CertusBank to sell banking operations, remaining branches

Former Certus CEO John Poelker
Former Certus CEO John Poelker

South Carolina’s CertusBank said Monday it plans to sell its bank operations and all of its remaining branches, in the latest move for a lender that has struggled to improve its financial health.

Certus, founded in Charlotte by former Bank of America and Wachovia Corp. executives, said it has struck deals with a variety of banks to buy its branches, deposits and certain loans in South Carolina, Georgia and Florida.

It marks the latest sell-off for Greenville-based Certus, which since November has been under a consent order issued by the Office of the Comptroller of the Currency. The order requires Certus to maintain certain capital levels and fix deficiencies in its management, leadership and board oversight.

Monday’s sale comes after Certus announced plans earlier this year to exit branch operations in North Carolina by selling remaining locations in the state.

In a statement on Monday, the bank said the latest sales are the result of “deliberate efforts to review CertusBank’s strategic options in light of its capital challenges and implement a course of action that provides the best available outcome for the bank’s customers, communities, teammates and stakeholders.”

Bank executives were not available to comment on the announcement or what it means for the future of the company. A spokesman said the bank declined to comment further.

Under the deal announced Monday, High Point-based Bank of North Carolina plans to buy seven South Carolina branches from Certus. Branches in Georgia and Florida will all be bought by lenders based in Georgia.

The sales require regulatory and shareholder approval, Certus said. It expects the deals to close in the third and fourth quarters of this year.

In addition to the branch sales, Certus said Monday it is closing its branches in Columbia, Charleston and downtown Greenville, S.C., and Ponte Vedra, Fla.

The sale of its banking operations means Certus will no longer operate branches under its name. That step follows the shedding of other operations as Certus has sought to slash expenses amid mounting losses and concentrate its focus on community banking. In September, it announced agreements to sell its mortgage and wealth divisions.

Last year, Certus appointed a new CEO, John Poelker, following the firing of some of its co-founders. During the first quarter of this year, the bank posted a loss of $33.6 million, compared with a loss of $9 million a year earlier.

Certus said Poelker resigned last month to focus on recovering from recent heart surgery. The bank named Len Davenport, who most recently served as its chief investment officer and treasurer, as its new CEO.

Certus dates to 2010, when Milton Jones, Walter Davis and Angela Webb, former Bank of America and Wachovia executives, obtained a bank charter for a Charlotte-based company called Blue Ridge Holdings Inc. Blue Ridge, which called its banking subsidiary CertusBank, grew in part by buying failed banks.

Last year, Jones, Davis and Webb were fired amid rising losses and questions from shareholders about expenses.

A fourth co-founder, Charlie Williams, a former managing director for Bank of America, resigned before the three were fired. Following his resignation, Williams told the Observer his departure was not related to the claims of inappropriate spending.

The three fired executives later sued the bank and a hedge fund manager, claiming the manager sought to defame the African-American executives and convinced the bank’s board to fire them.

Certus has said it fired the executives because of their performance, not their race. The hedge fund manager has denied making any racial comments.

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