The National Bank of South Carolina

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The National Bank of South Carolina

1241 Main Street
Columbia, South Carolina 29201
U.S.A.
Telephone: (803) 929-2062
Web site: http://www.nationalbanksc.com

Wholly-Owned Subsidiary of Synovus Financial Corporation
Incorporated: 1905 as Farmers Bank and Trust
Employees: 600 (est.)
Total Assets: $3.5 billion (2005)
NAIC: 522110 Commercial Banking

The National Bank of South Carolina, a subsidiary of Synovus Financial Corporation, is a leading bank in South Carolina. Formed in the farming town of Sumter in 1905, the bank focused on the Pee Dee region of the state, in the northeastern corner, for its first several decades. At the time of its 100th anniversary, NBSC was still building its presence in the state, buying a number of smaller banks and building new branches. The company operated fairly autonomously from its Columbus, Georgia-based corporate parent.

Origins

The National Bank of South Carolina (NBSC) dates back to 1905. In that year, Farmers Bank and Trust was founded in the farm town of Sumter, South Carolina by C.G. Rowland. Rowland, a station agent for the Atlantic Coastline Railroad, had been assigned to the area 18 years earlier.

Originally operated from a grocery store, the bank moved into the former county courthouse in 1907. It was the only one of seven Sumter banks to survive the Great Depression. A branch was opened in the state capital of Columbia in 1965. In the early 1970s, assets were up to $80 million and the company had nine branches centered on the Pee Dee area.

Takeover Target in the 1980s

The holding company NBSC Corporation was set up in 1983. The bank, the seventh largest in South Carolina with deposits of $170 million, was already viewed as a takeover target as regulations were relaxed regarding banking acquisitions. NBSC had repulsed an offer from Greenville, South Carolina-based Southern Bancorp Inc. in 1982, saying the offer was too low. It was also discussing merger prospects with at least one other bank, Southern National Corp. of Lumberton, North Carolina, according to a later story in the News & Observer.

NBSC renewed its interest in selling after asking prices for banks began to fall later in the decade. Discussions with Southern National Corporation simmered until 1990, when the $3 billion bank, based in Lumberton, North Carolina, made a serious bid to acquire NBSC, which had assets of $540 million. Southern National proposed an all-stock deal worth $53 million. NBSC's retail emphasis was considered complementary to Southern National's mainly corporate-centered business. "This is a good fit for us," said NBSC chairman Marvin D. Trapp. Southern National had the deal approved by the NAACP—which had questioned the bank's record of reinvesting in poor or minority communities—but called off the merger after a couple of months, citing "unexpected obstacles."

NBSC had pursued a few acquisitions of its own in the last half of the 1980s, buying the $5 million Bank of Summerton and the larger Lake City State Bank, assets $51 million, which dated back to 1940. It was also opening brand new offices in greater Columbia and Myrtle Beach.

NBSC followed other banks in the region by relaxing its loan requirements and withdrawal penalties in the wake of Hurricane Hugo. The October 1989 storm affected all of the bank's branches, noted American Banker, including the main office in Sumter, 100 miles from shore.

NBSC ended the 1980s as South Carolina's third largest bank. It had 28 offices in the state, total assets of $563 million, and about 450 employees.

Waking Up in the 1990s

Marvin D. Trapp, NBSC's CEO since 1973 and chairman since 1985, stepped down in 1991. He had first joined the company in 1963 as assistant vice-president for business development and advertising. Trapp's successor was Robert V. Royall, Jr., formerly head of Citizens and Southern National Bank of South Carolina (C&S of SC) and C&S Corporation's vice-chairman. Royall was also chairman of the South Carolina Ports Authority. He had left C&S after it merged with Sovran Financial Corporation.

Royall immediately made sweeping changes at the "very, very sleepy bank." He hired a handful of executives from C&S and restated 1990 earnings, shifting $1 million of net profit to loan-loss reserves.

NBSC was venturing into the Upstate in 1993, opening offices in Spartanburg, Greenville, and Greer. The area was growing rapidly, spurred by BMW's new North American plant. NBSC had also opened a branch at the other end of the state, Hilton Head Island, and had bought out couple of thrifts. By this time, it had branches in two dozen communities and assets of $974 million. NBSC Corporation also owned Sunsbank Life Insurance Company.

Another wave of consolidation was rolling over banks in the Carolinas, and though it was "the largest independent bank head-quartered in South Carolina," this time NBSC would not escape this time without itself being taken over by a larger competitor. It was able, though, to put off the inevitable for a couple of years.

According to American Banker, NBSC was stealing customers from the large North Carolina banks (such as First Union Corporation, NationsBank Corporation, and Wachovia Corporation) as they consolidated their Palmetto State acquisitions. "We set out from the very beginning to be the local bank," said one of Royall's early hires. "Our goal became one of stealing customers and selling our name…. If we only sold rate, we'd lose every time."

Acquired by Synovus in 1995

Synovus Financial Corporation, based in Columbus, Georgia, acquired NBSC in February 1995 for stock worth $153 million, or twice NBSC's book value. Synovus, which had assets of nearly $6 billion before the merger with NBSC, had gobbled up more than 30 banks in the previous ten years. It allowed them to remain relatively autonomous, however, and this would be the case with NBSC, which was allowed to keep its name and continued to refer to itself as a "community bank." The NBSC merger was Synovus' largest to date and marked its entry into the South Carolina market.

An analyst told the Atlanta Journal-Constitution that NBSC had below average return on assets and very high overhead. NBSC was operating 43 branches at the time of the merger. Total assets topped $1 billion.

William L. Pherigo, NBSC's president since 1991, was promoted to CEO in 1995. Robert Royall remained chairman. Pherigo was one of the many who followed Robert Royall to NBSC. Another, Fred L. Green, III, became NBSC's CEO in 1997.

A good word from one of NBSC's influential friends raised questions in 1999, at least among Democrats. Republican House Speaker David Wilkins appeared in a newspaper ad for the bank that listed his credentials as both speaker of the House and member of NBSC's board of directors. According to state Democratic chairman Dick Harpootlian, this went against a state law barring public officials from using their positions to promote business interests. "He has disgraced his office and should resign," said Harpootlian, adding that Wilkins had supported legislation favorable to the banking industry.

Synovus boosted its holdings in the Upstate by acquiring Spartanburg-based Carolina Southern Bank in 2000. Carolina Southern had been founded in 1989 and had four branches. Synovus lumped the new bank into NBSC, increasing NBSC's assets to more than $2 billion.

The National Bank of South Carolina celebrated its 100th anniversary in 2005. Assets had grown to $3.5 billion. It had a new president and CEO: Chuck Garnett, who was a C&S alumnus like his predecessors.

Principal Competitors

BB&T Financial Corporation; First Union Corporation; NationsBank Corporation; Wachovia Corporation.

Company Perspectives:

Like most things that are built to last, your banking relationship with NBSC will tend to appreciate with age. For nearly 100 years, longer than most banks have been in business, the thing that has set NBSC apart has been our strong customer relationships. We've helped businesses and individuals in South Carolina Prosper in the good times and ride out the not-so-good times, when words like "trust" and "relationship" really meant something. That's what makes NBSC the one bank worth changing banks for.

Key Dates:

1905:: Farmers Bank and Trust launched in Sumter, South Carolina.
1965:: Branch established in Columbia.
1983:: NBSC Corporation holding company is formed.
1985:: The Bank of Summerton acquired.
1986:: Assets are $350 million; company files public stock offering.
1988:: New offices built in Irmo, Myrtle Beach; Lake City State Bank acquired.
1992:: Branches opened in Camden, Florence, and Mount Pleasant; First Trident S&L acquired.
1993:: Offices open in Upstate, Hilton Head Island.
1995:: Synovus Financial Corporation acquires NBSC in deal worth $153 million.
2000:: Carolina Southern merged with NBSC.
2005:: At time of 100th anniversary, NBSC has assets of $3.5 billion.