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Cary Street Partners’ Tom Tullidge, quoted regarding Bank of VA’s new M&A “dream team” strategy

From: SNL Financial
Bank of Virginia Assembles Dream Team, Eyes M&A

5/26/11

Midlothian, Va.-based Bank of Virginia Chairman and CEO Jack Zoeller said it is never bad strategy to surround yourself with the smartest people you can find.

“Almost all of us have backgrounds that would position us for a longer-term strategy that implies doing acquisitions, that implies material capital raising. It’s premature to be doing that now but we sure have the team in place,” Zoeller told SNL with regard to a raft of high-profile board appointments and senior management additions in 2011.

Most recently the bank added Richard Dickinson to become executive vice president and COO and hired Roy Barzel to be executive vice president and chief credit officer. Both men were previously with SunTrust Banks Inc. One of the more notable additions was theelection of Todd Thomson to the bank’s board as well as that of the bank’s holding company, Midlothian-based Cordia Bancorp Inc. Thomson, who might be better known to some from his work in the wealth management arena, joined Bank of Virginia originally as an investor in May 2010.

“This is a real strategy and acquisitions guy,” Zoeller said. “I wouldn’t understate his background in the M&A area even though it’s not high profile in what he’s doing today and even though he’s gone on to recent success in the wealth management arena.” Zoeller said Thomson was involved in M&A both during his time with General Electric Capital Corp.and then during a period when he was CFO at Citigroup Inc.

Zoeller previously told SNL that the bank would not seriously consider acquisitions until 2012. He did not back down from that timeline this week but said it is the right general time for the bank to be considering those possibilities. “I don’t mean this month or this quarter, but over this several-year period there’s going to be a lot of opportunity to succeed for groups doing the kind of things we’re doing,” he said.

In the immediate term, the first step of the bank’s strategy is to get its house in order and satisfy a written agreement with regulators. Zoeller said that even though many of the new personnel additions have had success on a larger stage they are comfortable pitching in and doing whatever is needed in a smaller setting.

Prior to electing Thomson to become a director, Bank of Virginia added some experience to its board of directors in the form of Hunter Hollar and David Bushnell. Hollar, a former Federal Reserve Bank of Richmond board member who was also chairman and CEO of Olney, Md.-based Sandy Spring Bancorp Inc. oversaw an institution with about $3.5 billion in assets. “He and Dave Bushnell, who was senior risk officer at Citigroup, were both in here sitting down with junior loan officers for multiple days assessing portfolios. You don’t normally see that from people with those backgrounds,” Zoeller said.

Having regulatory support is key to the bank’s strategy, Zoeller said. And he said there is no such thing as appearing too strong or too capable in the eyes of the regulators. “So if you’re positioning yourself to raise capital in the future, which we are, and if you’re positioning yourself to get regulatory approval for various things you want to do in the future, which we are, and if you want the smartest people possible to help with the immediate challenges of 2011… it all comes together,” he said.

Another step the bank took to tie up loose ends in the first quarter was to name then interim CFO Nancy Corsiglia to be the company’s CFO on a non-interim basis. Tom Tullidge Jr., a co-managing partner at Cary Street Partners LLC, told SNL that Cordia and Bank of Virginia appear to be positioning themselves in a similar way to a number of other banks and bank holding companies that are looking to build strong franchises in the Virginia and Carolina markets.

“These markets are void of strong midsize banks in the $7.5 billion to $25 billion asset range that are still of the size that they can continue to relate to their customers as community banks but are large enough to be able to serve the needs of the larger local and regional businesses,” he said.
Tullidge said there are a number of entities that are adopting similar strategies to position themselves for growth, including smaller institutions like Cordia and Bank of Virginia, which have attracted capital and new leadership qualified to operate entities at a much larger and more sophisticated level. He said that group also includes stronger and larger community banks that are already better armed than their smaller competitors.

“These entities see opportunities to expand their geographic reach and deposit-gathering capabilities through M&A activity and to strengthen their asset production and relationship management by aggressively recruiting talented professionals in new or adjoining markets,” he said.