Monday, May 16, 2022

Dogwood State Bank aims to revitalize N.C. community banking

Steve Jones has $100 million in his pocket, 75 employees and is ready to make some noise in North Carolina banking.

The CEO of the new Dogwood State Bank thinks his institution is poised to build a substantial bank after opening its new headquarters office in Raleigh last month. “There are no community banks headquartered in Charlotte and we are one of only two headquartered in Raleigh,” he says. (North State Bank is based in the capital. ) “We are uniquely positioned if we get the right people because these are two of the best markets in the U.S. to do banking.”

Jones and Dogwood board Chairman Scott Custer originally planned to start a new bank on their own. But it turned out to be more effective to undertake a recapitalization with West Town Bancorp., which operated Morehead City-based Sound Bank, with branches in Greenville and Wilmington. Dogwood raised $70 million from three investment firms — Philadelphia-based Patriot Financial, McLean, Va.-based FJ Capital Management and Baltimore-based T. Rowe Price Associates  — plus $30 million from wealthy individuals and families.

Jones and Custer are veteran N.C. bankers, having helped build Yadkin Financial Corp. before its $1.4 billion sale to Pennsylvania’s FNB Corp. in 2107. They’ve moved the former Sound Bank’s headquarters to Raleigh, where 25 people now work for Dogwood. They will soon sign a lease for a bank office in Charlotte’s Southpark neighborhood, Jones says. There are no immediate plans to operate in the Triad.

Dogwood President Greg Heaton, another former Yadkin veteran, is based in Charlotte, while Brian Kessler will be the market executive. Dogwood also has hired six people for a planned 15-person SBA lending group that will operate from Charlotte, hoping to replicate Yadkin’s record as the state’s most active SBA lender, Jones says.

The pending merger of BB&T and SunTrust Banks should benefit Dogwood and others as the natural disruption of a merger turns off some customers and employees, Jones says. Dogwood will focus its lending on small- and medium-sized businesses and doesn’t plan to operate more than one office in either Charlotte or Raleigh.

Dogwood shares are listed as DSBK on the OTC Pink Sheets market, but there’s been no trading activity so far, Jones says. Former West Town shareholders own shares along with the new investors.

In addition to Jones and Custer, Dogwood’s board includes five well-known N.C. business people:

  • Fielding Miller, CEO of Captrust Financial Advisors in Raleigh.
  • Sepi Saidi, CEO of Raleigh engineering company Sepi.
  • David Brody, a Raleigh developer whose Kinston-based family has owned various businesses in eastern North Carolina.
  • Richard Urquhart, a retired chief operating officer of Raleigh-based Investors Management Corp., the holding company controlled by James Maynard.
  • Robin Perkins, owner of Sanford-based Frontier Spinning Mills, one of the world’s largest yarn manufacturers.

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David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at

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