First South Bank purchase finalized
BY COREY DAVIS
Saturday, January 20, 2018
A Rocky Mount bank was recently part of a purchase by a South Carolina financial institution that bank officials say has created the second largest community bank in the Carolinas with total combined assets of more than $3 billion.
Carolina Financial Corp., the holding company of CresCom Bank, acquired First South Bank on Nov. 1. The merger deal was reached in June 2017 between Carolina Financial Corp. and First South Bancorp Inc., the parent company of First South Bank.
However, the agreement couldn’t become legal until November. First South Bank has two branches on Sunset Avenue and Benvenue Road in Rocky Mount. First South Bank, which is headquartered in Greenville, purchased the Rocky Mount branches in 1996.
First South Bank operates 28 banking locations across both Eastern North Carolina and the Triangle area. In March, First South Bank reported assets of $1 billion, while Carolina Financial Corp. reported $2.3 billion in total assets in September.
First South Bank will continue to operate under its name until the operation conversion to CresCom Bank takes place on March 11, bank officials said.
Bruce Elder, president and CEO of First South Bank, said the bank is excited to be merging with a high-performing company like CresCom Bank. According to reports, Carolina Financial Corp. was ranked No. 1 on American Banker’s list of “Top 200 Community Banks in 2015.
Bank officials said the merger will bring more than 100,000 checking accounts from customers at First South and CresCom. Elder said a couple additions coming from CresCom Bank include checking accounts aimed at serving senior citizens and veterans.
“First South shareholders and customers will be rewarded as the combination of these banks will provide superior financial performance along with an exceptional customer experience,” Elder said. “We will leverage the new resources and products available to us through Crescom Bank to attract new customers and expand our existing relationships.”
With the acquisition of First South Bank, bank officials said, CresCom Bank will nearly double its branch network from 34 branches to 62 branches. Along with Rocky Mount, CresCom Bank will operate 28 new banks throughout Eastern North Carolina, including Raleigh-Durham, Fayetteville, Greenville and expand in the bank’s existing territory in Wilmington and along the North Carolina coastline.
David Morrow, president and CEO of CresCom Bank, said First South Bank is the type of community bank that has a similar philosophy to CresCom Bank.
“When we started to look at banks that we were looking to acquire, we put First South on the list,” Morrow said. “They’re a well-run community bank with quality assets, good earnings and a good management team, whose culture, goals and objectives very much closely aligned with us.”
Elder said a very small number of First South Bank’s employees were impacted by the merger. Morrow said 90 percent of First South Bank’s employees were offered jobs. The consolidation and mergers of banks has been a continuing trend for the past several years.
Elder said he remembers that about seven or eight years ago, there were more than 100 banks headquarted in North Carolina, and now the number is around 50. He added the challenges for banks is the cost of regulations ever since the recession and the implementation of the Dodd-Frank Act in 2010.
“The regulatory burden has become significant,” Elder said. “The cost of compliance with regulations is as significant for a $300- to $400-million dollar bank as it can be for an $8 billion bank, so the size in scale does have its advantages. With us coming together, we’re creating a premier community bank in the Carolinas.”