Former Gateway CEO opens firm in Norfolk

NORFOLK

The former CEO and principal organizer of Gateway Bank & Trust Co. has opened an investment banking firm in Norfolk to serve community banks seeking capital.

For some institutions, the pressure to raise capital will continue for another two to three years because of declining real estate values, said D. Ben Berry, CEO of recently organized Equity Development Inc. The firm, he said, expects to work with banks east of the Mississippi River with assets of $100 million to $1 billion.

Berry said the firm plans to open two more offices, one in the Northeast and one in the Raleigh-Durham-Chapel Hill, N.C., area, early next year.

A Hertford, N.C., native, Berry headed Gateway from its formation in 1998 until its merger with Hampton Roads Bankshares Inc. at year-end 2008. The consolidation was prompted by a sudden deterioration in Gateway's capital. He was named president of Hampton Roads Bankshares after the merger but resigned after 3-1/2 months in the post.

Hampton Roads Bankshares, whose assets grew to $3.2 billion, was later crippled by heavy losses on loans that Gateway and Bank of Hampton Roads made before the merger. The parent company received a lifesaving infusion of capital late last year from a handful of private equity firms.

After leaving Hampton Roads Bankshares, Berry became CEO of First American Financial Management, a North Carolina firm organized to acquire community banks. An agreement to buy a bank near Salisbury, N.C., in 2009 was called off, and the firm eventually disbanded because transactions involving Federal Deposit Insurance Corp. assistance for failed banks became less attractive to investors, he said.

Berry, 56, later worked as a principal and then as an adviser with a bank consulting firm, Matthews, Young & Associates, in Hillsborough, N.C.

Equity Development's organizers include two others who have worked with financial institutions. Vincent G. Thomas II, senior vice president and managing director, had been a senior vice president at the investment banking firm McKinnon & Co. in Norfolk. Earlier, he worked with Griffin Financial Group, a Reading, Pa.-based investment banking firm. The third organizer, J. Timothy O'Rourke, is chairman, president and CEO of Matthews, Young & Associates and Equity Development's chairman.

Tom Shean, (757) 446-2379, tom.shean@pilotonline.com