SCB&T acquires Georgia bank

By Dick Hughes  

FEBRUARY 1, 2010 10:21 a.m. (0)

With other banks still reeling from real estate losses, South Carolina Bank & Trust remained profitable throughout the meltdown and is using that strength to expand in the Carolinas and now Georgia.

In its latest expansionary move, SCBT Financial, the holding company for SCB&T, took over one of the oldest banks in Georgia, Community Bank & Trust of Cornelia, which was closed by the FDIC and the Georgia Department of Banking last Friday.

The acquisition gives SCBT of Orangeburg a base of 36 locations in northeastern Georgia and “enhances our presence on the I-85 corridor from Charlotte to Atlanta,” said Robert R. Hill Jr., president and chief operating officer of SCBT Financial Corp, in a statement.

Hill said Community Bank & Trust would operate as a division of SCBT Financial.

SCB&T recently opened an investment office in Spartanburg, where it had not had a presence, and said it plans to expand it into full-service banking as part of its strategy to become a bigger player in Upstate banking.  SCB&T has three branches in Greenville and one in Simpsonville.

The company also recently expanded its Charlotte subsidiary, North Carolina Bank & Trust, to play a bigger role in commercial banking.  As it did in Spartanburg, SCB&T hired local bankers from Wachovia to staff new positions.

Hill told an audience in Charlotte last week that SCBT Financial intends to expand NCB&T into markets in Asheville, Greensboro, Raleigh and Wilmington, according to the Charlotte Business Journal.

SCBT entered North Carolina with purchase of the Scottish Bank in Charlotte in 2007.

The move into Georgia was prompted by the failure of Community Bank and Trust.  In the transaction with the FDIC, SCB&T acquired $1.1 billion in deposits of the Georgia bank and assumed responsibility of $827.7 million loans under a “loss-share” agreement with the FDIC.

Typically, FDIC reimburses the acquiring bank for 80 percent of losses on the loan portfolio up to a threshold based on the FDIC’s estimate of projected losses.  SCB&T said the loss-share agreement covers “substantially all of the acquired loans and foreclosed real estate” of Community Bank & Trust.

The agency said SCB&T did not pay a premium to acquire the deposits and that the take-over by SCB&T was the “least costly resolution” for the FDIC compared to all alternatives.

FDIC estimated the cost to its insurance fund will be $345.5 million.  The insurance pool is funded by premiums paid by banks and not by taxpayers.

Thirteen banks failed in January. In 2009, 140 collapsed compared to 25 in 2008 and three in 2007.

SCBT Financial Corp. reported net income of $1.5 million for the fourth quarter of 2009 and $8.9 million for the year.  It had net income of $16 million in 2008.

SCBT received $64.8 million in TARP funds from the U.S. Treasury in 2008 and was among the first banks in the nation to repay the government, along with $1.4 million to redeem warrants that gave Treasury the right to buy common shares..

Excluding the assets of Community Bank & Trust, SCBT had assets of $2.8 billion and is the third largest South Carolina-based financial company behind the South Financial Group of Greenville and First Citizens Bancorporation of Columbia.  In September, First Citizens acquired the assets of Georgian Bank, the second largest Atlanta-based bank, which was shut down by the FDIC.

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