United CEO: Bank Growth Goes Through Greenville
By David Dykes
Nearly three years ago, veteran banker Lynn Harton, named chief executive officer of United Community Banks Inc. (Nasdaq: UCBI), the Blairsville, Ga.-based bank holding company, was asked if United would move its headquarters to Greenville, where Harton has long lived and the company has a strong corporate presence.
Harton didn’t rule it in, or out.
Now, UCBI has disclosed it will move the headquarters of its banking subsidiary, United Community Bank, to Greenville and build a new headquarters on property it purchased at 200 E. Camperdown Way.
Bank officials said the company’s investment, estimated to be at least $24.8 million, will create 227 jobs and make United the largest bank headquartered in South Carolina.
In an exclusive interview, Harton said UCBI, the holding company, will remain based in Blairsville, Ga., a nod to the community’s legacy and its residents who “are the heart of the company.”
About 250 back-office employees will remain in Georgia, he said.
But Greenville is where United is adding talent for what will be a continued run at expanding the bank, said Harton, who also is UCBI’s chairman.
“The Greenville move is a growth story,” he said. “This isn’t a wholesale pick-up-and-move over here.”
Harton has generated an upswing in activity, acquiring other banks, and drawing to Greenville United’s chief financial officer, chief credit officer, commercial banking solutions president, president of mortgage operations, chief information officer and chief audit executive, among others.
Harton, 59, said he went to his UCBI board after thinking for some time that as the bank continued to grow, it would make sense to have the headquarters in Greenville, “and in practicality, it has evolved over time into the headquarters.”
Those discussions, he said, began in 2012, shortly after Harton was hired as United Community Bank’s chief operating officer in Greenville.
Harton said former United CEO Jimmy Tallent and a board member involved in his hiring both told him, “We’ve got to, over time, find a new place for the headquarters because we have big growth ambitions.”
They added, according to Harton, that “while Blairsville is an amazing place and (has) an amazing group of employees, we know that to do the things we need to do we’re going to have to move the headquarters.”
Harton remembers saying he didn’t want to leave Greenville and asking if Greenville could be the new headquarters. “And they said, ‘Well, maybe,’” Harton recalled with a chuckle.
“There were no promises but there has been an acknowledgement for some time that, in some fashion, this would happen,” he said.
The bank intends to remain independent and will grow organically, but it also could acquire more banks and some nonbank institutions, Harton said.
“We need to be thinking about what we need five years from now, what we need 10 years from now, not just worry about what’s going on this particular year,” he said.
United has the eighth-largest deposit market share among banks in South Carolina, according to the latest data from the Federal Deposit Insurance Corp.
It trails larger institutions such as Wells Fargo, Bank of America and Truist (the combination of BB&T and SunTrust banks), but Harton is undeterred in his plan to grow United, a regional bank, and perform at the highest possible retail and corporate banking levels.
Harton has said one goal is to increase United’s share of deposits in its markets so the bank ranks in the top five or six.
In January, Harton told analysts UCBI reported a strong fourth-quarter financial performance, including solid year-over-year loan and core deposit growth and profitability.
For the quarter, it posted net income of $59.5 million and pre-tax pre-provision income of $80.3 million. Diluted earnings per share of 66 cents represented an increase of 5 cents, or 8 percent, from a year ago.
Compared to the third quarter, diluted earnings per share increased 14 cents, or 27 percent. On an operating basis, which excludes merger-related and other charges, diluted earnings per share were 68 cents, up 7 cents, or 11 percent from last year, and 13 cents per share or 24 percent compared to the third quarter.
UCBI’s GAAP return on assets (ROA) was 1.30 percent and its return on common equity was 12.4 percent for the quarter.
On an operating basis, UCBI’s ROA was 1.34 percent and its return on tangible common equity was 16.2 percent. On a pre-tax, pre-provision basis, and excluding merger-related and other charges, ROA was 1.82 percent.
Included in the quarter’s results was a discretionary $8.5 million contribution to the United Community Bank Foundation. That lowered operating EPS by 7 cents and operating ROA by 15 basis points.
In December, United said it would expand bank operations in the Midlands with its first branch locations in two highly trafficked locations. The full-service branches in Columbia and in Lexington are previous Southern First Bank locations.
The offices build on the presence established by United in 2019, when it introduced commercial lending to the market.
While those are the first branches in the Midlands, United has about three dozen branches around the state, including concentrations in the Upstate, Charleston and Grand Strand area.
In 2017, UCBI completed its merger with Myrtle Beach-based HCSB Financial Corp. and HCFB’s bank subsidiary, Horry County State Bank, merged into United Community Bank.
The merger, company officials said, enhanced United’s presence in the fast-growing Myrtle Beach MSA and was an integral part of United’s broader strategy to expand in the fast-growing South Carolina coast.
In 2016, UCBI and Tidelands Bancshares, Inc. announced a definitive agreement for United to acquire Tidelands and its wholly-owned bank subsidiary, Tidelands Bank.
Tidelands was headquartered in Mt. Pleasant and, in addition to its Charleston-area presence, operated branch offices in Myrtle Beach and Hilton Head.
The Tidelands enhanced United's position in key growth markets in coastal South Carolina, provided an important bank platform to support a recent lift-out of a team of experienced, in-market lenders, and facilitated United's ability to offer expanded banking products and services to Tidelands' customer base, company officials said.
In April 2015, UCBI and Palmetto Bancshares, Inc., the holding company for The Palmetto Bank, jointly announced the signing of a definitive agreement through which Palmetto would merge into United.
United officials said the transaction fit well with United's geographic expansion strategy of focusing on major southeastern metro markets by enhancing its position in the attractive Greenville and Upstate South Carolina area.
At the time, United Community Bank operated 104 offices in four states: Georgia, North Carolina, South Carolina and Tennessee, and Palmetto was the third largest banking institution headquartered in South Carolina with total assets of $1.2 billion, loans of $832 million and deposits of $967 million.
Its bank subsidiary, The Palmetto Bank, was a 108-year-old community bank serving Upstate South Carolina through 25 branch locations in nine counties along the Interstate 85 corridor.
Now, after making other acquisitions in Florida and elsewhere, United is one of the largest full-service financial institutions in the Southeast, with $18 billion in assets, and 160 offices in Florida, Georgia, North Carolina, South Carolina and Tennessee.
In 2019, UCBI appointed Harton to be its board chairman, succeeding Tallent, who had been United’s chairman since February 2015.
And Harton’s Greenville roots run deep. He has been active on several community boards, including the Greenville County Museum of Art, the Peace Center and Artisphere.
Prior to joining United in 2012, Harton served in executive capacities with various financial institutions, including CEO of the Greenville-based South Financial Group, parent company of Carolina First, and chief credit officer for both Regions Financial Corp. and Union Planters Corp. He began his career with a 20-year stint at BB&T.
Two years ago, Barron’s, Dow Jones & Company’s weekly business publication, reported industry observers floated the idea of a five-way combination between South Shore Bank, Ameris Bancorp, CenterState Bank, Renasant and United Community Banks.
Asked if he is on the hunt for another deal, Harton said, “Some of those combinations could happen.”
But the real question, he said, is determining if a combination is good for everyone.
“No. 1, the cultures have got to fit,” Harton said. “The leadership has to be clear. It’s got to be something that’s good for the communities that the bank is in. It’s got to be good for the employees.”
Focusing on what looks to be an obvious return for the investors, without those other elements, is a fallacy, he said.
No matter what deal surfaces, Greenville will be at the forefront, he added.
“We love Greenville. We love the bank. We’re doing well,” Harton said. “Our hope, God willing, is that we get to do this for a long time.”