FEDERAL DEPOSIT INSURANCE CORPORATION
IN
RE: Virginia National Bank (Proposed)
Charlottesville, Albemarle County, Virginia
Application for Federal Deposit Insurance
(Bank Insurance Fund)
ORDER
The Board of Directors ("Board") of the Federal Deposit Insurance Corporation
("FDIC") has fully considered all available facts and information relevant to
the factors contained in Section 6 of the Federal Deposit Insurance Act and relating to
the application for Federal deposit insurance, with membership in the Bank Insurance Fund,
for Virginia National Bank, a proposed new bank to be located at 222 East Main Street
Charlottesville, Albemarle County, Virginia, and has concluded that the application should
be approved.
Accordingly, it is hereby ORDERED, for the reasons set forth in the attached Statement,
that the application submitted on behalf of Virginia National Bank, for Federal deposit
insurance, be and the same hereby is approved, subject to the following conditions:
1. That beginning paid-in capital funds of not less than $12,500,000 shall be provided;
2. That any changes in proposed management or proposed ownership (10 percent or more of
stock), including new acquisitions of or subscriptions to 10 percent or more of the stock,
shall render this approval null and void unless such proposal is approved by the
FDIC prior to opening of the bank;
3. That during the first three years of operation the bank shall maintain not less than
an 8 percent Tier 1 capital ratio;
4. That Federal deposit insurance shall not become effective unless and until the bank
has been established as a national bank, that it has authority to conduct a banking
business, and that its establishment and operation as a bank have been fully approved by
the Office of the Comptroller of the Currency;
5. That until the bank commences business, the FDIC shall have the right to alter,
suspend, or withdraw said. approval should any interim development be deemed to warrant
such action; and
6. That if Federal deposit insurance has not become effective within 12 months from the
date of this Order, or unless, in the meantime, a request for an extension of time has
been approved by the FDIC, the consent granted shall expire at the end of said 12 month
period.
Dated at Washington, D. C., this 26th day of June, 1998.
BY ORDER OF THE BOARD OF DIRECTORS
Robert E. Feldman
Executive Secretary
FEDERAL DEPOSIT INSURANCE CORPORATION
IN RE: Virginia National Bank (Proposed)
Charlottesville, Albemarle County, Virginia
Application for Federal Deposit Insurance
(Bank Insurance Fund)
STATEMENT
Pursuant to the provisions of Section 5 of the Federal Deposit Insurance Act (12 U.S.C.
1815), an application for Federal deposit insurance, with membership in the Bank Insurance
Fund, has been filed on behalf of Virginia National Bank, a proposed new bank to be
located at 222 East Main Street, Charlottesville, Albemarle County, Virginia
("Bank").
The Bank's primary market area is the City of Charlottesville and the surrounding
Albemarle County.. A review of the Bank's Community Reinvestment Act Statement and other
available information indicates that no inconsistencies with the purposes of the Community
Reinvestment Act appear to exist.
Initial capitalization is adequate, and acceptable deposit growth and operating profits
are projected within a reasonable time period. The factors relating to the general
character and fitness of management, and risk to the deposit insurance fund have been
favorably resolved.
The application, as submitted, includes a Stock Option Plan for the Bank's organizers,
president, chairman of the board, and other unspecified employees. The Stock Option Plan
was established in order to compensate the organizers for the financial support they
provided during the Bank's initial stages of organization and to attract and retain
qualified personnel. There is no provision in the Federal Deposit Insurance Corporation's
("FDIC") Statement of Policy regarding applications for deposit insurance to
accommodate the granting of stock benefits to reward organizers for their financial
support during a bank's initial stages of organization. The issuance of stock benefits to
organizers and outside directors who will not be involved in the active management of the
bank is also not in accord with the Statement of Policy.
While the proposed stock benefits will not be tied to specific performance by active
management as provided in the Statement of Policy, such stock benefits are acceptable
under the FDIC's proposed revisions to the Statement of Policy. The FDIC's Board of
Directors ("Board"), in the proposed revisions to the Statement of Policy and in
recent Federal deposit insurance applications involving stock benefit plans, has concluded
that such plans are not objectionable if such plans represent reasonable compensation for
the time, expertise, or financial commitment of the organizers and outside directors. In
this particular case, the stock benefits for organizers and outside directors are not
considered objectionable because they do not raise significant safety and soundness
issues, represent a potential breach of fiduciary duty, or represent undue risk to the
Bank Insurance Fund.
Accordingly, based on the evaluation of all available facts and information, the Board
has concluded that approval of the application is warranted, subject to the conditions
listed in the ORDER.
THE BOARD OF DIRECTORS
FEDERAL DEPOSIT INSURANCE CORPORATION
