Magazine article American Banker

Governor's Signature Widens Branching Law in West Virginia

Magazine article American Banker

Governor's Signature Widens Branching Law in West Virginia

Article excerpt

CHARLESTON, W. Va. -- West Virginia Gov. John D. Rockefeller 4th has signed into law a bill removing all limits on state branch banking over the next seven years.

It is a bold step in many respects for this conservative and often traditional state which, just a few years ago, refused to permit even a trace of branching.

Now, within the span of three years, the West Virginia legislature has passed two major law changes enabling greater competition among financial institutions. Both actions have been inspired by the state's need for industrial expansion and a greater job base. West Virginia leads the nation in unemployment.

The bill expands a 1982 branch banking bill and permits banks to open branches anywhere in their home counties immediately when it goes into effect this summer.

Beginning in 1987, banks can open branches in continguous counties, and by 1991 will have the option of opening branches anywhere in the state.

The bill also raises the limit of a bank's deposits from 10% to 20% of the state's total deposits. And it creates a new entity called a "bankers' bank" that would pool money for investments for several banks and would provide a way for banks to share computers and other services.

Many bankers say they are pleased to have the law but aregoing to approach matters cautiously. "Building branches is expensive," said Beverly McKinney, marketing officer for First Huntington National Bank. "When you look at other sttes, you see banks closing branches because they're not profitable. We want to be bright enough to learn from their mistakes."

"It's a welcome law if and when we decide to branch," said Thomas E. Neal, president of the Bank of West Virginia. "It gives us the latitude to do some things."

Kanawha Valley Bank, the state's largest, is conducting studies to determine where its market strength lies. "I don't anticipate a big rush of branch openings. It behooves all of us to study the market carefully before expanding," said Kanawha Valley president Robert Baronner. His sentiments were echoed by Josh C. Cox Jr., president of Charleston National Bank; William Joerg, vice president of marketing for Kanawha Banking and Trust Co. in Charleston; and Richard Adams, president and chairman of Parkersburgh National Bank.

But all say they're glad the opportunity is there in the law and that, in itself, has caused a controversy. …

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