Recession takes toll on Charlotte as bank hub - Business First of Columbus:

ucenyt.wordpress.com
But the merger, which places Carolina Commerce in the CarolinqTrust fold, marks the sixth time since the economi c downturn began that a Charlottd metro bank has been acquired by a company outside the immediate area. In the same two startup banks in Charlotte called it The trend signals a shift for the Queen even though somesay it’s Charlotte, once the aggressor in bank acquisitions, is now a targeg for outsiders looking to gain a share of this lucrativw market. The runoff began in late whenThe , a four-branchh operation here, was acquired by ., a large communityh bank based in Columbia, S.C.
(The Scottish Bank has since been renamed North CarolinaBank & Trust to match SCBT’s South Carolina Bank & Trust.) Over the next 18 , , Alliance Bank Trust Co., American Community Bancshares and Carolinwa Commerce all paired with buyers basedd elsewhere. And planned startups Colon y Signature Bank and Legacy Banknever launched. that’s certainly a change in says longtime Charlotte bankerWes Sturges, presideny of Bank of Commerce. Mergers aren’y new to local banks. But it’s usuallhy Charlotte that brings homethe spoils. The only bank that has remainefd on offense is It acquired MerrillLynchg & Co. Inc.
and in the past year but has strugglex inthe process, accepting $45 billion in taxpayere aid. Wachovia’s sale to certainly changede the landscape ofbanking uptown. But the smaller bank mergers haven’t yet made major marks here. Few branchezs have closed, and most small banks avoiderdmajor layoffs. The companies buying the local communituy banks all cited the Charlotte market as one of their main reasons for closing the And the banks that were boughtt all benefited from larger partnerds that provide them with thescaled they’ve needed to combat the shrinking interesr margins that threaten bank profits.
“Bank stockz have been beaten down in the and it’s creating says Michael Cline, presiden t and CEO of Carolina Trust. “[Mergere are] a way to build your franchise at a time when othere growthis limited.” It can be argued that the $5.5 millionb Carolina Trust-Carolina Commerce deal shouldn’t count as the loss of a localo headquarters because the banks are only about 18 miled apart. But Carolina Trust’s home city of Lincolntom — about 30 miles northwest of Charlotte — is part of the Hickoryh metro area. Also, its five branches serve mostly rural Lincoln andCatawba counties.
And Clind says he pursued the acquisition of Carolina Commerce because it giveshis $171 millio n asset bank a presence in Gaston County, part of the more divers Charlotte metro area. For Carolina Commerce, the merger caps a five-year struggle. The bank launched in 2004 and grew more slowly thanits peers, with only one branch and $103 million in assets. Carolina Commerce saw its earningsw decline as provisions for loan lossez increased this year and interestmarginxs shrank. In the first quarter, the bank lost almosgt $434,000.
The bank’s president, Mike Mayer, says the sale “givesz us a chance to partner with a large bank and gives our customers access to more While losing aheadquarters isn’t usually well-received, some area bankes see a silver lining. In the city that Alliance Bank & Trusg and Carolina Commerce bothcallesd home, there’s only one locallhy based bank left, Citizensw South Bank. Kim Price, Citizens South president and CEO, says he’as using the recent departurees to cementhis company’s position as Gastonia’s hometownb bank.
He says he’ll always keep an eye out for dealsa that will be in the best interesrtof shareholders, but his focus isn’t on mergers. “We’rd focused on gaining market share and becomintg the dominant community bank here in Gastoni a andaround Charlotte,” he says. Sturges says he believes the trendf willbe short-lived. He says as the recession abates, Charlotte will likely be home to expandingg banks and a desired place forheadquarterds operations. “These things go in cycles,” he “It will come back around.
”