North Carolina’s financial institutions were challenged in the past year by escalating interest rates that slowed home loans and boosted the cost of funds. Still, more than half of the institutions on Business North Carolina’s annual list of the state’s 50 biggest banks and credit unions based in the state reported a return on assets of more than 1%, which is a traditional industry benchmark.
Revenue also increased at most institutions, boosted by higher rates charged on loans amid the increased inflation. The gains were more modest than in 2021, when many banks benefited from record activity in home loan originations and refinancings, along with robust fee income from Payment Protection Program lending. In 2022, and early this year, the housing market has lost much of its luster, while memories of the PPP are fading.
Only one N.C.-based left the list in the last year because of a takeover: Greenville-based Union Bank was bought by Pittsburgh-based FNB Corp. for $117 million.
The rankings are based on information supplied by New York-based S&P Global Market Intelligence.
10 institutions that made news in the last year:
2. Truist Financial
Being a big super-regional bank with branches in 17 states has its upsides. But Truist faced major pressure this spring amid the collapses of Silicon Valley Bank and First Republic Bank. Investors feared that deposits of big regionals would move to the megabanks because of unrealized losses in Truist’s bond portfolio, along with concerns over real estate credit quality. The company raised about $3 billion by selling a minority stake in its insurance brokerage. Its dividend yield was 7.7% in mid-May.
3. First Citizens BancShares
It occurred this year, not in 2022, but Deal of the Year honors go to the Holding family-controlled bank after it bought the failed Silicon Valley Bank in a negotiated deal with the Federal Deposit Insurance Corp. The company’s market value increased 70% to $14 billion following the deal’s closing in March. Investors believe that First Citizens can profit handsomely from the California-based company’s operations. The move followed a solid 2022 in which the bank’s revenue and profit doubled after the purchase of specialty lender CIT Group.
4. State Employees’ Credit Union
It’s not your grandfather’s SECU. The second-largest U.S. credit union is undergoing major changes in policies and corporate culture, two years after the board hired Jim Hayes as CEO. SECU now uses credit scoring to boost loans from more affluent members; launched its first major ad campaign; nearly doubled spending on outside consultants; hired a facilitator for director elections; and stopped requiring male branch office staffers to wear ties. The credit union also reported its first annual decline in assets in decades, reflecting a decision not to be as aggressive as many rivals in offering higher interest rates on customer deposits.
6. First Bancorp
The state’s biggest community bank added $1.2 billion in assets and eight branches in South Carolina with the Jan. 1 purchase of GrandSouth Bancorp. Its ability to increase earnings per share annually over the past decade ranked in the top 4% of U.S. banks, according to the KBW investment firm.
8. Local Government Federal Credit Union
Started in 1983 as an offshoot of the State Employees’ Credit Union, the Raleigh-based institution plans to unhook that relationship starting next March. The group’s board and CEO Dwayne Naylor, who succeeded longtime leader Maurice Smith, plan a digital-first emphasis without operating credit union branches. Since inception, LGFCU has paid SECU for members to access the bigger credit union’s 250-plus offices. Naylor says the credit union is better off relying on ATM, digital and telephone services.
9. Coastal Federal Credit Union
Tyler Grodi became CEO and president on April 1, succeeding Chuck Purvis, who held the job since 2012. Grodi had been CEO of EFCU Financial in Baton Rouge, Louisiana for 11 years. Asset growth was flat last year after increasing 46% between 2018-21. Net income plunged as housing-related revenue dried up.
16. Self-Help Credit Union
The Durham-based credit union focuses on lending to small businesses that struggle to find financing elsewhere. That’s proved to be a solid business for many years, but especially last year as it recorded the most rapid revenue growth of N.C. institutions, excluding First Citizens. The credit union cited significant increases in loan and investments.
17. First Carolina Bank
Rapid growth continues at the closely held Rocky Mount-based company, which ranked 25th two years ago. CEO Ron Day opened its first office in Greenville, South Carolina in April, a year after it opened its first Palmetto State office in Columbia. It also has offices in five N.C. cities and in Atlanta. Greenville real estate developer John “Jett” Ferebee is board chair.
24. Uwharrie Bank
In its 39th year, the Albemarle-based bank topped $1 billion in assets, serving more than 23,000 households. Founders including CEO Roger Dick remain committed to local ownership with no single person having outsized control. The company’s shares have had an annual return of 7.5% since inception in 1984.
38. Lumbee Guaranty Bank
One of the 19 Native American-owned banks in the U.S. was founded in 1971 after raising $667,000 in capital. Nearly 98% of subscribers were Native Americans. Lumbee interests remain in control with the bank now reporting nearly $500 million in assets and 14 branches in three southeastern N.C. counties. Kyle Chavis has been CEO since 1999.