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Robert Hill, SCBT's president and CEO, announces his second open-bank deal in nine months as it looks to consolidate in South Carolina and Georgia. SCBT has also bought three failed banks since January 2010.
August 8 -
SCBT Financial Corp. in Columbia, S.C., announced Tuesday morning that it is buying the $546 million-asset Peoples Bancorporation Inc. in Easley, S.C., for $28 million in stock.
December 20 -
SCBT Financial Corp. in Columbia, S.C., added $35 million in capital base to complement its acquisition last week of a failed bank.
February 22
SCBT Financial's deal for First Financial Holdings would be a sea change for dealmaking in the Southeast.
The $5.1 billion-asset SCBT (SCBT), in Columbia, S.C.,
For many observers, the deal is reminiscent of the 1995 merger of equals
"This is a big acquisition. … It's big in the message it sends: SCBT wants to be a big player," says William Wallace, an analyst with Raymond James. "For BB&T, the Southern deal was their first deal that showed they were serious. Now, I don't want speculate that they want to be like BB&T, but I think this suggests they are not afraid of getting bigger."
SCBT, which will assume the First Financial name for the holding company when the deal closes in the third quarter, is poised to rise to a new level but isn't overreaching, Chief Executive Robert Hill Jr. said.
"In today's banking industry, strength and scale are important and this deal gives us the ability to build a platform that can be easily expanded across the Southeast," he says. "Are we out to build the next BB&T? No."
Hill, along with Wayne Hall, First Financial's chief executive, told analysts in a conference call Wednesday that executives realized the potential of a combination in 2009 but knew the timing was wrong then.
SCBT's presence tends to be more inland, while First Financial is closer to the coast. "Where they were strong, we were not and vice versa. It sets us well for the future," Hill says.
First Financial, which has acquired two failed banks during the downturn, had some credit issues, but it largely
"We've been pretty public in saying that you need to be $10 billion and we wanted to be one of the preeminent banks," says Hall, who would serve as president of the company. The company had set some geographic goals for expansion, which included being stronger in Greenville, S.C., and Savannah, Ga. "We accomplish most of those goals in this one transaction."
While First Financial was fixing itself,
"I think First Financial maybe saw that SCBT's stock didn't go down after the deal and wanted to be next," Wallace says.
Hall did not explicitly say that SCBT's stock performance after Savannah was part of the motivation to sell, but he says a strong currency was definitely a consideration.
"When you do a deal, part of the consideration is will the stock be better before or after," Hall says. "As demonstrated today, the market likes this deal."
First Financial's stock was up 10%, and SCBT's had risen 1.3% late Wednesday.
Going forward, the combined company will be on the prowl to acquire banks primarily outside of South Carolina with $500 million to a "few billion" in assets, Hill says. But first, it is going to take its time — likely until late 2014 — integrating the operations and putting the controls in place to allow it to increase its assets to more than $10 billion. That is the threshold where the Durbin amendment kicks in, fees to the Federal Deposit Insurance Corp. rise and the Consumer Financial Protection Bureau begins oversight.
"In the latter part of '14 if things are going well, we will begin to plan for the next steps," Hill said during the call.