New community bank scheduled to open by mid-May

Worthington to acquire control of Franklin Security

Huntsville could be the home for another new community bank by mid-May.

Huntsville-based Worthington Financial Holdings Inc. has filed an application with the Department of Treasury's Office of Thrift Supervision to acquire control of Franklin Security Bank, a federally chartered savings bank based in Virginia Beach, Va.

If the application is approved and the acquisition closes on May 15 as planned, the headquarters office will be moved to Huntsville and the name of the bank changed to Worthington Federal Bank.

"They're rich in deposits, we're rich in loans," said William L. "Will" Worthington, chairman and chief executive officer of Worthington Financial Holdings Inc. "It's a great marriage."

Worthington founded Worthington Mortgage Group Inc., a locally owned and operated mortgage bank, in 1997. Since then, it has closed more than $1 billion in single-family mortgage loans, construction loans and owner-occupied commercial loans.

"We will integrate the transactional operations of the mortgage group into a relationship environment of the planned community bank," said Worthington.

Worthington Federal Bank will offer construction lending, commercial and industrial loans, home equity loans, savings and time deposits and consumer loans, including credit cards.

"Because of our radio and media campaigns, we know what local residents want and need," Worthington said, "and we develop products and services here that are demographically and geographically accommodating to local people."

Worthington said the bank has "a very experienced management team that is used to running a financial service business."

Its temporary office will be at the existing Worthington Mortgage office at 4040 Balmoral Drive in Huntsville.

"We have a contract on the old Shoney's property" on South Memorial Parkway, said Worthington. "We're strongly considering that for a headquarters office."

Worthington and Richard Hamm, president and chief lending officer for Worthington Federal Bank, said that acquiring the federal savings charter instead of starting a new bank from scratch is the more cost-efficient way to launch a new community bank since the infrastructure is already in place.

"We'll be a three-state franchise on day 1," said Worthington, and be capable of taking deposits and making loans from the first day.

Franklin Security Bank also has a branch in Elizabeth City, N.C.

Worthington Mortgage, which also will be acquired by Worthington Financial Holdings Inc., has loan production offices in Gulf Shores and Brentwood, Tenn.

"We have the existing mortgage group that will be a large part of our operation," said Hamm. "That fits the mission of a federal savings bank."

Neither Worthington nor Hamm believe the banking market is saturated here.

Compared to other markets the size of Huntsville, this market has been underserved in the number of smaller, community banks, Hamm said.

"This market deserves more community banks," he said. "We have an unprecedented opportunity here - with BRAC and all the industrial recruitment." In all, more than 4,500 federal jobs will be moved to Redstone Arsenal as part of the 2005 Base Realignment and Closure Commission recommendations.

Before Worthington founded Worthington Mortgage, he was president and CEO of Madison Equity Mortgage Co. from 1990 to 1997. He's a former regional vice president and national sales director for PFS, a subsidiary of Citigroup. Hamm has more than 21 years of banking experience and was executive vice president and regional credit officer for Colonial Bank. He is the president of Advantage Consulting and Training, which provides training and consulting internationally to banks and other businesses.

Worthington said the breadth of experience of the bank's directors will provide "tremendous insight and leadership."

Directors besides Worthington and Hamm are R. Steven Denney, chief executive officer of Atlantic Technologies in Huntsville for 16 years and co-founder and managing partner for D and S Investments, a real-estate development company active in The Ledges in Huntsville; Keith S. Jones, a founding partner in the law firm of Wolfe, Jones, Boswell, Wolfe, Hancock & Daniel LLC in Huntsville; Philip J. Martin, founder and chief executive officer of Gulf Capital Holdings in Orange Beach; Michael Friday, founder of Woodland Homes; David Karabinos, president of Harvest Business Advisors; and Shaul Zislin of Hollywood, Fla., owner and chief operating office of Surf Style Inc., a global manufacturing and distribution company, and founder of Venture Group Development Co.