Local bank reports new investment
BY COREY DAVIS
Monday, June 4, 2018
While some banks in North Carolina have struggled to survive, First Carolina Financial Services has continued to thrive since becoming a state-chartered community bank in 2012 in Rocky Mount.
First Carolina Bank recently announced an $11.64 million private placement capital raise. The bank completed a private placement of 776,250 shares of its common stock to accredited investors. The shares were sold at a $15 per share offering price, which resulted in gross proceeds to the company of $11,643,750 before deducting expenses of the offering, bank officials said.
Ron Day, president and CEO of First Carolina Bank, said the capital raise will be used to enhance the bank’s capital ratios, which will support the growth of the franchise and its general corporate purposes.
“We are very pleased to announce the completion of this private placement in which we were able to successfully raise our maximum targeted offering amount,” Day said. “We have experienced remarkable organic growth in our franchise while maintaining a position as one of the safest banks overall in the country.
“This additional capital will allow us to continue to take advantage of the strong customer demand for our business model.”
Day said 85 shareholders contributed to the $11.64 million capital raise, which consisted of 50 existing shareholders who bought more stock and 35 new shareholders. He said First Carolina’s opening last year of a full-service branch in Raleigh and a loan production office in Wilmington that has the potential to be a full-service branch were instrumental to the capital raise.
“The investment community came in pretty strong,” he said. “The support we have gotten from the board of directors, existing shareholders as well as new investors has been outstanding. There was a real balance of people who had invested with us before and like what they were seeing so much that they invested more at a higher cost — and then we had a lot of people since we moved into the new markets in Raleigh and Wilmington who recognized what we do as very good, and they want to be part of that as well.”
Day said this was First Carolina Bank’s fifth private placement stock since the bank started operations six years ago. Day said the bank has moved up to third in deposit market share in Rocky Mount after being eighth when it started in 2012.
“We have a goal to become No. 1 in deposit market share in Rocky Mount,” Day said. “We intend to catch PNC and Southern Bank that are ahead of us right now, and we believe this capital will allow us to do that.”
Day said he believes the growth of First Carolina Bank reflects the strength of the business acumen that exists in the Rocky Mount area. He also credited locally-owned bank Providence Bank for doing well in the community banking industry. Providence last year completed a merger acquisition with Cornerstone Bank in Wilson, which created a community banking company with $400 million in assets.
“There is a rich banking history here, and it’s working,” Day said. “I think we’re in a bit of a golden age for community banks, if you know how to manage the regulatory environment and you know how to create a strategy that people want to come in for.”
Day said there were 100 state chartered banks headquartered in North Carolina prior to the last recession but less than 40 now.
“I can count on hand the number of banks that are raising capital like we are — and having the growth trajectory like we are and funded by private investors (rather) than opposed to institutions, we are a very unique animal,” he said. “I see us in a great spot and growing exponentially from here.”