Carolina Premier Bank to buy 2 branches of SC bank

Greenville, S.C.-based Palmetto Bancshares Inc. on Jan. 30 said it is selling two branches of unit Palmetto Bank to Charlotte, N.C.-based Carolina Premier Bank.

Carolina Premier will purchase real estate, equipment and substantially all the loans and certain other assets, and assume the deposits and lease obligations, associated with Palmetto Bank's Rock Hill, S.C., and Blacksburg, S.C., branches. The terms of the transaction include a deposit premium to be paid to Palmetto Bancshares at closing, which is expected to occur during the second quarter, pending regulatory approval. The banks entered into the agreement Jan. 27, according to a Form 8-K filed by Palmetto Bancshares.

Palmetto Bank announced in December 2011 that it was marketing these branches for sale. The bank also plans to consolidate its North Harper branch into the West Main branch in Laurens, S.C., and its South Main branch into the Montague branch in Greenwood, S.C.

Palmetto President and CEO Samuel Erwin told SNL on Jan. 30 that the company's short-term goal is to become as efficient as possible. "With this very difficult environment that we find ourselves in … we have a tremendous focus on expenses and efficiency," he told SNL.

Erwin pointed to the Federal Reserve's recent announcement that it expects to leave its federal funds rate near zero until late 2014 as evidence of the challenges facing banks. "The reason that we embarked upon the expense initiative that resulted in these branch closures and sales had very much to do with an environment where our margins are going to be squeezed," he said. "Rates are about as low as we can push them on the liability side, and growth is limited."

In the long term, Erwin said Palmetto Bancshares plans to pursue organic growth and, eventually, acquisitions in its footprint. "We would like to at some point in the future take part in what we believe will be some pretty serious consolidation in our industry from an acquisition standpoint," he said.

John Kreighbaum, president and CEO of Carolina Premier Bank and its Washington, D.C.-based holding company, Premara Financial Inc., has been outspoken about the company's goal of growing in the attractive Washington, D.C., and Northern Virginia market. He told SNL during an interview in December 2011 that Carolina Premier is looking for relatively healthy banks that "may have some scratches and dents." Ideally, he said Carolina Premier would combine with other banks to build a holding company with roughly $1.25 billion in assets.

Kreighbaum expressed an interest in doing some sort of deal with Chantilly, Va.-based Alliance Bankshares Corp., which is considering strategic alternatives.

Some in the industry have suggested that private equity groups could be interested in using Alliance as a platform for growth in the Northern Virginia market.

CapGen Financial Group is among the private equity players that have invested in banks in the Southeast during the past few years.

Funds affiliated with CapGen Financial Group own a stake in Palmetto Bancshares.
Raymond James & Associates Inc. served as financial adviser to Palmetto Bancshares.

 

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