More consolidation in North Carolina finance: Providence Bank of Rocky Mount plans to buy CB Financial, owner of Wilson-based Cornerstone Bank, for $11.2 million. We asked Providence CEO Ted Whitehurst to discuss the deal. He joined the bank at its formation in 2006 as chief lending officer, then became CEO last year, succeeding co-founder John Barker. Providence is a success story, reporting net income of $2.5 million last year. It has lent more than $640 million to eastern North Carolina companies and citizens since its formation.
How long have you been talking with Cornerstone?
We’ve been working through the process, including diligence for about four to six months
You are paying 23.5 cents per share for CB. Why is their stock price so low?
They have a lot of shares outstanding because they’d had some financial issues in the past. To keep adequately capitalized, they had to sell additional stock. They have turned things around and they are now on solid footing. So this is a naturally synergistic combination.
What role will Cornerstone have in the new bank?[CEO] Mark Holmes will be an executive vice president and their current board will become our advisory board in Wilson. Their customers will represent 25% of our total company and will have a significant influence.
Why did you leave a bigger bank to join Providence in 2006?
We were seeing all of these bank headquarters moving out of this market, so local people wanted to start local bank and keep it based here. It’s a great thing for this area to have a local bank here. [BB&T was based in Wilson for decades, while Rocky Mount’s hometown banks included Planters Bank and Peoples Bank, which combined to create Centura. It was later acquired by Royal Bank of Canada.]
Small-bank CEOs often complain about excessive regulations. Are you seeing any relief?
It’s a great discussion, but we just haven’t seen anything materialize yet. The regulators have gone with a one size fits all approach that puts things in place for the large banks, but makes it much harder for smaller banks to comply. We’re working with customers that we know and see all of the time.
What does the future of Wilson and Rocky Mount look like?
We have some good days ahead and we want to be here to help drive that. In eastern North Carolina, we’ve all got to work together to move our economy. We’ve got some good things starting to happen. [The Goodmon family’s] investment in Rocky Mount Mills and CSX’s plans should be a great spark for the area.