Of Mice, and Men

Who is Scott C. Harvard

According to the FHLB Atlanta website Scott C. Harvard is the Chairman of the Board of Directors of the Federal Home Loan Bank of Atlanta - http://goo.gl/oiG8G.  The bank does not post Board member biographies on its site, so one has to visit SEC EDGAR to check the bank's SEC filings.  I selected the bank’s most recent 10-K, or Annual Report, filed with the SEC - http://goo.gl/QJjqR.

If you are on the SEC site, scroll down to "Table of Contents" and click through the 'Directors and Executive Officers Link".  In this section of their 10-k, the bank explains:

"Finance Agency regulations require that a member directorship be held only by an officer or director of a member institution that is located within the Bank’s district and that meets all minimum capital requirements established by its appropriate federal banking agency or appropriate state regulator and that is a member as of the record date. The regulations permit, but do not require, the board of directors to conduct an annual assessment of the skills and experience possessed by the members of its board of directors as a whole and to determine whether the capabilities of the board would be enhanced through the addition of individuals with particular skills and experience. The Bank may identify those qualifications and so inform the members as part of its election notification process; however, the Bank may not exclude a nominee from the election ballot on the basis of those qualifications so identified. For the 2010 elections, the board of directors did not identify any particular qualifications as part of its election notification process.

Finance Agency regulations require that an independent directorship be held only by an individual who is a bona fide resident of the Bank’s district, who is not a director, officer, or employee of a member institution or of any recipient of advances from the Bank, and who is not an officer of any FHLBank. Finance Agency regulations further require that a public interest independent director have more than four years’ experience representing consumer or community interests in banking services, credit needs, housing or consumer financial protection. An independent director other than a public interest director must have either four years’ experience representing consumer or community interests in the foregoing areas or have experience in, or knowledge of, one or more of the following areas: auditing and accounting, derivatives, financial management, organizational management, project development, risk management practices, and the law.

The Bank has determined that all member directors meet the regulatory eligibility requirements [emphasis added] and, based on the specific experience, qualifications, attributes or skills described in the biographical paragraphs provided below, that each independent director is qualified to serve as an independent director for the Bank. "

Immediately below this verbiage, is a listing of the board members: Scott C. Harvard, 53, Term Ending - 12/31/12.  Director since - 2003

And following this table is a brief bio:

"Chairman of the board, Scott C. Harvard, has served as vice president of Virginia Savings Bank, F.S.B. since June 2009 [emphasis added].  Previously, he served as president and chief executive officer and as a director of Shore Bank from 1985 to June 2009. He served as president and chief executive officer of its parent, Shore Financial Corporation, from 1997 to 2008. Mr. Harvard served as a director and an executive vice president of Hampton Roads Bankshares from June 2008 to June 2009. Mr. Harvard has served as chairman of the board of the Bank since 2007. Mr. Harvard has expertise in community banking and corporate governance."

Further down, on page 169, the 10-K reads:

"The FHLBank Act provides that each FHLBank may pay its directors reasonable compensation for the time required of them, and their necessary expenses, in the performance of their duties, subject to approval by the Director. In accordance with the FHLBank Act, the Bank has adopted a policy governing the compensation and travel expense reimbursement provided to its directors. Under this policy, directors receive fees paid for attendance at each meeting of the board of directors, meeting of a committee of the board of directors, or certain official Bank-related events. These fees are subject to the annual caps established under the policy. Directors do not receive separate retainers.

Directors are reimbursed for reasonable Bank-related travel expenses associated with meeting attendance in accordance with Bank policy. Total expenses paid under that policy in 2010 were $73,011. In specified instances, the Bank may reimburse a director for the transportation and other ordinary travel expenses of the director’s guest.”

During 2010, Scott C. Harvard, the chairman of the board of directors, received fees of between $4,600 per meeting, for chairing a meeting of the board of directors, to $500 per meeting, for attending a telephonic meeting of a board committee, subject to an annual cap of $60,000.

The table following shows that Scott Harvard received $60,000 for his services to the bank, during 2010.

Now to the Heart of the Matter:

Scott Harvard was President and CEO of Shore Bank, from 1985 until June 2009.  Shore Bank was sold to Hampton Road Bankshares, the holding company for Bank of Hampton Road, in May 2008.  Hampton Roads paid $22/share of Shore Bank, with an alternative options + cash route as an alternative.  On June 10, 2008, Harvard was Hampton Roads increased its board membership by 3, to 13, to accommodate Harvard and 2 other directors of Shore.  Also on June 10, 2008, Harvard was appointed Executive Vice President of Hampton’s Shore Operations. On September 23, 2008, Hampton Roads acquired Gateway Financial Holdings, parent of Gateway Bank & Trust Co.  Pursuant to the merger agreement, Gateway Financial was required to raise between $20,000,000 and $35,000,000 by September 29, and become well capitalized.  Hampton Roads also agreed to “lend on its own behalf, or behalf of Hampton Roads bank and Shore Bank”, $31,000,000 to Gateway Financial.

[I can’t believe this got the SEC & regulatory nod for that]

In November 2008, Harvard was re-elected to the FHLB Atlanta board.  Harvard was also a Director and Officer at Hampton Roads.  On June 24, 2009, Harvard served his notice of intent, to resign from the Hampton board, and from his officer responsibilities.  On June 26, 2009, Steven Belote, formerly CFO at Shore Bank was appointed CEO of Shore Bank.  On July 14, 2009, Hampton Road appointed John Davies as its new CEO.  On August 3, 2009, Hampton Road announced a quarterly net loss of $52 million before tax claw-back provisions.  On August 24, 2009, Harvard resigned from the Hampton Road board.

That’s Enough about Hampton Road.  It is not relevant to rest of the narrative.

Harvard has a LinkedIn Profile page: http://goo.gl/BdHln.  Notice, that on his professional profile, Harvard lists 2 associations – (1) Harvard Resources, and (2) FHLB Atlanta.  I was unable to find a website for Harvard Resources.  Not an issue, it could be Harvard’s privately owned baby.  

Upon checking with the VA Secretary of State’s site - http://goo.gl/QHiwL, “Harvard Resources” is not registered with the state of VA in any form.  Not a problem, it is possible the LinkedIn listing is a gimmick.

Harvard is listed, on the FHLB Atlanta 10-K, as a Vice President of the Virginia Savings Bank, Front Royal, VA.  That is the basis for his qualification to run for election, and to stay on the board of directors.

Shore Bank, Onley VA, according to Google Maps is 250 miles from Front Royal.  Norfolk, VA, which is listed as Harvard’s LinkedIn location, is 212 miles from Front Royal.  The Virginia savings bank does not have an office in either Onley, or in Norfolk, VA.

No problem, Harvard could be a ‘remote’ employee.

The author has reached out directly to the executive offices of Virginia Savings Bank, Front Royal, VA.  In order to protect the innocent, a ‘live’ person/employee of this bank informed the author, that “as far as I know, Harvard is not an employee of the bank.”

Stunning!

To be fair, I have left voice mails for both the CEO, and the CFO (twice) of the bank.  No return calls yet.

This has been a very long post.  It needed to be.  I will remind readers of the Federal Housing Finance Agency’s regulations once more: “Finance Agency regulations require that a member directorship be held only by an officer or director of a member institution that is located within the Bank’s district and that meets all minimum capital requirements established by its appropriate federal banking agency or appropriate state regulator and that is a member as of the record date.”

Readers can form their own opinion as to what is going on.  I merely report the facts.

Of course, Harvard is free to join the group, and to post a response.  Nothing will be censored.

Good Night, and Good Luck