Bank of North Carolina plans big expansion
Someone recently suggested to Rick Callicutt that he should write a book about the growth of Bank of North Carolina during the last few years.
Callicutt, president and CEO of the High Point-based bank founded in Thomasville, responded that the story can’t be written yet because BNC hasn’t finished growing.
As if to illustrate his point, BNC recently announced deals to acquire two banks in other parts of the state, which will bring to 10 the number of institutions it’s acquired in the last seven years.
BNC in December reached merger agreements with Home Savings Bank in Albemarle and Harrington Bank in Chapel Hill. The deals are expected to close in the second quarter of this year, pending the approval of banking regulators and the shareholders of both companies.
Once complete, BNC’s assets will increase from about $3.2 billion to $3.7 billion, and its branch network will expand from 32 to 39.
“To take the bank from where we started 22 years ago on Julian Avenue in Thomasville with $3 million in capital and go to the size we are now with the footprint we have has been remarkable,” Callicutt said. “Our expansion really began as a plan to diversify the asset base of the organization, to give us more opportunity to grow core deposits and mitigate risk in the loan portfolio. It’s very difficult when you’re landlocked in one particular market. Both these opportunities were really attractive to us because both banks have great core deposits.”
Coming out of the Great Recession, starting in 2010, BNC grew through acquisitions in Myrtle Beach, S.C., Asheville, Greenville, S.C., Durham, Charlotte and Charleston, S.C. The growth continued more recently, when it bought Asheboro-based Randolph Bank & Trust Co.
Under the latest deal, BNC will acquire two Home Savings Bank branches in Albemarle and one each in Oakboro and Locust. The deal will grow BNC’s presence in the Charlotte region to $865 million in loans and $725 million in deposits.
“We believe the merger will provide significant value to our shareholders, as (BNC is) one of the best-managed, most profitable and fastest-growing banks in the Southeast,” said Ron Swanner, chairman and CEO of Home Savings Bank, which is more than 100 years old.
BNC will acquire Harrington Bank’s three branches in Chapel Hill, which will give it about $550 million in assets in the Triangle.
“Our customers and the communities we serve will benefit from the broader range of products and services offered by Bank of North Carolina,” said Larry Loeser, president and CEO of Harrington Bank. “We are also pleased that our employees will be joining a larger company with the resources and reputation that Bank of North Carolina has worked hard to achieve.”
All employees from both institutions will be joining BNC, officials said. The deals will increase the bank’s total workforce to more than 700 employees.
Callicutt called the Harrington Bank deal “a critical addition to our goal of creating a billion-dollar footprint” in the Triangle. The bank already has branches in Raleigh and Durham.
The bank’s stock price steadily rose throughout 2013, starting off the year at just over $8 a share and more than doubling to its current level of over $17.
The bank’s profitability also is on the rise.
During the third quarter of 2013, its earnings increased to $5 million from $4.7 million in the second quarter, and from $1.4 million in the third quarter of 2012.
That year, the bank raised $72.5 million in capital to help fuel its growth.
“We’ve got lots of earnings power built into the organization. We’re generating enough capital internally to take us where we want to be,” Callicutt said. “Current capital levels and earnings power built into BNC will provide the necessary capital to support (the Home Savings and Harrington) acquisitions, as well as planned organic growth, now and into the foreseeable future.”