First National Bank drops ‘Altavista’ from name

There’s something missing from the signs at First National Bank of Altavista.

The three teal-shaded mountain peaks are still there against a stark white background. What’s missing is “of Altavista.”

In January the century-old bank officially changed its name to First National Bank. It was a change without fanfare, and the bank only changed signs at its branches in October, said Rob Gilliam, president.

“The name change is subtle, and the fact that we’re changing the name is subtle,” Gilliam said. “The bank is not changing.”

The bank now has nine offices, located from Altavista to Amherst and from Rustburg to Moneta. Keeping the name of its home town in the bank’s name did not reflect that, Gilliam said. “We’re more than an Altavista bank today,” he said. “Our market’s really Region 2000.”

The name change occurred this year because the new name became available. In the past few years a First National Bank in Rocky Mount merged with other banks to form Carter Bank & Trust. A Christiansburg-based First National Bank with a branch in Forest became StellarOne. “There was an opportunity for us to use the name ‘First National Bank’ without creating any confusion,” Gilliam said.

First National Bank is “a traditional name in our industry and symbolizes a lot about history,” Gilliam said.

The bank is still part of the bank-holding company Pinnacle Bankshares Corp., which last week reported its third quarter earnings.

In the third quarter the bank found more relief from credit quality pressures. At the end of the quarter the bank held $2 million of non-performing loans, compared to about $2.6 million at the end of the second quarter.

Gilliam said that the number of non-performing loans decreased as the bank foreclosed on some properties and as some borrowers found other financing to pay out their loans to First National Bank.

The bank has about $3.8 million in its loan loss reserve, which covers the loss from loans when borrowers default. In the third quarter it put $188,000 into the reserve, a 24 percent decrease from the $248,000 it needed to put in the fund in the third quarter of 2008.

Gilliam said the loan loss provision in the third quarter was more routine than what the bank had to make late last year and early this year. “That’s enabled us to be profitable, but at much lower levels than in 2007, which was our highest performing year ever,” he said.

Net income for the third quarter was $237,000, a 49 percent decrease from net income of $462,000 in the third quarter of 2008.

The bank’s non-interest income, which comes from charges such as mortgage origination fees, increased to $867,000, a 15 percent increase from the third quarter of 2008. Gilliam said that many people have been refinancing their mortgages to take advantage of low interest rates.

However, those low interest rates continue to cut the amount of profit that the bank can earn on interest. In the third quarter the bank grossed $4.3 million in interest, compared to about $4.8 million in the third quarter of 2008.

The amount that the bank paid in interest decreased as deposits have repriced to earn lower interest rates.

Gilliam said the bank’s profit margins on interest probably would remain low as the Federal Reserve continues its policies that are keeping interest rates low.