Making bank, plus a bonus

It’s good to be in charge.

Fresh off a year of big losses, Community Bankers Trust Corp. increased the base salaries and total compensation of many of its top executives in 2009, according to its latest SEC filing.

The Glen Allen-based holding company and parent of Essex Bank reported a $29.3 million loss in 2009.

The company paid its president and CEO George Longest $382,390 in total compensation in 2009, an increase of $56,000 from 2008. Longest took over as CEO in 2008.

Bruce Thomas, CBTC’s CFO, brought in $233,550 in 2009, a raise of $12,000.

BizSense was unable to reach officials at the bank.

The company cut some compensation expenses during the year as it could not pay former CEO Gary Simanson a bonus he was due because of TARP-related limitations. Simanson received $288,388 in total compensation in 2009, down from $912,089 in 2008. Simanson was most recently the company’s chief strategic officer until that position was eliminated in April. You can read more about that here.

Each of the company’s top executives, with the exception of Simanson, received bonuses during 2009.

The company said in its proxy that in awarding those bonuses it took into consideration the company’s accomplishments during the year, its position related to future opportunities and its 2009 results and profitability.

The company began in 2005 as a fund to acquire community banks.

It then quickly grew through a series of deals to become one of the largest bank holding companies in the Richmond area. In May 2008, it acquired BOE Financial Services of Virginia Inc., the former holding company of Essex, and TransCommunity Bank and its holding company in July 2008.

That deal brought under its umbrella Bank of Goochland, Bank of Powhatan, Bank of Louisa and Bank of Rockbridge, all of which now operate under the Essex Bank brand.

In November 2008, the company purchased the assets of The Community Bank, a failed bank in Georgia, from the FDIC at a steep discount.

After receiving $17.7 million in TARP funds at the end of 2008, the bank turned around quickly and acquired a failed bank in Maryland in January 2009. It then lost another $3 million in the first three months of 2010, according to its SEC filings.

CBTC has grown to a $1.2 billion company whose Essex Bank brand now operates in Virginia, Maryland and Georgia. Essex, as of June 2009, controlled $387.4 million or 0.73 percent of the deposits in the Richmond market.

It has since been hampered by delays in its financial reporting requirements and losses that were fueled by impairment charges related to the decline in value of the bank assets it acquired.

Its earnings also took a hit as it set aside funds to cover troubled loans.

The company reported $30 million (or 4.2 percent of outstanding loans) in non-performing assets as of March 31, compared with $11 million a year earlier.

Michael Schwartz covers banking for BizSense. Please send news tips to [email protected]

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3 Comments on "Making bank, plus a bonus"

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William F. Shumadine, Jr.
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William F. Shumadine, Jr.

Compensation of this magnitude for executives of an almost failed, but now no more than mediocre, bank holding company is ludicrous, if not criminal. I imagine the regulators should have a field day with their next examination.

William F. Shumadine, Jr.
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William F. Shumadine, Jr.

My comments were accurate and civil, and come from a former bank president whose institution was one of the highest perfoming banks in the nation.

Muffy Barden
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I agree with Mr.Shumadine! I actually worked for Shumadine at Central Fidelity Bank & was an honored employee of such a fine financial institution. I left the banking arena in 1995 afte the birth of my youngest child & I am currently a customer of Essex Bank formerly Bank of Powhatan. Their lack of consistent customer service saddens me every time I visit my branch. While at Central Fidelity we provided awesome customer service because it was such a great place to work & those feelings obviously trickled down from the top. I can only imagine that these executives do… Read more »
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