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

DATE: SATURDAY, May 20, 1995                   TAG: 9505220033
SECTION: BUSINESS                    PAGE: A6   EDITION: METRO 
SOURCE: MAG POFF STAFF WRITER
DATELINE:                                 LENGTH: Medium

BUYING OR BEING BOUGHT?

The bank holding company, based at Martinsville, also is looking at eliminating up to 80 jobs and increasing fees for its services.

At least one bank analyst has predicted that the company could be sold to a larger bank, but the bank's chief financial officer, James Adams, said Friday that management believes the bank "has more value as the acquirer than as the acquiree."

The analyst, Vernon Plack of Scott & Stringfellow Inc., wrote in a report last week that the company "will likely be sold" unless the new management team generates superior returns for the shareholders. He recommended that his clients buy the stock based on a substantial recovery in earnings, a buyout at an estimated $36 a share or a combination of both.

The company's stock closed Friday at $24.25 a share, up 75 cents from Thursday.

Piedmont is not looking for a purchaser, Adams said. If an offer were made, it would be presented to shareholders, he said, but the long-term interest of stockholders lies with a growing bank instead.

"Hopefully, it's not going to be sold," Adams said. Rather, he is looking for consistency and growth in earnings.

Piedmont is approaching that goal from several fronts.

First, management has been centralizing the operational functions of its member banks: Piedmont Trust Bank, Bank of Carroll, Bank of Ferrum, First Community Bank, First National Bank of Stuart and First National Bank of Saltville.

Second, he said, Piedmont BankGroup is looking at "right-sizing." That means cutting jobs, and as many as 80 could be eliminated, with the exact number depending on further analysis. Adams gave no date for any layoffs.

Third, Piedmont BankGroup is looking at its fee income from banking services in comparison with what other banks charge. It has found that "we are giving away a lot of products and not charging for it."

Finally, Piedmont BankGroup officials have been traveling the entire state, seeking other community banks for inclusion in its holding company.

Piedmont is stressing its affinity style in which member banks retain their names and identity in the community, along with their own management. Unlike acquisitions by major banks such as First Union and Crestar, he said, the merged bank does not disappear.