Bank Watch

Raleigh’s Capital Bank considering headquarters move to Charlotte

CommunityOne Bank President and CEO Bob Reid stands in front of the CommunityOne sign at the bank's headquarters on East Morehead Street. Raleigh-based Capital Bank, which is buying CommunityOne, said Wednesday it is considering putting the headquarters of the combined company in Charlotte.
CommunityOne Bank President and CEO Bob Reid stands in front of the CommunityOne sign at the bank's headquarters on East Morehead Street. Raleigh-based Capital Bank, which is buying CommunityOne, said Wednesday it is considering putting the headquarters of the combined company in Charlotte. dlaird@charlotteobserver.com

Raleigh-based Capital Bank is weighing a relocation to Charlotte once it receives regulatory approval for its planned acquisition of CommunityOne Bancorp, officials said Wednesday.

CommunityOne, a bank holding company that moved its headquarters to Charlotte from Asheboro in 2013, announced the acquisition in November. At that time, company officials said no decisions had been made on headquarters for the combined company.

Chris Marshall, chief financial officer for Capital Bank, told the Observer in an interview Wednesday that Raleigh and Charlotte are in the running. But he said there won’t be any determination until regulators have ruled on the acquisition.

“That’s something we will consider more seriously after we have regulatory approval,” Marshall said. “Charlotte will get serious consideration.”

The roughly $350 million purchase is expected to close in the first quarter. The deal will form a bank with nearly $10 billion in assets.

If Charlotte is picked as headquarters, Capital Bank would be the second-biggest bank based here by assets, behind Bank of America. Marshall said Capital Bank would have roughly 2,000 employees after the acquisition.

Charlotte has been home for Marshall and Gene Taylor, Capital Bank’s CEO and chairman, since the former Bank of America executives launched their company in 2009 to buy up troubled banks. The regional bank now has about 150 branches in Florida, the Carolinas, Tennessee and Virginia.

The acquisition will boost Capital Bank’s presence in the Charlotte market, as it acquires branches from CommunityOne.

“We have always wanted to have a big presence in Charlotte,” Marshall said. “It’s just taken us a while to find the right bank to acquire.”

Capital Bank’s focus on North Carolina has been growing. Last year, Capital Bank and its holding company switched headquarters to Raleigh from Coral Gables, Fla. – the state where it acquired some of its first failed banks.

Also last year, Capital Bank changed regulators as the subsidiary swapped its national charter for a state charter. The bank, once regulated by the Office of the Comptroller of the Currency, is now regulated by the N.C. Office of the Commissioner of Banks and the Federal Deposit Insurance Corp.

The Federal Reserve remains the regulator of the holding company.

Marshall said Capital Bank changed to a state charter because it has been growing its presence in North Carolina. He said the change from a national charter also reflects the fact that his company, which initially didn’t know where in the U.S. it would buy up banks, has defined its target footprint as the Southeast.

“I do think smaller banks tend to consider the fact that it is less expensive to be regulated by a state regulator, generally speaking, than the OCC,” Marshall said. “But that’s secondary to being regulated by someone that knows your market.”

CommunityOne’s purchase follows years of efforts to return the company, which went by the name FNB United Corp. until 2013, back to health after the financial crisis. Last year marked the first time CommunityOne posted an annual profit since 2007.

In November, CommunityOne said in a securities filing that its president and CEO, Bob Reid, will be awarded $2 million in severance in connection with the Capital Bank acquisition. Severance was also announced for other CommunityOne executives.

CommunityOne will add to the names of community banks that have disappeared from Charlotte. Here and elsewhere, community banks have dwindled in number, the result of years of industry consolidation. Since 2007, the number of community banks headquartered in the city has shriveled from seven to four.

Deon Roberts: 704-358-5248, @DeonERoberts

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