Agency Pinched by Separate Losses : Advertising: Salvati Montgomery bids goodby to a vice president, who is leaving to teach. It also loses better part of a $6-million account.

Ad agency Salvati Montgomery Sakoda is losing both a vice president and a large chunk of business.

Greg Smith is leaving his job at the Costa Mesa-based agency to work as a business consultant and college teacher.

Separately, one of the agency’s largest clients, Valley National Bank Corp. in Arizona, will move most of its business to another agency after the first quarter, said Dan Pittman, a vice president with Salvati. Banc One Corp. of Columbus, Ohio, bought Valley National in April and uses an agency on the East Coast.

Valley National represents $6 million of the agency’s $27 million in billings, Pittman said. The bank, he added, will continue to use Salvati for its Spanish-language advertising.

Smith, who is president of the Orange County Ad Club, said his leaving Salvati is “a mutually happy decision” and that business has been slow there.

He closed his own agency, Greg Smith & Partners, just over a year ago because of economic hardship and brought many of his staff and accounts to Salvati. At its height in 1990, Santa Ana-based Greg Smith & Partners had $17 million in billings and 40 employees. Some of Smith’s former employees are staying with Salvati, which employs about 45 people.

Smith said he will be teaching this spring in Cal State Long Beach’s journalism department, and he may begin a seminar/education business for free-lance professionals and small agencies.

“It used to be that large agencies held most of the business,” he said. “Now, free-lancers and smaller businesses are doing well. But they don’t know some of the things the big agencies know.”

The recession has seen the dissolution of some of Orange County’s large and established agencies, such as R.L. Couch & Co. and Cochrane Chase, Livingston. Others are hanging on but diminished: Wakeman & deForrest is operating under bankruptcy court protection and Galusha & Associates is down to a handful of employees, from a high of 30 before the recession began.