A former member of the Albemarle First Bank board of directors claims in a recent magazine article that the bank ran into trouble because of reckless lending that essentially made it a “welfare agency.”

In the fall edition of Region Focus, retired economics professor and banking veteran Richard Selden portrays the early loan committee at Albemarle First as a bunch of yes men afraid to ask tough questions. “That was lacking at Albemarle First,” Selden says in the story, which notes that in 2002, the bank had among the nation’s highest level of non-performing (i.e. seriously delinquent) loans at 5.27 percent.

The story also points out that although the two institutions were launched at about the same time, Albemarle First held, as of June 30, just 3.49 percent of area bank deposits, while rival Virginia National Bank captured 8.45 percent of the market.

The eight-page story might hold the interest only of banking aficionados were it not for the colorful comments of Selden and local developer Richard Spurzem, who blasts the bank’s board: “These people took a bank in one of the best markets in the country, and they couldn’t do it.”

However, the magazine points out that Albemarle First overcame a $1.8 million hit from a check-kiting scheme, a fizzled sale, and it managed to eventually turn a sufficient profit that it could be sold for an amount that provided shareholders a nearly six percent annual gain on their investment.

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