Eastern Virginia Bankshares Inc. (EVBS)
Interview with:
Joe Shearin, President and CEO
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their
Bank of Northumberland, Hanover Bank and Southside Bank, operating 20 retail branches located in the counties of Caroline, Essex, Gloucester, Hanover, King William, Lancaster, Middlesex, Northumberland, Southampton, Surry and Sussex.

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Eastern Virginia Bankshares has the infrastructure in place to bring small banks into their organization, allowing them to remain local, retain their charter, and operate as an autonomous bank, while having their back office needs handled by EVB

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Regional Banks

Eastern Virginia Bankshares Inc.

330 Hospital Road
Tappahannock, VA 22560
Phone: 804-443-8423

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Joe Shearin
President and CEO

Ron Blevins

Interview conducted by:
Lynn Fosse
Senior Editor

August 2004

Joe A Shearin
President and Chief Executive Office

Work Experience
August 2002 – Present
President and Chief Executive Officer – Eastern Virginia Bankshares, parent to Southside Bank, Bank of Northumberland, and Hanover Bank. 

August 2002 – Present
President and Chief Executive Officer – Southside Bank. 

August 2001 – August 2002
President and Chief Operating Officer – Southside Bank 

Previous bank experience includes executive level leadership roles with Branch Banking and Trust Company (BB&T), Signet Bank, and First Federal Savings Bank.

Graduate of North Carolina Wesleyan College

Company Profile:
Eastern Virginia Bankshares, the parent company for Bank of Northumberland, Hanover Bank and Southside Bank, operates 20 retail branches located in the counties of Caroline, Essex, Gloucester, Hanover, King William, Lancaster, Middlesex, Northumberland, Southampton, Surry and Sussex. The Company's stock trades on the NASDAQ Small Cap Market System under the symbol EVBS.

CEOCFOinterviews: Mr. Shearin, you have been CEO for about two years now. How has Eastern Virginia Bankshares Inc. changed under your leadership?

Mr. Shearin: “I think the biggest change we have experienced over the last few years is utilizing our holding company structure. Our holding company was formed in 1997.  Heretofore, we had three banks working independently of one another; and, consequently, not working toward a holding company structure. This autonomy did not permit the holding company to take advantage of economies of scale. During the last few years, we have made a concerted effort to streamline the work flow, standardize procedures, and channel many activities up to the holding company, meaning that rather than having the same job done three times, it is now done on a consolidated bases."

CEOCFOinterviews: Have you built a new facility?

Mr. Shearin: “Yes, we opened a sixteen thousand square foot state-of-the-art technology center in Tappahannock over the July fourth weekend of 2003.”

CEOCFOinterviews: Will you tell us about the structure of the holding company?

Mr. Shearin: “Eastern Virginia Bankshares is a holding company that was formed in December of 1997, when Southside Bank and Bank of Northumberland, both of which originated in 1910, joined forces to form a merger of equals in some respects. In doing so, the thrust was to utilize a centralized operation center and enjoy the synergies that would unite them. In 2002, Eastern Virginia Bankshares opened Hanover Bank as a de novo.   Hanover Bank is located in Hanover County, which is a growth market outside of Richmond.  As these three banks were homogeneous in many regards, consolidation would foster marketability of the shares in the open markets, thereby, maximizing shareholder value.”

CEOCFOinterviews: Why do you have separate banks? Why not use just one name?

Mr. Blevins: “The reason that we retain original bank names is because the Bank of Northumberland and Southside Bank, both of which are 94 years old, are steeped in tradition and they enjoy a very loyal customer base. Name recognition offers tremendous value in these types of rural markets. Our rural-based markets are chiefly comprised of long-standing natives who know and respect “their bank,” meaning they identify with Southside Bank or Bank of Northumberland. Changing names to these two 94-year old strongholds would do a disservice to our company. There is a strong sense of community in Hanover County.  We think that the loyalty and tradition associated with the names of each of the respective subsidiaries is a strong part of the identity that has served us so well for almost 100 years."

CEOCFOinterviews: How is the economy in the areas you serve?

Mr. Shearin: “The Bank of Northumberland and Southside Bank serve markets that are rural in nature and that have a lot of waterfront communities. Our local economies tend to be stable.  While we typically don’t see robust growth in our economy, when the economy starts ticking downward, we don’t have the drop-off either. We typically do not parallel cyclical economic fluctuations, as we enjoy moderate, steady growth."

CEOCFOinterviews: Why are people coming to your banks and what are you providing for them?

Mr. Shearin: “The reason people are banking with us is primarily due to loyalty.  By virtue of our longevity, we have built a loyal following. We attract new customers with our strong customer service skills. We have long-term employees whose tenure is on average fifteen plus years. They are the foundation of our culture, and they understand service quality excellence and how to deliver that to our customer base.”

CEOCFOinterviews: What do you provide that customers are not getting elsewhere?

Mr. Shearin: “We have a wide-range of products that can be found at any of the regional banks. What differentiates ourselves from the competition and where we derive the most pride is in the area of personalized service that customers have become to count on when they walk into one of our branches. For example, we create an inviting lobby atmosphere by serving coffee and donuts and providing morning newspapers for our customers. We staff our branches so that there is no waiting in-line. Our retail staff is thoroughly trained to handle customer transactions efficiently and call customers by name. We want our customers to be known when they walk in the door and leave with a sense of community banking. Yes, we have all of the products that every other bank offers. But, it is the small “extras” that mean so much to customers in rural markets.”

CEOCFOinterviews: You have entered joint ventures in the mortgage area, will you tell us about that?

Mr. Shearin: “We saw the need in our communities for the mortgage business. We felt we were not serving our customers in a total relationship manner. We had a very good three-year arm product in most of our branches, and we had a fifteen and thirty-year product that wasn’t as aggressive as the secondary market. We felt that there was a void in our mortgage product offerings and that we were not fulfilling our mission to provide total banking relationship. That is why we started looking for acquisitions or partners to support this product line. We conducted an exhaustive search before we found a partner, Southern Trust Mortgage in Norfolk, whose philosophy toward customer service and relationship banking mirrored ours. In addition, they complement our sales team with strong back office operational support.”

CEOCFOinterviews: As the interest rates change, are you concerned about the mortgage area?

Mr. Shearin: “You are always concerned, but we believe that in our marketplace because of the stable economy we enjoy with the riverfront communities that real estate is going to continue to be bought and sold by people migrating from Richmond and Northern Virginia. The metropolitan markets have an insatiable appetite for the placid lifestyle that   these communities afford. For this reason, we think we will enjoy a sustained demand for mortgage services.”

CEOCFOinterviews: Are you primarily consumer banking or do you do any business banking?

Mr. Shearin: “We have primarily been a retail bank. Southside Bank extended its focus a few years ago to include commercial lending, more particularly in small business lending. The Bank of Northumberland has been doing commercial lending over the years, and Hanover Bank was set up primarily as a small business commercial lender. We think that Hanover is one of our fastest growing areas. The area that is going to sustain our loan growth is in the small business commercial area.”

CEOCFOinterviews: Are there products and services that you are not currently offering that you would like to offer?

Mr. Shearin: “We have a full-range of products that could match any bank in our marketplace such as online banking, investment service, mortgage services, and insurance services. We have all the banking products to be the one-stop shop of financial services, which is in alignment with our goal.”

CEOCFOinterviews: Are people taking advantage of a large variety of your services?

Mr. Shearin: “Yes. While some of our product offerings are relatively new, our employees embrace our culture and are trained well to be proficient with the sales and delivery of all of our services. We are seeing a huge increase in the amount of activity in these new products.”

CEOCFOinterviews: Is online banking a big feature for you?

Mr. Shearin: “Yes. There are two primary sectors who demand “clicks” over “bricks.”   The younger population demands access to their accounts 24-7 from the convenience of their home, apartment, or dorm. Our senior citizens, many of whom still expect their hands to be held, have been early adopters of technology and are taking advantage of online services. It has been surprising how many customers are using this medium of banking. We have recently introduced our business online product, and it is more successful than we anticipated.”

CEOCFOinterviews: How do you attract new business?

Mr. Shearin: “Because we serve five distinct markets and have different economies and products that we offer in those markets, our marketing efforts are geographic specific.    In addition, we train our managers and commercial lenders to be proactive in seeking new business. They are involved in civic organizations, and they strive to be the banker and bank of choice for new residents by reaching them first. They engage in an active customer call program and are quick responders to loan requests. ”

CEOCFOinterviews: Is there a particular focus in community activities?

Mr. Shearin: “It depends on the community. We encourage our managers and commercial lenders to be involved in the community. The banks strive to be good corporate citizens, and the employees are generous with their time in terms of supporting charities of their choice. Giving back to the communities in which we live and work is a part of our rural culture, and it is very rewarding.”

CEOCFOinterviews: What do you see as far as growth in the future?

Mr. Shearin: “Our focus during the last few years has centered around finding ways to take advantage of economies of scale. We have invested in our company to ensure that our operations and technology center are in a state of preparedness in terms of   infrastructure and technology to support de novo branching growth opportunities. We will continue to open branches in markets where we see a need for a community bank. We have the infrastructure built to facilitate bringing small banks into our organization, handling their back room operations, and allowing them to retain their local identity. De novo branching is a major initiative in our strategic plan, as we see this is our primary growth vehicle.”

CEOCFOinterviews: How are you doing financially?

Mr. Blevins: “Financially, we are having another good year. 2003 was an outstanding year, and 2004 has been stable, and we anticipate that we will continue to sustain stable to moderate growth."

CEOCFOinterviews: As CEO, what are your functions on a daily basis?

Mr. Shearin: “I do interviews like these and oversee corporate functions at Eastern Virginia Bankshares. Also, much of my time is devoted to running Southside Bank. It is the day-to-day nuts and bolts of running a business:  loans, deposits, marketing, HR issues and the overall operations of the company. It is like being a fireman in an organization.”

CEOCFOinterviews: In closing, what would you like readers to take from this interview?

Mr. Shearin: “Our goal is to continue to grow our earnings per share at least 10% per year and our asset base at least 10% per year as well as looking for acquisition and de novo branching opportunities that would make sense for our organization.”


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