The owner of Community FirstBank has merged its coastal lending arms into CresCom Bank, a transition it is making without two of its founders and key executives.
John D. Russ and Frank Cole are negotiating to leave Charleston-based Carolina Financial Corp., where they had been chief executive officer and chief financial officer, respectively.
Jerry Rexroad, an executive vice president at the holding company, has been named to replace Russ as CEO on an interim basis, said spokesman Scott Brandon. Also, William Gehman, a vice president and controller at Carolina Financial, has been tapped as acting CFO.
The bank owner declined to discuss the reasons for the management shuffle, saying it still has to sort out issues involving Russ’ and Cole’s employment contracts. “We hope for a positive resolution as soon as we can,” Brandon said Tuesday.
Cole could not be reached for comment. Russ, who turns 65 this year, said he could not publicly discuss the details of his talks with the board of directors.
“It is my intention to retire, and I have informed the company of my intention to retire,” he said Tuesday. “It’s my understanding they have put me on leave of absence until they review their obligations to me.”
Carolina Financial was formed 15 years ago by Russ, Cole and John M. Settle, all former executives with Home Federal Savings Bank.
After raising more than $6 million in a private offering, the holding company opened its first Community FirstBank branch in 1997 at 288 Meeting St., which remains the company’s headquarters.
Settle retired a decade ago, just as Carolina Financial was expanding into the Myrtle Beach market by forming Crescent Bank. The pending departures of the remaining co-founders coincide with a plan that Russ announced in 2009 to combine the separate charters of the Charleston and Grand Strand banks.
The deal was approved in 2011 and finalized last week, when Community FirstBank and Crescent began operating as CresCom Bank. David Morrow is CresCom’s CEO.
The merger comes as many coastal lenders, including the former Community FirstBank and Crescent, are still trying to shake off the damage from the real estate bust that took hold five years ago.
Contact John P. McDermott ?at 937-5572.