Banks looking for good deals in the Greenville market have less elbow room than they did two years ago. In the past 18 months, several new banks have either moved to Greenville or announced plans to do so. Bankers say competition for good deals and customers is getting stiffer, so they’re relying on services, competitive rates and acquisitions to stay ahead.
Last week, the annual market share report released by the FDIC, or the Federal Deposit Insurance Corporation, showed that even some banks whose deposits increased now have a slightly smaller piece of the pie. The rankings exclude credit unions and give a narrow view of banks’ overall performance, but they illustrate changes in the playing field, including new entrants and acquisitions.
“There is no question there’s a lot of activity,” said Richard Bradshaw, president of specialized lending at Georgia-based United Community Bank (UCB), which moved into Greenville last year. He said Greenville’s health care and manufacturing base and status as the county seat are attractive. Plus, the growth is obvious.
“You only have to spend a little bit of time driving around downtown to see a lot of cranes,” Bradshaw said. He said his bank aims to be in the top 10 in Greenville within the next three to five years.
Competition to be the lender of choice for the projects those cranes are building, however, is pushing interest rates down, bankers say. In commercial lending, low rates for auto loans are a response to competition on the retail side.
Why now?
Bankers attribute the uptick in activity to banks’ restored health after rough times during and after the Great Recession. Some were in no position to lend, and even those that had not experienced major losses remained cautious for an extra year or two.
“If you think back two or three years ago, a lot of other banks were still sitting on the sidelines and trying to repair their own balance sheets,” said David Lominack, market president for TD Bank in the Upstate and Midlands.
“Fast-forward to today; those banks have cured a lot of their problems. They are back on the street and they’re aggressively looking for loan and deposit growth just like the rest of us.”
Why here?
Greenville is a city people talk about at national banking conferences. Along with Charleston, Chattanooga and Nashville, it is a target for those wanting to capitalize on an influx of capital to the Southeast. Charlotte- and Atlanta-based banks are eying the market, as are others farther away who like Greenville’s strategic location between those two cities.
The area’s diversifying economy is also a draw. A number of peripheral businesses and retail clients come along with larger manufacturing companies, even if smaller banks aren’t getting the business from the large corporations themselves.
The workforce also matters. UCB relied heavily on local talent when it moved into the Upstate last year. CresCom Bank moved into Greenville from the Lowcountry this summer largely because of available personnel, said president and CEO David Morrow. He said CresCom wanted to move into Greenville eventually, but made the unplanned move this year because of the opportunity to pick up Scott Frierson as Upstate market president.
“People bank with people. You can have ‘C’ location and an ‘A’ banker, and you’ll do great. But with this we’ve got an ‘A’ location and an ‘A’ banker,” Morrow said.
Morrow also echoed peers who said opportunities for C&I (commercial and industrial) lending are making Greenville attractive right now.
“It’s not a single source of intelligence you’re looking at,” UCB’s Bradshaw said. “Population, number of new building permits, surveys that reflect confidence of small and medium size business owners, media … part of that expansion is you want to make sure that particular population has the right talent available to drive that business.”
Banks’ response
In response to the competition, area banks have been looking to other ways to generate 
income. Loans guaranteed 75 percent by the federal Small Business Association (SBA) are popular among banks of all sizes because they reduce the risk to lenders and banks can generate secondary income from selling off the guaranteed part of the loan.
Greenville-based CertusBank was in the top 10 SBA lenders in the state this year, and UCB has increased staff in its SBA division from 3.5 people to 30 in the past six months. Other banks have recently announced new SBA specialists on staff.
UCB has also introduced asset-based lending to Greenville within the past six months and based the manager of that division in Greenville. C&I lending has also increased at the Palmetto Bank and others. In some cases that has come along with a shift away from commercial real estate lending. It allows lenders to purchase a company’s accounts receivable, rather than lend against them.
“C&I lending is our bread and butter and is a space where we can really utilize our in-house expertise to develop customized lending solutions for our customers,” said Ken Cummings, vice president/commercial relationship manager at CertusBank. “We continue to see an uptick in those types of credit requests and will remain very active in that space going forward.”
Finally, Lominack said TD Bank has been able to take advantage of international dollars being invested. Several banks have also added wealth management services or staff in the past year, aiming to provide services for the area’s high-net-worth customers. Such services enable long-term relationships with individuals whose assets can be counted in the millions of dollars.
Good news?
No such changes are happening at BB&T, said market president Natalie Ruggiero. The services that some banks are ramping up are “standard operating procedure” at her bank, which hasn’t been fazed by a recent increase in activity.
Most everyone focused on the positive aspects of the situation, as bankers are wont to do. They said competition means the market is healthy, and is a good problem to have if it’s a problem at all. Palmetto Bank’s Sam Erwin said the squeeze is mainly felt in its overall effects on growth.
“A lot of growth is being soaked up by new competitors. While there’s so much competition, you’re not feeling the growth like you would,” Erwin said.
There was one caveat, however. “I am unfortunately beginning to see the market get so competitive that some folks are starting to lose sight of appropriate risk,” TD’s Lominack said. “We are not going to go out of the risk curve to compete with banks that are just trying to get loan growth on their books.”
Whether their moves are risky or well-planned, banks will continue to make significant moves in this market. Bankers say, yes, there will come a point when there are too many players and the action slows, but they don’t expect to see it any time soon.
