New players enter Upstate banking market

By Dick Hughes  

APRIL 19, 2012 11:13 a.m. (0)

The banking landscape has changed with 10 new players entering the Upstate market in two years. More changes are likely still to come.

The new names dotting the streetscapes include: TD Bank, CertusBank, Wells Fargo, Capital Bank, Bank of North Carolina, Park Sterling, PNC and Fifth Third.

Soon to come is Carolina Premier, which is buying Palmetto Bank’s branches in Rock Hill and Blacksburg. And while Palmetto Bank’s name did not change, its core ownership did.

South Carolina Bank and Trust, which has been in the Upstate since it opened offices in Greenville in 2002 and Spartanburg in 2010, became a much bigger presence with acquisition of Peoples Bancorporation of Easley, giving it its first presence in Anderson, Pickens and Oconee counties.

The new entrants are poised to add to their positions in the richest banking market in the state – but one where some smaller banks are left with a tenuous hold on their independence from aftershocks of the credit collapse.

One of the new players is Park Sterling, which, like many of the new bankers in the Upstate, comes out of North Carolina’s fertile banking center that is home to Bank of America and was to Wachovia, traditionally the dominant bank in South Carolina, until it was acquired in a fire sale by Wells Fargo.

A start-up in late 2006 with a single bank but grand ambition, Park Sterling entered South Carolina with commercial offices in Greenville and Charleston last June, then nearly doubled its size to more than $1 billion in assets in November with acquisition of Community Capital Corp. of Greenwood.

Those moves are just a beginning, said E. Dixon Harrell, Park Sterling’s Upstate president.

Park Sterling is looking to build a branch somewhere within the Greenville city limits to add to its commercial office and the 17 branches it acquired from Community Capital, including one on Woodruff Road in Greenville and one in Greer, Harrell said.

“We are trying to execute and grow with what we’ve got, but at the same time our bank is continuing to look for another partner, another Community Capital that might be out there, that may be a little bruised but not failing, and may want to be part of something that is a growing opportunity.”

He said Park Sterling’s acquisition targets are banks with assets from $250 million to $1.2 billion.

“There are a number out there. We just have to decide is that something we want, and the other folks have to decide if they want to partner with someone. You are really selling the bank when you do that.”

Park Sterling netted $143 million in a stock sale in August 2010, and has said it “likely will seek additional equity capital or issue indebtedness at some point to fund its growth strategy.”

The company says it intends to become a regional bank with assets of “between $8 and $10 billion over the next several years.”

So, too, does CertusBank plan to grow to more than $5 billion in assets. Certus acquired CommunitySouth Bank of Easley and two Georgia banks in FDIC-assisted takeovers. It has moved its headquarters to Greenville and plans additional branches in Greenville and elsewhere in the Upstate.

TD, which bought badly wounded Carolina First, plans to move several hundred employees to run back-office operations at the $90 million I-85 campus built but minimally used by Carolina First – making Greenville a regional hub for the North American operations of the Canadian bank.

The Bank of North Carolina, which made its first acquisition in South Carolina when it picked up failed Beach First National Bank of Myrtle Beach, bought Regent Bank of Greenville in September for $9.7 million, describing it “as a low-risk entrance to the extremely attractive growth market of Greenville.”

BNC said the market disruption presents “additional acquisition opportunities in key markets in the Carolinas” and described the Greenville office as a regional headquarters in the Upstate.

PNC has officially taken over the branches it bought from Royal Bank of Canada, and Fifth Third, the $115-billion bank based in Cincinnati, has occupied the second floor of the new CVS in downtown Greenville for a commercial office. Asked about future plans for Greenville, the bank said it could not comment because of a blackout ahead of its release of quarterly earnings.

One of the more intriguing newcomers is Carolina Premier, a 2007 startup in Charlotte, which is getting a small foothold in South Carolina through purchase of Palmetto Bank’s branches in Rock Hill in York County outside Charlotte and Blacksburg in Cherokee.

Carolina Premier also sees itself growing in the Carolinas, Virginia and Washington D.C., but on a much smaller scale to perhaps around $1 billion in four years by acquiring small-town banks. It envisions putting banking centers in hardware or drug stores if no banks exist in a town.

“South Carolina is very much a part of what we hope to do,” said John Kreighbaum, president and chief executive officer.

When Rock Hill’s lease expires, he said, the bank will be moved to another location to create a beta site for a 24-hour banking center for a metropolitan market.

Blacksburg, on the other hand, “presents an interesting gateway” into the Upstate and an opportunity to test Kreighbaum’s concept of returning rural, small-town banking to the way it used to be.

“Big bank policies and procedures just don’t work out there, and that is what is different about us. We will adapt our policies. We will adapt our underwriting. We will adapt how we interact with customers based on that old-fashioned type of approach.”

For example, he said, Blacksburg will have a local board of directors with authority to approve loans, modify policies, monitor bank performance and have a say in strategic plans and marketing “to become more of what boards used to be in these small towns,” he said.

While the public-visibility side of Carolina Premier is designed to feel like banking of a bygone era, its technology is cutting edge. It has no back office.

“Nothing is here,” Kreighbaum explained. “We’re in the cloud. We manage our vendors, and regulators make sure that we have a good vendor-management program so that if a vendor has problems it doesn’t hurt our bank. Our vendor base is in 18 states. It is all integrated electronically. We probably are one of the few banks in the country that has done this.”

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