Old Pals Cook Up New M&A Plans for Atlanta Bank

When State Bank Financial (STBZ) Chairman Joe Evans hired an old friend, it signaled a new chapter in his Atlanta company's growth strategy.

David Brown, who joined State Bank this month as executive vice president for corporate development, was until recently managing principal of Sagus Financial Fund, which invested in community banks. Brown and Evans worked together on the launch of Sagus in 2007, and Brown in earlier years had been an investment banking advisor to Evans' former bank, Flag Financial.

When Sagus decided to close at the end of this year after a profitable run, Evans was inspired to invite his longtime colleague — an expert in community banks and mergers and acquisitions — to help spearhead State Bank's expansion plans.

Brown "brings a great deal of M&A talent to the table," Evans says. Before co-founding Sagus, Brown advised financial institutions on acquisitions as an investment banker at Burke Capital Group in Atlanta.

"He's very well-connected with community banks throughout the Southeast," Evans says. "He has great strategic and analytical insights into how money is made."

The $2.5 billion-asset State Bank has built its reputation on acquisitions of failed banks, buying 12 of them since its $300 million recapitalization in July 2009. Now it's moving on to new kinds of targets; Brown is on the lookout for appealing open banks and profitable nonbanking businesses.

"We're not just laser-focused on depository banking institutions," Brown says — a declaration supported by State Bank's acquisition of payroll processing company Altera Payroll last year. These kinds of targets will give the Atlanta firm plenty of room to grow, Brown says — which makes State Bank "the kind of company I would have invested in."