One of the co-founders of South Carolina's CertusBank has resigned.
Charles M. Williams, who had been vice chairman, left the Greenville-based company effective Monday. American Banker first reported his resignation Tuesday night.
Williams had given up his title of co-CEO last year, leaving Upstate native Walter Davis as the sole chief executive.
CertusBank opened its first Charleston-area branch last month at 174 Meeting St. in the city's historic district.
Williams told The Charlotte Observer that his resignation wasn't related to allegations of lavish spending at CertusBank by a hedge fund that invested money in the lender.
An article in American Banker published Friday reported questions about a number of expenses.
The trade publication cited a March 5 letter to CertusBank investors from a New York hedge fund manager who is also a CertusBank investor.
"Over the past two years, more than $100 million of equity capital has been erased in the most baseless and irresponsible way - by spending exorbitantly on personal excess masked as corporate expense," the publication says Benjamin Weinger of 3-Sigma Value Financial Opportunities wrote. "This can go on no longer."
CertusBank officials said the company is looking into the allegations.
"We take very seriously the issues raised in the article published by the American Banker," the bank said in a statement to The Greenville News. "The facts will be established and there is a board process in place to evaluate the claims and to respond in due course.
"CertusBank remains a strong financial institution, and our talented teammates are focused on providing quality services to customers in Greenville and in the many other communities we serve."
Federal Deposit Insurance Corp. filings show the privately held bank lost $37.4 million in the fourth quarter last year and $64.2 million for all of 2013.
The expenses highlighted by American Banker include "nearly $10 million paid to a consulting firm owned by Certus' top officers; $146,000 for three months of work by an executive's son fresh out of college; $2.5 million for three executive apartments and high-end upgrades; $347,000 for private plane trips; $131,000 for Carolina Panthers games; several hundred thousand dollars for sponsorships and charitable gifts; and more than $500,000 for American Express bills."
Wiliams was identified as one of the founders of Charlotte-based Integrated Capital Strategies, which was the consulting firm that received the nearly $10 million. The bank said it had properly disclosed those payments to investors and regulators.
Also, the $146,000 payment cited in the article was for $194-per-hour services from Williams' son, who had been out of North Carolina State University for about a year.
CertusBank's parent was organized in late 2009 in Charlotte and Atlanta, primarily by former senior Bank of America and Wachovia executives who raised $500 million to buy failed or ailing banks.
It closed its first deal in February 2011 when it took over the failed CommunitySouth Bank and Trust in Easley. It has grown by acquisitions and now has operations in 12 states, with more than 30 branches in the Carolinas, Florida and Georgia.
CertusBank is now more focsued on shoring up its finances and less focused on acquiring other lenders, which was one of Williams' area of expertise.
"I very much enjoyed my time with the company," he told the Charlotte Observer today. "But we needed to make decisions that would right-size the company.
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