Macon-based bank creates stability during rocky economy

Organizers of Macon-based State Bank and Trust Co. have traveled on a long journey in a short period of time.

On July 24, 2009, State Bank took over the six banking offices of failed Macon-based Security Bank that were shut down the same day by state and federal regulators.

Four months later, State Bank acquired The Buckhead Community Bank with six branches in the Atlanta area.

“It’s been the most interesting year in banking that I’ve ever had,” said State Bank Chairman and CEO Joe Evans, who has worked in banking nearly 40 years. Evans headed the recapitalization effort and brought investors together to finance the bank acquisitions.

The newly created bank went “from where we didn’t have one on July 23 (2009), to where today we are the fourth largest bank in the state,” said Evans, 61. “And by most people’s matrix have the soundest balance sheet and best performance matrix of anybody our size in Georgia.”

State Bank officials combined all the bank charters into one and created the headquarters for all the branches and consolidated various back-office processing in Macon. They had to combine multiple operating systems and “try to get people to the point of stability as soon as possible,” Evans said.

“I couldn’t be happier with how far we’ve come in that journey of going from assimilation, change and integration to stabilization and consistency,” he said.

Dan Speight, vice chairman, chief financial officer and chief operating officer, who was part of the initial team, said the transition happened quickly.

“We wanted to get to the solid foundation — not what the past had been — but what we are and where we are going as quickly as we could,” Speight said.

State Bank officials said they wanted to set up the new bank on a firm foundation.

Security Bank had a large number of deposits that were out of territory, which are called “brokered” deposits, Speight said.

That “old deposit structure was brokered for wholesale money bought on the open market to fill a space on the balance sheet,” Evans said.

Now, State Bank boasts that about 50 percent of its deposits are what are considered core deposits in local checking, savings and money market accounts.

“We want (certificate of deposits) with people who bank with us,” Evans said. “We are not interested in CDs that come from brokerage firms. The CDs that come from New York City are not of any real value to us.”

The bank set up a special assets division to handle the bad loans it inherited with the bank acquisitions. A Marietta-based auction company held an auction recently in Atlanta and one in Macon Sept. 1 to sell more than 265 commercial and residential properties that didn’t sell after going through a foreclosure process. The auctions netted $2.1 million.

Bank increased local presence

The bank now has 455 employees throughout Middle Georgia and Atlanta. And while some former Security Bank employees were let go with the acquisition and consolidation, there is a net gain of about 100 more employees in Macon because its processing office was centralized here.

“Also we have brought in about 10 senior level people who have moved into the Macon area, which means higher salaries and people buying higher-priced homes,” Speight said.

The increase of employees in the Macon area was somewhat of a surprise to Evans.

“The employment impact of what we accomplished last summer has had a much greater impact on local employment than I would have guessed,” he said. “We didn’t foresee the additional banks that we would acquire (and the impact of consolidated operations here).”

Even with the Buckhead bank acquisition in Atlanta, as well as former Security Bank offices that were located in Atlanta, Evans plans to keep the headquarters in Macon.

“There is no comparison in my mind to the quality and cost effectiveness of just processing bank work here as compared to Atlanta,” he said. “We think our ability to get the work done here would be a long-term competitive advantage of ours.”

Joe Brannen, president and CEO of the Georgia Bankers Association, said State Bank seems to have what it takes to succeed.

“State Bank and Trust is a strongly capitalized bank, and its executive team has years of experience and insight about what works in Georgia in terms of building new business,” Brannen stated in an e-mail. “That local market experience and knowledge is also beneficial as they work through the distressed portions of the loan portfolios they’ve acquired. FDIC obviously has confidence in the management team as the agency has continued to work with them to resolve problem banks.”

Recent developments

About three months ago, State Bank bought an 82,000-square-foot office building at 4885 Riverside Drive and will be moving its back-office processing operations into that building from its current 35,000-square-foot space. While State Bank won’t initially occupy the entire building, and tenants occupy part of the space, it will allow room for the bank’s future growth, Evans said.

State Bank also created a mortgage firm with a team of mortgage originators who had been with the bank’s organizers in the past.

During the current economy, there is a lot of debt restructuring and refinancing going on, Evans said, but the bank has made some loans to school boards and local governments for developments.

Pretty soon, the public may be able to buy shares of State Bank stock.

On Friday, State Bank announced it had completed a reorganization creating a subsidiary called State Bank Financial Corp. that owns 100 percent of State Bank and Trust Co., according to a news release.

The new holding company, headquartered in Atlanta, was approved by the Board of Governors of the Federal Reserve System and the Georgia Department of Banking and Finance in July.

“It has always been our strategy to create a bank holding company for State Bank,” Evans stated in the news release. “With a holding company, we gain a great deal of flexibility in how we access capital and structure acquisitions in the future as we grow the bank.”

Evans said he and his officers feel fortunate to be in the position they are in considering so many banks are struggling.

“We just really have to be thankful because there are a lot of good bankers that are just as good bankers as we are who are in very different circumstances,” he said. “The sale of our last bank in December 2006, and a requirement by the purchaser that we agree to a two-year non-compete period, put us in a situation where we were sitting on the sidelines when all of these bad things started to unravel.

“In a way, we felt like the guy who had a reservation to get on the Titanic but got bumped.”

Looking ahead, Evans said he believes the current economic downturn “is going to be protracted” and it will take a number of years “to get significant economic momentum.”

“It will continue to be a difficult time for the banking industry, and I believe that we will unfortunately have the opportunity to bid on additional FDIC failures,” Evans stated. “Hopefully, the predominance of community bank failures will be behind us by the end of 2011. ... We believe as we come through this downturn that we should emerge from this as one of the most substantial smaller-than-regional banks in Georgia, and we look forward to both the opportunity and responsibilities that come with that.”

To contact writer Linda S. Morris, call 744-4223.

This story was originally published September 13, 2010 at 12:00 AM.