Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, August 29, 1993 TAG: 9308290145
SECTION: VIRGINIA PAGE: B3 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
A letter received by bank customers Saturday told them to make other banking arrangements prior to that date.
The "Dear Customer" letter gave no reason for abandoning the office at Airport and Williamson roads.
But officials said two years ago that they purchased the deposits of failed First Security Bank of Roanoke only to gain the right to open an office in Wytheville.
First Century is a subsidiary of Pocahontas Bankshares Corp. of Bluefield, W.Va. Its lead bank, First National Bank of Bluefield, W.Va., had solicited loans in that area of Virginia but could not take deposits.
First Century is building a permanent office in Wytheville, where its current rented space serves as its Virginia headquarters. The new office should open by the end of the year.
Last spring, it purchased the Fort Chiswell office of Dominion Bank, also in Wythe County. It will open under the First Century name Monday.
Jeffery Forlines of Wytheville, president of First Century, said it will close its Roanoke office because of "competitive pressures."
He said major statewide and regional banks have an established presence in Roanoke that "created a difficult environment for a new market entrant to compete effectively."
It was always the bank's intention to test the market potential for two years, Forlines said, and then to evaluate the results.
After assessing viability of the Roanoke office, Forlines said, Pocahontas officials said they decided it was not in their best interest to serve the Roanoke market from a single branch.
Deposits have been "slack" since First Century opened in Roanoke in May 1991, according to Forlines. The loan portfolio, on the other hand, has grown and remained solid.
Forlines said the closing has nothing to do with capital and that First Century remains a sound bank. He said there were no credit losses in Roanoke. The bank has assets of $230 million.
Only four employees remain at the branch. Forlines said two of them will transfer to Wytheville and the other two will receive a severance package that includes cash and health benefits.
Eight former employees have found other jobs.
The letter asked customers to settle their accounts and make arrangements for their future banking needs.
It said checking, savings and deposit customers should select another financial institution and transfer their funds by Nov. 26.
Holders of certificates of deposit maturing after that date were told that they could handle them by mail through the Wytheville office.
People who don't want to handle CDs by mail will have the option of withdrawing the money between Nov. 15 and 26 without an early withdrawal penalty.
But the letter pointed out that people looking for new CDs at other banks now may have to settle for lower rates than their current certificates carry. Rates have been dropping over the past two years.
People with safe-deposit boxes were asked to remove the contents. The bank will refund a prorated share of the annual fee.
First Century said it will retain the loan portfolio. Loan customers in Roanoke must mail their payments to the Wytheville office.
by CNB