For months, Bob James has been wearing two pins on his lapel – one for his bank, and one for its buyer.
First Charter Corp., the Charlotte bank where James is president and CEO, was bought Friday in a $1.1 billion deal that was announced last year. Its buyer, Fifth Third Bancorp, is a much larger Cincinnati bank with a broad Midwest footprint.
A few days ago, James stopped wearing his First Charter pin and now just wears the one from his new employer. “I don't want to confuse people,” he said.
Monday, all First Charter branches will open as Fifth Thirds.
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James, 57, said he has no regrets about leaving behind one brand, just excitement about joining a bigger one. He'll head Fifth Third's Carolinas affiliate.
An N.C. native, Chapel Hill graduate and outgoing chairman of the N.C. Bankers Association, he talked to the Observer about what Fifth Third's arrival means for the Charlotte banking scene, his vast collection of red ties, and where the name of the “Fraction Bank” came from anyway.
Questions and answers have been edited for clarity and length.
Q. First Charter has been independent for a long time. (It was founded in 1888.) Why did you decide to sell?
We had reached a point where we were the fifth largest bank headquartered in North Carolina (behind Bank of America Corp., Wachovia Corp., BB&T Corp. and First Citizens BancShares), and we were at a crossroads: We either needed to invest a lot of capital in new technology, new products and services, (and) additional management talent to continue to grow our franchise, or we needed to find a partner who already had all of those things.
We were large enough that it was very difficult to continue to call ourselves a community bank. We needed to be moving to larger customers.
Q. You've said other banks were interested in buying First Charter. Why did you go with Fifth Third?
One thing that really attracted us to Fifth Third is that they are not in this market. So this is not a merger and a consolidation. … Fifth Third is not looking to come in and close branches, they're looking to use First Charter as a springboard to grow throughout the Southeast.
Also, they have a unique model of affiliates. When they come in and acquire an organization like First Charter, they put us on their technology platform and give us their products and services, and then they leave everything else in place. They're not calling the shots out of Cincinnati. We're calling the shots out of Charlotte.
Q. How do you keep customers on board when things are changing?
I think we've got several things working in our favor. First is that we are not closing any branches, and we are not displacing any of our sales employees. If their banker doesn't change, and their branch location doesn't close, the only other thing that might possibly cause a customer to leave is if they don't like the new products and services. But I can tell you, Fifth Third's products and services are better than First Charter's were.
Q. You've had to lay off a substantial portion of your workforce. (Of 1,100 positions, about than 250 were eliminated.) How do you keep employees on board when they know they're going to lose their jobs?
That's always the difficult thing about a merger. All of the employees at the company are very special to me and have given us great service.
They're professionals, and we ask them to do what they've always done, which is give us their best effort. We were lenient about giving people some time to look for other jobs. We had a job fair here about three weeks ago. And we negotiated a very generous severance package.
Those that are remaining are very excited because there will be increased career opportunities for them. If they're willing to move, they can go anywhere in the Fifth Third franchise.
Q. Are you still trying to sell this building? (First Charter's corporate headquarters are in Charlotte's University area.)
We put it on the market, but unfortunately, we have not been able to sell it. Fifth Third continues to want to sell this building, and our ultimate goal would be to lease some space in a tall building in uptown Charlotte and have our name on the building, and get the public visibility from that. This is a very nice facility, but it's basically hidden, and it's tremendously overbuilt for a company our size.
Q. How many red ties do you own? (First Charter's logo is red.)
Probably better than 50. I like red ties, and it has nothing to do with First Charter. I've been a red-tie fan long before I joined First Charter (in 1999). As a banker I wear a lot of dark suits, and red ties go with blue, gray or any other color.
Q. What do you think of the new bank name?
We get a lot of questions about it. It's not a name you would pick for your new bank, but if you understand the origin – back at the turn of the century there was a bank in Cincinnati on Fifth Street named Fifth National Bank, and there was one on Third Street named Third National Bank, and they merged and said, “OK, we'll be Fifth Third.”
(But) I don't understand why somebody would name their bank Fifth National to start with. Why wouldn't you want to be at least first or second?