COLUMBIA — First Reliance wants to become South Carolina’s next billion dollar bank.
As large banks across the Palmetto State have consolidated, moving headquarters across state lines, the Florence-based community bank has been attracting a new team of industry veterans and making moves to elevate its profile across the Carolinas.
It’s been enough for some analysts to add it to their watch list this year.
“What’s interesting about First Reliance is they’re in a growth spurt,” said Chris Marinac, an Atlanta-based researcher for investment advisory firm Janney Montgomery Scott.
In his first report on the bank, Marinac points out First Reliance CEO Rick Saunders lured in chief operating officer Robert Dozier from Federal Home Loan Bank of Atlanta and finance chief Robert Haile from what was formerly Charleston's CresCom Bank.
Most recently Columbia-based Justin Strickland, formerly of Southern First, has joined on as president.
"Their bench has grown deeper and deeper every quarter,” Marinac said. “I think, as they have added this new leadership, the customers are following."
The bank currently sits at $750 million in loans and other revenue-producing assets. Strickland, who will oversee the commercial business, hopes to reach the $1 billion mark within the next couple years.
Before joining First Reliance, Strickland, as president, took Greenville-based Southern First from $500 million in business in 2006 to $2.5 billion a year ago.
The Florence institution is also hoping to take advantage of gaps created by industry mergers to snap up market share.
"Business is booming and the backyards are booming," Marinac said of the South Carolina market. "They find themselves in a good state with good demographics and less banks."
SunTrust Bank and BB&T Corp., the third- and-seventh-largest banks in South Carolina by business volume respectively, joined in 2019 to become Truist, the sixth-largest U.S. bank with a projected $442 billion in assets and $324 billion in customer deposits. With that, the headquarters were moved from Atlanta and Winston-Salem to Charlotte.
Then, in 2020 there was the $2.3 billion merger of Columbia's South State Corp. and its headquarters move out of the Capital City to central Florida.
And the second-biggest bank once headquartered in the state, CresCom, on an acquisition run recent years itself, was acquired for $1.1 billion last year by United Bank of West Virginia.
When banks grow past a certain point they must turn their focus to bigger customers, Marinac said, making the best use of their time. So those smaller customers may migrate to smaller but growing institutions, like First Reliance.
"The Truist marriage is still evolving and the systems changeover is only just starting to happen now,” Marinac said. "That creates a lot more opportunity."
"South State, I think, is going to have the same issue," he added.
First Reliance already has inroads in Winston-Salem, the fast growing markets of Charleston and Greenville, as well as a presence in Lake Norman near Charlotte.
“It really does set the table for big potential for growth over the next 12 to 24 months,” Marinac said.
He said the same is true for other banks such as Southern First; First Community in Lexington, which federal data shows has $1.1 billion in deposits; and Grand South in Spartanburg, with $868 million in deposits.
Marinac said First Reliance has competitive advantages, having invested in the longevity of its home mortgage business that will feed other parts of the company. Its loan portfolio is also clean, with next to no defaults or payment deferrals amid the economic downturn caused by the coronavirus pandemic.
While business for the bank was flat this past year, Marinac is predicting growth in excess of 14 percent in 2021 and 12 percent the year after.
"They have considerable momentum, now they just have to keep executing," he said.
Strickland also said he's hoping for a 15 percent year over year growth rate or higher as he aims for the $1 billion mark.
And as far as future prospects, he said: "the second billion tends to come easier."