THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, January 24, 1995 TAG: 9501240256
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Short : 43 lines
Essex Financial Partners L.P. in Virginia Beach has been folded into its principal unit, thrift holding company Essex Bancorp Inc.
The consolidation was approved by a majority of Essex Financial's limited partners at a special meeting last week, Essex Bancorp said.
The ownership structure was changed because the partnership ``was complex and confusing and no longer met its original business objectives,'' Gene D. Ross, Essex Bancorp chairman and chief executive officer, said in a prepared statement.
Use of a corporate structure will better serve Essex Bancorp in its effort to raise capital, Ross said. Essex also announced that it has filed with the Securities and Exchange Commission to raise additional capital through a rights offering to shareholders.
Essex, parent of the North Carolina-based thrift Essex Savings Bank, has suffered heavy losses in recent years. Burdens include high levels of foreclosed real estate and the sharply reduced value of mortgage servicing rights it purchased before the wave of mortgage refinancing in 1992 and 1993.
Eliminating the partnership was part of a broad reorganization of Essex that began after a change in management in 1992.
In an effort to streamline its operations and reduce costs, the thrift holding company also has merged its Virginia and North Carolina savings banks into a single institution and sold its branches and deposits in Florida. In addition, it restructured a significant part of its debt.
As part of the consolidation of the partnership into the holding company, investors will receive one share of Essex Bancorp common stock for every two units that they held in Essex Financial Partners, the company said.
The company's shares closed Monday at 5 3/4, unchanged from Friday's last trade but up from 2 1/4 at year-end 1994.
Essex's shares are listed on the American Stock Exchange, where the partnership units of Essex Financial Partners also are traded. by CNB