Six Virginia companies have made Fortune’s list of 100 Best Companies to Work For.
McLean-based Hilton Worldwide is ranked on the list for the first time.
The Virginia companies are:
• Navy Federal Credit Union, Vienna, No. 44, up from No. 72 last year.
• Hilton Worldwide, McLean, No. 56 in its first time on the list.
• CustomInk, Fairfax, No. 58, up from No. 62 last year.
• CarMax, Richmond, No. 85, previously No. 64.
• Capital One Financial, McLean, No. 88, previously No. 91
• Mars, McLean, No. 99, No. 85 last year.
In adding Hilton to the list, the magazine cited its Women's Mentoring Program and a Women's Team Member Resource Group, which hosts special events on leadership.
In addition, the company is ramping up its paid parental leave program, offering two weeks to fathers and adoptive parents and giving mothers 10 weeks of leave after childbirth.
Hampden-Sydney College has named a new president, John Lawrence “Larry” Stimpert, vice president for academic affairs at DePauw University in Indiana.
Stimpert also is professor of economics and management at DePauw, which is in Greencastle, Ind. As an administrator, he oversaw 250 full- and part-time faculty in nearly 30 academic departments and interdisciplinary programs.
Before DePauw, Stimpert was professor of economics and business at Colorado College. He co-directed a campus-wide master plan effort, leading a delegation of Colorado faculty and staff on fact-finding and benchmarking visits to Davidson, Carleton and Grinnell colleges.
While on sabbatical from Colorado during the 2009-2010 academic year, he was a Distinguished Visiting Professor in the Management Department of the U.S. Air Force Academy.
He also served as an ACE Fellow and special assistant to the president at Earlham College during the 2002-2003 academic year. Before then, he was a faculty member at the Eli Broad College of Business at Michigan State University.
Before starting his academic career, Stimpert worked for the Southern Railway Co. and for Norfolk Southern Corp. after Southern's merger with Norfolk and Western. He later worked for the Chicago and North Western Transportation Co.
Stimpert received his bachelor’s in economics from Illinois Wesleyan University, his MBA from Columbia University and his doctorate from the University of Illinois at Urbana-Champaign.
He and his wife, Lesley, have two children, Connor, 16, and Renee, 14.
An Orlando-area economic development executive has been named the new president and CEO of the Hampton Roads Economic Development Alliance.
Rick L. Weddle will join HREDA in April. He has been president and CEO of the Orlando Economic Development Commission since March 2011.
“This position is one of the most critical in our region,” John Padgett, chairman of the board of HREDA, said in a statement. “We needed someone who understands the national and global economy, is both personable and aggressive and also a quick study. Rick Weddle is that person.”
Weddle will succeed Kevin Sweeney, a retired Navy rear admiral who has been interim director of HREDA since the resignation of Darryl Gosnell early last year.
Weddle currently heads an organization with 26 employees that represents Orange, Seminole, Lake and Osceola counties, and the city of Orlando.
During Weddle’s tenure, the Orlando area saw the creation of 17,000 new jobs with a combined annual payroll of $800 million and the location or expansion of 150 facilities and the investment of $1.1 billion.
Before Orlando, he was for seven years the president and CEO of the Research Triangle Foundation in North Carolina, owner and developer of The Research Triangle Park. During that time the park attracted projects investing more than over $800 million and creating more than 6,200 jobs.
He also has led the Greater Phoenix Economic Council and the Toledo, Ohio, Regional Growth Partnership.
Weddle is a native of Oklahoma and a graduate of the University of Oklahoma.
When Virginia Business produced its first issue in March 1986, the commonwealth was confronted with the same question it faces today: How does it use its advantages to remain competitive in a rapidly changing, international marketplace?
In 1986, Virginia had (and still has) a number of assets, including one of the top deep-water ports on the East Coast, a well-regarded higher-education system, a skilled workforce and proximity to Washington, D.C.
Nonetheless, many industries that helped support the state’s economy 30 years ago — textiles, tobacco and furniture-making, for example — have declined sharply. Today another economic pillar, federal defense spending, is under pressure. Which of Virginia’s current industries will still be thriving 30 years from now, in 2046?
By 1986, an urban corridor from Boston to Washington had expanded to form an arc of affluent consumers around the Chesapeake Bay. This “Golden Crescent,” from the Potomac to the Atlantic, began to attract the notice of many companies.
Today, business leaders are promoting a combination of two sections of the Crescent, the Richmond and Hampton Roads areas, to form a mega-region. They believe the combined urban expanse will be more likely than the individual areas to attract attention from major companies and international investors.
In separate interviews, former Gov. Gerald Baliles (elected in 1985) and Gov. Terry McAuliffe reflect on the state of Virginia’s economy in 1986 and today, offering some clues on how the economy will change in the next 30 years. Both men stress the importance of foreign trade missions, which can bring foreign investment and new jobs to the commonwealth).
Virginia Business isn’t alone in celebrating a major milestone this year. We offer a list of companies marking anniversaries, ranging 10 to 250 years. Three of these companies are profiled: Chesapeake-based Dollar Tree Inc., Winchester-based Shockey Companies and Hot Springs-based Omni Homestead Resort.
The anniversary section also includes the magazine’s annual list of Most Influential Virginians, individuals and families that have been catalysts for change in their industry, region or the state economy. In observance of the magazine’s anniversary, all were asked, “What were you doing in 1986?”
The anniversary section concludes with a timeline looking at business events reported in Virginia Business since 1986.
Cover story A big-league move?
Business groups believe a Richmond-Hampton Roads mega-region will be a major competitor. by Paula C. Squires
Interviews with Former Gov. Gerald Baliles and Gov. Terry McAuliffe 1986 versus 2016
Baliles and McAuliffe discuss how Virginia’s economy has developed and why it still needs to change. by Robert Powell
Memorable milestones Major anniversaries
Virginia companies celebrate 10 to 250 years in business. by Robert Powell
Virginia’s economy has been transformed during the past 30 years and could change even more in coming years.
To see where we have come from and where we are going, Virginia Business interviewed former Gov. Gerald Baliles and Gov. Terry McAuliffe.
Baliles, a Democrat, served as governor from 1986 to 1990. He had been in office fewer than three months when Virginia Business published its first issue in March 1986.
Baliles’ years in office are probably best remembered for a $422 million-a-year transportation funding package that passed during a special session in 1986. Another comprehensive transportation funding bill wouldn’t pass again until 2013.
In his interview, Baliles says that Virginia in 1986 was ill-prepared for the economic changes it was about to face. That was why his administration put high priority on three building blocks of economic development: transportation, education and trade. Many of the traditional Virginia industries that have faded in the past 30 years — tobacco, textiles and furniture-making — already were showing strain in the late 1980s.
After his term ended in 1990, Baliles practiced law at the firm Hunton & Williams, largely working on aviation and international law. Then for eight years, he was director of the Miller Center at the University of Virginia, which specializes in presidential scholarship and public policy. He retired in 2014. Baliles and his wife, Robin, live in Charlottesville.
McAuliffe became the 72nd governor of Virginia in 2014, after heading a Democratic ticket that swept all three of the commonwealth’s top offices the previous fall.
McAuliffe, who was a young bank chairman in Washington in 1986, has made economic development a high priority of his administration. His news releases keep a running tally of the number of deals closed and jobs created since he took office.
When Baliles was governor, Democrats held sway in the General Assembly. McAuliffe, on the other hand, has faced stiff opposition from a Republican-controlled legislature, especially on highly charged issues such as the expansion of Medicaid.
He has had more success in promoting economic development issues, although a bad deal involving $1.4 million in state incentives has prompted extra scrutiny of how well his administration vets business prospects.
McAuliffe talks frequently about the need to create a new Virginia economy that is less dependent on federal spending. This new economy emphasizes the use of innovation and new technology to make the commonwealth a national leader in areas such as cybersecurity and personalized medicine.
Virginia Business interviewed Baliles at his office in Charlottesville on Dec. 31.
“Today’s governor’s economic incentive fund did not exist at the time. Few other programs were available for use.” — former Gov. Gerald Baliles
Virginia Business: What were some of the major economic issues that you were dealing with in 1986?
Baliles: Well, let’s start with transportation needs, including roads, airports and the ports. They were not ready for significant changes in economic development and business opportunities. The education system was not business-ready. Teacher pay was low. The state was not providing full funding of its share. There were few training programs, few links between business and education. Incentives were few. Virginia was not ready for the emerging international economy. The European Union was a few years away, but there were clear signs that the international trade picture was going to be part of the lifeblood of the global economy, and Virginia would no longer be competing with states within the Union but with many countries beyond our borders: China, Germany and India. So the way I saw it, Virginia was vulnerable to economic changes.
VB: Several industries that were big in Virginia 30 years ago — textiles, tobacco and furniture-making — have declined sharply since then. Were there signs of trouble then?
Baliles: Yes, definitely. Tobacco was feeling the effects of the increasing public awareness of health problems. Outsourcing and international competition were beginning to have an impact on furniture and textiles. Textiles began to face pressure from the cheaper imports from Asia and Mexico. They were affected by a strong dollar that existed at the time and the emergence of international trade agreements.
VB: What industries that are prominent today were just beginning to gain a foothold in 1986?
Baliles: Obviously technology. Cellphones were the sizes of suitcases, and computer systems were the sizes of small rooms. The Internet was just becoming a tool for business, but there was no widely used email, no worldwide search engines. Other industries were gaining a foothold. The Virginia wine industry was in its infancy. The tourism industry lacked coordination and an international reputation except perhaps for Colonial Williamsburg. There was double-digit growth in information services; some health-care industries were just beginning in the ’80s; and businesses that were related to environmental compliance were just beginning.
VB: How did Virginia compete for business projects then?
Baliles: Well, No. 1, we had superior geographical features: the deepest, most significant deep-water port on the East Coast, our proximity to the nation’s capital (with Dulles being the gateway to international aviation) and the fact we are within a day’s drive of 60 percent of the American population. Plus, the strong support of the business community gave us the ability to compete in the emerging international market.
Trade missions were also a way to compete, and during my time in office, foreign businesses announced more than 100 new ventures or expansions in the commonwealth; that growth represented somewhere between $650 million and $700 million. Exports from Virginia ports set a record. In 1989, exports from Virginia accounted for 25 percent of its economic growth.
In addition, I promoted international education within the state, the teaching of foreign languages and the creation of the Governor’s Foreign Language Academies that provided total emersion programs for high school students who wanted to enroll. We used schools that were closed for the summer …
Then we created a partnership with the National Geographic organization to teach geography in our schools so that ultimately we would have a more competitive workforce to offer our businesses engaged in international trade and economic development.
Today’s governor’s economic incentive fund did not exist at the time. Few other programs were available for use. There was a small industrial rail access program that was funded by the General Assembly occasionally, and there may have been a few special funding initiatives in the budget, but there were few programs that existed that could be used quickly and competitively in the marketplace.
VB: What economic policies put into effect during your administration are bearing fruit today?
Baliles: I’ll just list several. We created a secretary of economic development. We separated it from other functions and put the focus strictly on economic development and trade. Today that department has been renamed commerce and trade. We created a Southwest Virginia economic development grant program. We started a state revolving loan program in ’88 for new and expanding industries. We set up five small-business development centers to assist small-business owners.
We put an emphasis on agriculture industry throughout our state agencies. We created a network of farmers markets that exists today. Then we created something called the Virginia’s Finest trademark program that has been wildly successful.
We set up a state commercial space advocate to start touting the potential for space flights. We clarified the role of the Center for Innovative Technology that was created under [Gov. Chuck] Robb’s administration. It was controversial at the time, but I think it’s been largely responsible for attracting a lot of what are called “beltway technology businesses.”
Then there was the Virginia Israel Commission [which encouraged cultural and business ties between Virginia and Israel]. Then of course there were improvements in transportation … tripling the funding for all the road building that was going on in the state.
VB: How does your relationship with the General Assembly compare with McAuliffe’s today?
Baliles: Thirty years ago my situation was different from what governors have experienced since. No. 1, the executive and legislative branches were of the same party. In my case, I had served in the legislature for six years. I had served on the appropriations committees so I saw the budgets and the pictures and the images of where the problems existed around the state. I knew people in the agencies of government down five and six levels, and in the legislature, I had served on committees for corporations, insurance and banking, agriculture, natural resources, as well as appropriations. So that gave me a pretty good view of the state but also the people who served on those committees and where they were concerned about certain issues.
Then as attorney general I had to represent them, so I knew something about the political process, the legal process, the legislative process and, during that course of time, friendships were formed that existed across party lines. When I went into an area, say Staunton, it was represented back then by a Republican, Delegate Pete Giesen. I would call Pete when I was coming to town, saying, “I’m going to be there for an event. I want you to know about it. I’d like for you to join me on the stage.” It gets photographed. It helps him, it helps me. So the relationships were quite good …
I think that spending time on communication and friendships made a big difference. But that’s true across the eras, across generations. What was different then from now, I think, is that Virginia at the time probably prided itself as being more independent of national politics than is the case today, and people didn’t make politics their only life, which seems somewhat common today across the nation. …
The one thing about today versus 30 years ago is the constant but accelerating pace of events. They can often overwhelm us and challenge our capacity to absorb the meaning of this rapid rate of change.
RELATED STORY: Baliles talks about the value of context in politics and international trade.
The magazine talked with McAuliffe at his office in the Patrick Henry Building in Richmond on Dec. 18.
“I talk about cybersecurity. I talk about data analytics. I talk about human genome sequencing. These are the jobs of the future.” — Gov. Terry McAuliffe
VB: I wondered if you had any personal memories of what the Virginia economy looked like back in ’86. You were a bank chairman at that time. You probably had a pretty good vantage point to see what the economy looked like back then.
McAuliffe: Talk about a different economy. It resembled nothing like today. The Internet hadn’t been invented yet. There were no data centers. When I talk about building a new Virginia economy; all these areas that I talk about, none of them existed back then. It was the old-structured economy of the past. You know, investment banking had been going on and real estate was obviously a big play back then, but today is totally different. I mean it’s just transformed with information.
VB: Turning to today’s economy, you talk about the new Virginia economy. Where do you want to take the Virginia economy?
McAuliffe: This is what I talk about every day. You know, Virginia is blessed: 27 military installations, the largest naval base in the world, the Pentagon, the CIA, Quantico, all huge dynamic assets for us.
But what we have realized is the spending levels in defense, as we’ve known them, which has really built the Virginia economy, are changing and aren’t going to be the same. We’re still going to have obviously a lot of defense spending, but we’re not going to have it at the same level that we’ve had it in the past. I think it was $58.8 billion in Northern Virginia, $11.8 billion in Hampton Roads. We have to use this time now because in 2011, 2012 and 2013 we lost $9.8 billion in direct defense contracts, most of it in Northern Virginia. George Mason University said it could equate to a loss of 154,000 jobs. We had a [federal government shutdown in 2013]. The effects of those actions are still rippling through our economy.
So the point I always try to make is, we have to move away from [dependence on federal spending]. We’ve been very successful getting federal government business, but we have to bring in the 21st-century technologies. I talk about cybersecurity. I talk about data analytics. I talk about human genome sequencing. These are the jobs of the future.
The one area the federal government will spend billions on is cybersecurity. I want Virginia to be the cybersecurity capital in America. It’s really us and California. We have 450 cyber companies today, and the FBI cyber command is at Quantico.
Right now in Virginia I have 30,000 jobs open in the technology space. Eighteen thousand of those jobs are cyber. Those 18,000 jobs, starting pay is $88,000. So those 30,000 jobs equates to [$2.6 billion] of annual payroll that we’re not getting today.
[The budget I released in December includes] a billion-dollar investment in K-12 and higher ed. Huge emphasis on cybersecurity, building these cyber centers of excellence, which we need to do. I want every one of our community colleges to be a center of excellence, so a lot of investment.
I talk a lot about renewable energy. I just, as you know, did my first permit by rule for an 80-megawatt facility down in the Eastern Shore. Let me tell you why renewable energy is important. No. 1, it is important for the environment, but No. 2, someone is going to manufacture the solar panels. We should do that here in Virginia …
[Reason No. 3 for investing in renewable energy] is that Amazon, Microsoft, Google have billions of dollars of investment in Virginia today, thousands of employees. … They make it clear that they will not put any more facilities in any state that will not /cannot deliver renewable energy to that facility. So if we as a state want to be in the game of the Googles, the Microsofts, the Amazons, we’ve got to have renewable energy, and it’s not something we’ve really been out front on …
[Inova Health System has just bought the 117-acre former Exxon Mobil corporate campus in Fairfax County to be the site of its Inova Center for Personalized Health.] This could revolutionize medicine. … They can tell at birth through the genetic testing … what illnesses a child may be susceptible to or what they could do early on in treatment. I want us to be the global leader on that …
My focus has been on the economy, growing, diversifying the economy, and we’ve had great success. I think 2016, from the handshake deals I have now, is going to be our best year ever, very optimistic.
VB: Is there an industry that you haven’t been able to crack yet?
McAuliffe: I’ve tried aggressively to try to get an auto manufacturer. I’m the ultimate optimist … I went up, quietly, secretly to meet with the chairman [of an auto company] twice. We were in the running, we didn’t get it, and the reason is we had no supply chain in Virginia.
So I don’t know if we’ll ever get into auto manufacturing. South Carolina, Mississippi, Georgia, all these Southern states many years ago got in the game, and I’ve tried hard, but we don’t have the supply chain …
VB: Is there anything we didn’t cover that you want to add?
McAuliffe: Did we talk about the veterans at all? I should mention that because it’s a huge piece of our workforce … We have 800,000 veterans in Virginia, per-capita more than any state, more female veterans, more veterans under the age of 25, than any state in America.
You want to talk about building a dynamic workforce, these veterans are highly motivated, disciplined, dedicated. Ten [thousand] to 15,000 a year transition out of active duty into the veteran status. I want them to stay in Virginia. That’s why you’ve seen so much investment in my budget …
Let them go to the community college and get a credential on code writing, I can move you right into those jobs in Northern Virginia and start out at $88,000. So I talk about putting career counselors for the veterans inside of community colleges. We did a lot of investment to make sure that these veterans get credit for their active-duty military service, and we give them the credits they need in order to move them right into a skilled workforce.
Virginia has received a reprieve from a new round of sequestration, across-the-board federal budget cuts that went into effect during a congressional impasse five years ago.
A budget deal passed by Congress last fall will blunt the effects of sequestration for the next two years.
Federal budget trends are important in Virginia because so much of its economy is dependent on government spending. Federal defense spending alone accounts for 11.8 percent of the commonwealth’s gross domestic product (GDP), according to a recent Old Dominion University study.
From 2010 to 2012, defense spending in Virginia fell $9.8 billion, with most of the damage being felt in Northern Virginia.
Those cuts were a big factor in the commonwealth’s declining GDP in recent years. Virginia’s economy grew a miniscule 0.02 percent in 2014. The ODU report forecasts an improved growth rate of 1.98 percent this year.
Virginia’s dependence on federal spending is one reason its star has faded in some rankings of the best states to do business in the U.S. Once consistently ranked as No.1 by the financial television network CNBC, for example, the Old Dominion slipped to No. 12 on the latest list.
Gov. Terry McAuliffe sees the federal budget deal as a two-year window that Virginia should wisely use to diversify its economy. Almost every announcement of a new economic development project in the commonwealth includes a reference to his efforts to create a “New Virginia Economy.”
A more diversified state economy will be built on the assets that are outlined in charts and lists on the following pages.
The Port of Virginia, for example, is the third-busiest on the East Coast. Virginia has the second-highest concentration of technology workers in the country. Many of the commonwealth’s colleges and universities are ranked among the best in the country. Their prominence encourages many of Virginia’s top students to stay in their home state, preventing a potential brain drain.
In addition you will find:
Lists of Virginia’s largest publicly traded and private companies, including 35 companies listed on the Fortune 1000, plus the 28 businesses ranked among the 100 fastest-growing in the nation by Inc. magazine.
Enrollment at Virginia’s public and private colleges and a list of their endowments.
Virginia’s top firms in construction, commercial real estate, banking, insurance, health care, accounting and other fields.
The state’s 25 top hospitals, based on annual net patient revenue.
Major contributions by Virginia individuals, corporations and foundations.
These resources can help the commonwealth blaze a new path.
The past year has been a time of change for many of Virginia’s largest publicly traded companies. One of them is fighting off a takeover bid. Others have divided themselves in two. A third has more than doubled its size. Two more are about to disappear because of buyouts.
As this issue goes to press, Norfolk Southern Corp. has been steadfast in its rejection of takeover offers from Calgary, Canada-based Canadian Pacific Ltd. Norfolk Southern has said it is focused on cutting costs to improve profitability. The Norfolk-based company, a major transporter of coal, automotive and industrial products, has been hurt by a decline in the coal industry.
Canadian Pacific has stopped short of a proxy battle with Norfolk Southern. Instead Canadian Pacific plans to submit a nonbinding resolution to Norfolk Southern shareholders calling for the board to enter negotiations with its Canadian suitor.
Meanwhile, Gannett Co. Inc., a McLean-based media company, separated its publishing division from its broadcasting operations. The publishing unit, which owns newspapers in 92 markets, was spun off in June as a publicly traded company. It kept the Gannett name. The remaining broadcast and digital company, which has 46 television stations, is now called Tegna Inc.
Another company that has divided itself is Falls Church-based CSC (Computer Sciences Corp.) The public-sector business of CSC was spun off and merged with Fairfax-based SRA International to form CSRA Inc.
Chesapeake-based Dollar Tree Inc., on the other hand, has more than doubled in size with its July acquisition of Family Dollar, based in Matthews, N.C. Dollar Tree had to ward off a competing bid for Family Dollar from Dollar General. The combined company now operates more than 13,600 stores with expected annual sales of $19 billion.
Virginia will soon lose two of its largest public companies — Waynesboro-based wireless telephone provider Ntelos Holdings Corp. and Richmond-based television station owner Media General Inc.
Edinburg-based Shenandoah Telecommunications announced in August that it is acquiring Ntelos in an all-cash deal worth about $640 million. When the transaction closes this year, Shentel will have more than a million wireless customers. In addition, Arlington-based Towers Watson, which recently merged with Willis Group, will move its headquarters to Ireland.
Irving, Texas-based Nexstar Broadcasting Group in January announced it had reached a $4.6 billion deal with Media General after months of sparring between the companies. The Nexstar deal scuttled Media General’s merger plans with Des Moines, Iowa-based Meredith Corp., which was paid a $60 million breakup fee. The combined company will have 171 television stations in 100 markets.
Education is a big issue in Virginia. There is an ongoing debate about the rising cost of attending the commonwealth’s public colleges and universities and the increasing debt many students face. There also is plenty of discussion about the role education, especially at community colleges, should play in preparing a skilled workforce.
The biggest Virginia education story of 2015, however, involved a private women’s college in rural Amherst County.
The administration and board of trustees of Sweet Briar College announced in early March last year that the 114-year-old school would close in August because of “insurmountable” financial problems.
The shutdown, however, didn’t happen. It was opposed by alumnae, faculty and students who filed a series of legal challenges. Alums formed an organization called Saving Sweet Briar to raise money for the school.
Finally, in a mediated settlement announced in June, the president and board resigned, and the school was given at least one additional year to improve its enrollment and finances. The alumnae met one deadline in September when they turned over $3.6 million they had raised in just a few months.
The following pages offer a look at the enrollments at Virginia’s public and private colleges, including its community colleges.
The commonwealth’s second-biggest community college is Tidewater Community, the 17th largest associate degree producer among the nation’s two-year institutions. TCC is profiled on the next page as part of the magazine’s continuing series on the economic impact of Virginia’s colleges and universities.
Another story looks at the performance of endowments at Virginia colleges and universities. A national report finds that the average increase in the market value of endowments at more than 800 colleges and universities fell to 2.5 percent last year, down from 15.5 percent in fiscal year 2014.
Last year was a time of mergers and acquisitions for several Virginia banks.
McLean-based Capital One Financial Corp., the nation’s seventh-largest commercial bank, completed its $9 billion acquisition of General Electric Capital Corp.’s Healthcare Financial Services lending business in December.
The GE unit is being combined with Capital One’s existing health-care banking business to form Capital One Healthcare, a provider of financial services with more than $11 billion in total outstanding balances. The deal represents one of Capital One’s latest moves beyond its credit card business.
In January 2015, Portsmouth-based TowneBank completed its $275 million acquisition of Richmond-based Franklin Financial Corp., the parent company of Franklin Federal Savings Bank.
In December, TowneBank said it planned to acquire Chesapeake-based Monarch Financial Holdings Inc., the parent company of Monarch Bank, in a deal worth $220.6 million. The acquisition, expected to close in the second quarter, would create a financial institution with $7.3 billion in assets and a 20.6 percent share of bank deposits in the Hampton Roads market.
In October, Charlotte, N.C.-based Park Sterling Corp. announced plans to acquire the Glen Allen-based holding company of First Capital Bank in a deal valued at $82.5 million. First Capital operates eight branches in the Richmond area. The combined company will have about $3.1 billion in total assets, $2.2 billion in loans, $2.4 billion in total deposits and 60 offices in four states.
Meanwhile, in Southern Virginia, Danville-based American National Bankshares in January 2015 completed its $24.2 million merger with MainStreet BankShares Inc., the holding company for Franklin Community Bank. The deal expanded American National’s footprint into the Roanoke metro area, adding three bank branches in Franklin County and the Smith Mountain Lake area.
The merger movement has continued this year. Virginia Beach-based Hampton Roads Bankshares Inc., the parent company of the Bank of Hampton Roads, and Richmond-based Xenith Bankshares Inc., the holding company for Xenith Bank, in February announced plans to combine their operations in a $107.2 million merger. It would create a Richmond-based company retaining the Xenith name that would have total assets of $2.9 billion and deposits of $2.5 billion.
The biggest story in Virginia health care last year was Inova Health System’s purchase of the 117-acre former Exxon Mobil campus in Fairfax County.
The property, bought for $180 million, will be the site of Inova’s Center for Personalized Health, a campus for physicians, researchers and educators working in the growing field of personalized medicine.
The field involves medical treatments tailored to the needs of patients based on their genomes.
Inova’s move has been hailed as pivotal in Northern Virginia’s efforts to diversify its economy and become less dependent on federal spending.
Gov. Terry McAuliffe also has identified personalized medicine as a potential growth area in his efforts to create a “New Virginia Economy.”
The new Inova campus is located across the street from Inova Fairfax Hospital. The 833-bed hospital had net patient revenue of $1.23 billion in 2014, according to the nonprofit organization Virginia Health Information (VHI).
Inova Fairfax is third on a list ranking the commonwealth’s top hospitals in terms of 2014 net patient revenue. The top hospital on the list is VCU Health System in Richmond, which had revenue of $1.36 billion, and second was University of Virginia Medical Center with $1.24 billion. Three Inova hospitals are among the 25 hospitals on the list.
Beyond these high-revenue facilities, however, many small, rural hospitals are facing financial problems, according to the Virginia Hospital & Healthcare Association. The group cites VHI data showing that 25 percent of Virginia’s acute-care hospitals and nearly 42 percent of its rural hospitals operated at a loss in 2014. One rural hospital, Lee Regional Medical Center in Southwest Virginia, closed in 2013.
An increasing number of Virginia’s nonprofit rural hospitals have joined large health systems in recent years. South Hill-based Community Memorial Healthcenter, for example, became part of VCU Health System in 2014. It has been renamed VCU Community Memorial Hospital.
Healthcare charts
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Virginia Business: What were some of the major economic issues that you were dealing with in 1986?
VB: I wondered if you had any personal memories of what the Virginia economy looked like back in ’86. You were a bank chairman at that time. You probably had a pretty good vantage point to see what the economy looked like back then.