Two of Charlotte’s biggest community banks officially have new out-of-state owners.
Memphis, Tenn.-based First Horizon National on Friday announced that it had completed its acquisition of Capital Bank Financial Corp., while Columbia, S.C.-based South State Corp. said it had finished its purchase of Park Sterling Corp.
The deals were first announced in April and leave Charlotte with a shrinking list of banks based in a city built on the financial services industry. After Carolina Premier Bank completes its planned sale to Dunn-based Select Bancorp, only Bank of America and NewDominion Bank will have their headquarters in the city.
The dwindling number of Charlotte-based banks has been a key factor in the city’s loss of its title as the nation’s second-largest banking center to San Francisco. As the Observer first reported in May, growth in San Francisco’s financial sector enabled it to push Charlotte to No. 3, based on value of loans and other assets held by banks headquartered in the respective cities. In 2007, Charlotte was home base to eight banks, including Wachovia, which was sold to Wells Fargo a year later during the financial crisis.
In the aftermath of the crisis, the leaders of Capital Bank and Park Sterling – with roots at Bank of America and Wachovia – set out to buy up smaller banks, forged numerous mergers and ultimately sold to bigger buyers themselves.
With its Capital purchase, First Horizon said it’s now the fourth-biggest bank in the Southeast with $40 billion in assets and 350 branches in the Carolinas, Tennessee, Florida, Mississippi, Georgia, Texas and Virginia. The bank will continue to use its First Tennessee Bank brand in that state but retain the Capital Bank name elsewhere.
Capital CEO Gene Taylor and director Peter Foss have joined the First Horizon board of directors, while Taylor also becomes the bank’s vice chairman.
Meanwhile, Capital chief financial officer Chris Marshall told the Observer he will be leaving the bank in coming weeks and plans to explore new opportunities. In 2009, he and Taylor founded a venture called North American Financial Holdings that raised money to buy ailing banks, leading to the formation of today’s Capital Bank Financial.
“I’m pretty excited about the future of the company,” Marshall said of First Horizon. “They are perfectly positioned to be the dominant bank in the Southeast.”
North American’s goal was to buy “fixer-uppers” that needed their performance improved, Marshall said. Along the way, the executives encountered a challenging regulatory and interest rate environment that made operating community banks more costly, but they stuck to their business plan, he said.
“It worked and our shareholders did well,” Marshall said.
The Park Sterling acquisition gives South Street $14 billion in assets and 170 locations in the Carolinas, Georgia and Virginia. South State expects to replace Park Sterling signs in the second quarter of 2018.
Park Sterling CEO Jim Cherry and director Jean Davis have joined the South Street board.