Pending merger brings veteran banker off the sidelines

Gary Armstrong

Gary Armstrong

Ending what he described as a six-month sabbatical from banking, Gary Armstrong is back in the game.

The veteran local banker clocked in Monday as the new Richmond market head of the soon-to-merge Bank of Lancaster and Virginia Commonwealth Bank. He was most recently in a similar position locally for Charlotte-based Park Sterling Bank.

Picking up Armstrong gives Bank of Lancaster and VCB his book of business and relationships in commercial lending built over three decades in the industry. The combined banks look to centralize in Richmond, which will serve as an adopted headquarters in place of their respective homes in Lancaster and Petersburg.

The two banks in November announced a deal structure as a merger of equals, valued around $29 million. It brings together Bank of Lancaster’s $468 million in assets with VCB’s $324 million.

Armstrong, who went through an acquisition two years ago when Park Sterling bought Henrico-based First Capital Bank, said he was attracted to the relative size of Bank of Lancaster and VCB.

“This is a very different situation where I have two small community banks locally that are coming together,” Armstrong said. “The combined banks will be a significant size and there’s a lot we’ll be able to do. I knew they’d be big enough so we could bring that First Market, First Capital sophistication to community lending.”

VCB's recently opened branch in the West End.

VCB’s recently opened branch in the West End.

Armstrong said he also was attracted to the way Bank of Lancaster CEO Randy Greene and VCB chief Frank Scott handled the deal.

“It’s two community banks where two CEOs came together to do the right thing. It wasn’t investment banking-driven,” he said.

Armstrong said he left his position Park Sterling in July, driven by a difference in philosophy. His LinkedIn page described him in the interim as a “recovering banker.”

“It was not a match in philosophies around how you deliver community banking in Richmond,” he said. Bobby Cowgill replaced Armstrong at Park Sterling.

A Richmond native and Virginia Tech graduate, Armstrong began his banking career in Roanoke with the former Dominion Bank. After stints at First Union and Crestar in Greensboro and Norfolk, he was a founding member of First Market Bank, prior to its combination with Union Bank & Trust. He was chief lending officer at First Capital going into the Park Sterling deal.

The VCB/Bank of Lancaster merger is set to close in April.

Armstrong said the banks are working to lease a new combined headquarters at an undisclosed location in the West End.

Bank of Lancaster opened its first Richmond branch in November 2014. (Michael Schwartz)

Bank of Lancaster opened its first Richmond branch in November 2014. (Michael Schwartz)

Operating with the Virginia Commonwealth Bank name, it will have a territory of 19 branches spread from the Northern Neck, through Richmond and down to the Tri-Cities. Bank of Lancaster’s parent company Bay Banks of Virginia will be the surviving name for the combined holding company.

Greene will serve as vice chairman and CEO of the combined bank and holding company, and Scott as chairman of the holding company and president of the bank.

Armstrong said he aims to further grow the bank’s business lending in the competitive Richmond market.

“The market has gotten very, very competitive, and has been for the last two to three years. It feels a little over-banked and pricing has gotten so aggressive that banks are undercutting each other,” he said. “The true community bank has value in our market.”

He said he also hopes to attract talent from around Richmond to join him.

“I think we’ll be able to bring in some good bankers and, again, provide that more sophisticated capability to business banking.”

Correction: An earlier version of this story incorrectly reported that Bobby Cowgill was previously with First Capital Bank. He did not work for First Capital prior to its deal with Park Sterling. 

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