Banking

North Carolina has a new bank for the first time in a decade. Why it’s taken so long.

A sign announces the coming headquarters of Monroe-based American Community Bank, which opened in 1998 and merged in 2009 with Yadkin Bank. A group planning to open a new bank in Monroe, American Bank & Trust, has said it will add to the list of banks in the region that have had “American” in their name. On Wednesday, the N.C. Office of the Commissioner of Banks granted charter approval for American Bank & Trust.
A sign announces the coming headquarters of Monroe-based American Community Bank, which opened in 1998 and merged in 2009 with Yadkin Bank. A group planning to open a new bank in Monroe, American Bank & Trust, has said it will add to the list of banks in the region that have had “American” in their name. On Wednesday, the N.C. Office of the Commissioner of Banks granted charter approval for American Bank & Trust.

North Carolina regulators on Wednesday approved the formation of a bank in Union County — a significant development for the state, which hasn’t seen the launch of a new bank in a decade.

The N.C. Office of the Commissioner of Banks granted charter approval for American Bank & Trust, a community bank to be based in Monroe. The last new bank to start up in the state was Jacksonville’s Coastal Bank and Trust, which applied for its charter in 2008 and opened the next year.

“We intend to bring back a community bank again that caters to the community,” Randy Adcock, president and CEO of the bank, said Wednesday. He added that underserved populations of Union County will benefit from the new bank. That’s because one of the planned branches will be in the town of Wingate, which doesn’t have a bank branch, he said.

The financial crisis brought the formation of new banks in the state to a halt. After the crisis, bankers faced a variety of challenges that turned them off from launching new banks, including a sluggish economy, increased regulations and low interest rates that crimped banks’ profit margins.

“I’d say the downturn had a big effect on it,” Adcock said, adding that another challenge that keeps away some would-be startup founders is raising money to launch a bank.

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The banking commission is requiring American Bank & Trust’s organizers to raise at least $20 million before it can open, he said. To win charter approval, the organizers had to raise about half of that, he said. The balance has not been raised but organizers are confident that it will be, he said.

Ray Grace, the state banking commissioner, said several factors are driving interest in forming new banks in North Carolina and some other parts of the country. Those include an improving economy, a loosening of federal regulations on banks and new heads of banking regulators, such as the Federal Reserve, under the administration of President Donald Trump.

Wednesday’s approval follows years of shrinkage in the number of banks chartered in the state, in part due to industry consolidation, Grace said. In 2006, before the financial crisis, the figure was 95, he said. That’s now, 38, he said.

Charters applications for two other North Carolina banks are awaiting approvals, Grace said. One is Spirit Community Bank in Statesville. The other is Community Bank of the Carolinas in Winston-Salem.

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Grace said the demand to launch community banks is a positive for North Carolina, particularly rural areas. Community banks tend to make loans in the markets from which they gather their deposits, whereas large banks tend to shift deposits out of rural areas and lend those funds in more lucrative, urban areas, he said.

Also, community banks are known for lending to small businesses, which might not have the same luck getting loans from very large banks, Grace said.

American Bank & Trust organizers led by homebuilder David Cutherberston unveiled plans for the bank in February.

Adcock said Wednesday that the bank expects to open in early spring 2019. Two branches are being planned, both on U.S. 74, he said.

Deon Roberts: 704-358-5248, @DeonERoberts
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