Despite recession, new bank opens in Powhatan

New Horizon Bank in Powhatan raised enough money during tough economic times to open for business.

"We did it by getting up every day and saying, 'It's a new day,'" said James F. Keller, president and CEO of New Horizon Bank. "It was all connection-based."

Keller, who has been in banking for 32 years, was president and CEO of Bank of Powhatan for seven years until August 2007. Bank of Powhatan is now part of Bank of Essex, a subsidiary of Community Bankers Trust Corp. in Henrico County.

The New Horizon organizing team, all formerly with the Bank of Powhatan, raised more than $9 million from 270 investors, mostly from the Richmond area.

"Accolades to New Horizon," said Kent Engelke, chief economic strategist and managing director at Capitol Securities Management in Richmond. "The group was able to raise money for a startup bank during the worst financial crisis in more than a generation -- an incredible feat."

The bank is starting with a pristine balance sheet with no troubled real estate loans, so that could give it an advantage over other lenders, Engelke said. New Horizon lenders can cherry-pick good borrowers who were denied credit from existing banking relationships for fear that new loans could add problems to their portfolios.

Community banks as a whole offer considerable value, although their stocks have not participated in the current rally for a variety of reasons, Engelke said. "If history is a guide, community banks rallied about 600 percent at the conclusion of the last major banking crisis in the early 1990s."

New Horizon opened for business Oct. 7 with a national charter under the supervision of the comptroller of the currency. The organizing team began raising capital in June 2008 and completed the effort Sept. 11.

New Horizon is located in a former Central Virginia Bank office at 2501 Anderson Highway in the Flat Rock area. It has 10 employees.

Deborah C. Llewellyn, chief lending and development officer, said the organizing team's greatest successes came from sitting down with prospective investors and explaining what they hoped to accomplish.

"We are a community bank with caring personnel and expert bankers right here in this community," she said. "The target customers are smallto medium-size business and our local community folks."

Other members of the organizing team are Mary W. Deeth, now director of operations, and Kathy H. Grasty, chief financial and credit officer.

Contact Carol Hazard at (804) 775-8023 or .