Financial General Bankshares, Inc., a bank holding company here with nearly $2 billion of resources has begun a new "post-Olmsted" era with major changes planned in the company's board of directors and top management.
A group of investors headed by former Navy Secretary and Ambassador to The Netherlands J. William Middendorf II closed a deal ten days ago in which the controlling bloc of Financial General shares was purchased for $15.1 million.
Middendor's group - which in cludes Swiss Banker George Pereira and Occidental Petroleum chairman Armand Hammer - bought 1.2 million shares in the banking firm (22.4 per cent of the stock outstanding) for $12.50 apiece from International Bank of Washington, a diversified financial services firm under order from the Federal Reserve Board to unload its commercial bank holdings.
Over the past two decades, retired Army Gen. George Olmsted was the driving force behind the development of both International and Financial General since his military career in World Warr II and the Korean War.
IB was incorporated in 1920. Olmsted acquired control of it and its banking affiliate. Financial General, in 1955.
After federal bank laws were amended. IB was required to reduce its holdings in the banking firm to less than 25 per cent. Financial General's non-banking assets were spun off to separate firms now part of the IB family.
More recently, the Federal Reserve ordered a further reduction in IB's stock ownership of the banking firm - thus bringing about an end to the role of Olmsted and his associates at Financial General.
Olmsted will not stand for re-election as a Financial General director at the bank firm's annual meeting, scheduled for June 17 in Richmond.
More important, Financial General's president and chief executive officer, retired Gen. Harold K. Johnson, also will not be renominated as a director. He will step down from the company's management at age 65.
Two other current directors associated with Olmsted - former Financil General president William L. Cobb and retired Adm. Arleigh Burke - also will not renamed to the board.
The Financial General board will be enlarged to 21 members, including 13 persons designated by the Middendorf group.
Middendorf said in a brief interview last week that he expects the directors to select him as president and chief executive at an organizational meeting here on June 20.
Over the next six weeks, Middendorf said, he will meet with presidents of the company's 15 subsidiary and affiliated banks and work on long-range and short-range plans.
The former Navy Secretary met with outgoing Financial General president Johnson last week. Middendorf said it is "too early" to detail future changes in company policies. He said current chairman William J. Schuiling will retain a role in the firm's new leadership.
Financial General was incorporated in 1925 as a holding company for Morris Plan banks, institutions named for Virginia Arthur J. Morris, who pioneered consumer credit in this country.
Members banks today operate in Virginia, Maryland, the District, New York and Tennessee. Area banks owned by the company include Union First of D.C., Alexandria National, Arlington Trust, Clarendon Bank & Trust Peoples National of Leesburg, Round Hill National and American Bank of Maryland.
In addition to Middendorf, Pereira and Hammer, other members of the group that purchased Financial General stock are Washington lawyers R. Robert Linowes and Eugene Metzger; former Ambassador to Iran Joseph S. Farland; real estate developer John Safer; William H. G. Fitzgerald; Jackson Stevens, president of a Little Rock investment banking firm; Mr. and Mrs. George O'Neill, of New York; Mason Klinck, Boston, representing unnamed institutional investors; Thomas Wyman, Easton, Md.; Robert McNeil; and Jeremiah Milbank. The last three named are friends and business associates of Middendorf.
Newly nominated to the firm's board are W. W. Johnson, president of Bankers Trust of South Carolina; John Lyons, president of Cates, Lyons & Co., bank analysts; Stanwood Corp. chairman Thomas N. Roboz; plus Farland, Fitzgerald, Hammer, Klinck, Linowes, Middendorf, O'Neill, Pereira, Safer and Wyman.