COLUMBIA -- Fred Green, who helped grow Columbia's NBSC into a statewide banking giant, said he plans to try it again, this time starting with one of the state's smallest banks.
Green told The State he wants to transform Sandhills Bank with its three branches in Bethune, McBee and North Myrtle Beach into a $5 billion Southeast powerhouse within five years.
Backed by investors from New York, Green said he plans to raise "hundreds of millions" in the next few months to start buying banks across South Carolina.
Green, a one-time Columbia business fixture, didn't rule out moving the bank's headquarters to the Midlands.
Even after billions in federal bailout loans, experts say it is a good time to buy banks as some continue to struggle with the lingering economic downturn.
More than 10 S.C. banks have been told by federal regulators to bolster their bottom lines. In April, Beach First of Myrtle Beach became the first S.C. bank in a decade closed by regulators. And the largest bank based in the state, Carolina First, agreed to be bought by Toronto Dominion soon after regulators issued a warning about its health.
"The banking industry in this part of country is going through a tremendous upheaval," said Green, 51. "We've hit bottom."
NBSC added more than $3.3 billion in assets while Green was the bank's chief executive and chairman between 1998 and 2009, according to federal data. However, NBSC already was one of the state's largest banks when Green took over.
In contrast, Sandhills had assets of $63.8 million as of March 31, ranking it No. 100 in size among the state's 110 banks, according to BauerFinancial, which rates the health of banks.
Green's plan for Sandhills faces competition from other banks in the Carolinas that have weathered the recession.
"There are a lot of firms with war chests ready to go," said Tony Plath, a banking professor at the University of North Carolina-Charlotte.
Some of the competing groups include former executives from Bank of America and Wachovia. And, just like Sandhills, they are backed by investors from New York, Plath said.
Other potential competitors include BB&T, RBC and SunTrust, he said.
Joseph Fenech, a bank industry analyst at Sandler O'Neill & Partners, said he also could see Columbia-based SCBT acquiring more banks. SCBT bought the distressed Community Bank & Trust of Georgia in January in a sale assisted by federal banking regulators.
Green said Sandhills would try to buy smaller banks in South Carolina at first; he expects competitors to try to buy larger banks outside the state.
Green started looking for a new bank to build soon after resigning as president of NBSC's Columbus, Ga.-based parent, Synovus, in May 2009. Green said he left because he wanted to come back to South Carolina. Synovus gave no reason for his departure at the time.
After moving to his home near Georgetown, Green spoke with investment bankers and regulators: "It came down to me finding a bank in good enough shape ... to raise offensive capital."
Through an investment banker, Green met Richard Kalikow, a New York real estate developer who headed a firm that invested $12 million into Sandhills late last year.
The bank, founded in 1959 as The Bank of Bethune, had done well after opening a North Myrtle Beach office a decade ago. But its fortunes fell in the recession. The bank lost more than $4 million last year, one of the worst performances in South Carolina, while its percentage of bad loans was among the state's highest, according to BauerFinancial data.
Kalikow was named Sandhills' board chairman after his Max Bancorp became the bank's largest shareholder.
Kalikow, a Georgia Tech graduate, said he wanted to buy a bank in the Southeast, where he thinks the economy will recover well.
"I have been in the money-lending business in real estate for 40 years; I know more about lending than most people," Kalikow said. "I don't have the fear of real estate that's in trouble. ... (Many banks) don't know how to deal with problem loans. Workouts are my specialty."
Max Bancorp has invested an additional $8 million in Sandhills since last year, Kalikow said. The $20 million invested overall has put the bank on strong enough financial footing to begin acquisitions, he said.
Green, who made his own undisclosed investment in the bank, became Sandhills' chief executive in May. He has been working with the bank's 20 employees to shed bad loans and bolster deposits and investments.