. That represents more than a third of the town government's locally collected money and a quarter of its operating budget. The only other large sources of local funds are $4,700 from property taxes and $4,800 in business licenses.

City property taxes would have to more than double to make up for the loss of bank taxes, said Mayor Sheldon C. "Butch" Worrell Jr.

Many elderly and poor residents could not afford higher taxes, Worrell said, and they lack transportation to the next closest bank, six miles away in Boykins. A fifth of Newsoms residents are 65 or older, the mayor said.

Loss of the bank would hurt the town's pride. "I can recall the excitement of the grand opening of the Newsoms branch about 18 years ago," Worrell wrote to Roanoke-based Dominion Bankshares Corp.

"The reigning Miss Virginia was present, along with Southampton County officials and local community and government officials for the ribbon-cutting. . . . The thought of losing our only bank at this time causes great agony."

About 50 Newsoms residents have written the banking company urging that the branch be spared.

Because some services such as police protection and water are provided by the county - to which Newsoms residents also pay property taxes - the only major service the town could cut as a result of the loss of taxes is weekly waste collection, which costs about $8,000 a year. But then trash would pile up.

The town could turn off its street lights, the mayor said, but the savings wouldn't offset the loss of money from the bank.

There's no one to fire to save money. The two town employees work only a few hours a week each.

Newsoms' worries began in mid-January, when Dominion Bankshares announced it was considering closing 30 of its 286 branches in Virginia, Tennessee, Maryland and the District of Columbia.

Dominion's chairman, Warner Dalhouse, said cutbacks were necessary because of shrinking interest income caused by the lowest interest rates in a generation and loan quality problems worsened by a stalled economy.

In a letter to Worrell, Dalhouse wrote: "We simply have an obligation to examine every possible opportunity to increase efficiencies within our company. In doing so, we must try to balance the interests of all four of our constituencies: our customers, our shareholders, our employees and the communities we serve."

The decision to spare or close the branch in Newsoms probably will be made within three weeks, said Stuart R. Bryant, Dominion marketing president for its Hampton Roads region.

Some residents think the bank is unfairly punishing them for losses it suffered in Northern Virginia and other urban areas.

"We are becoming a victim of circumstances we didn't cause," Worrell said.

Sammy Drake, owner of Drake's Texaco Service Center in Newsoms, added: "They forget that a lot of little places made big business what it is."