Mike Mayer has tracked a circuitous route on his path to becoming the CEO of North Carolina’s biggest community bank. It’s been 39 years since he left Clemson University with a bachelor’s degree. Since then, he has helped lay groundwork for what became the largest U.S. bank, raised $30 million to start a Charlotte bank that was derailed by the recession of 2007-09 and held together a struggling institution long enough to sell it to a wealthy rival.
Now, Mayer, 61, holds a $1 million-a-year job aimed at transitioning a small-town rural N.C. lender into a viable competitor in the state’s five main urban markets. First Bancorp started in 1935 in Troy, a Montgomery County town that peaked in population at 3,400 about 30 years ago. It grew to $2 billion in assets by 2006 after acquisitions of banks in Thomasville, Latta, S.C., and Southern Pines, where it now has its headquarters. It entered Wilmington by buying the assets of struggling Cooperative Bankshares in 2009.
When Mayer arrived at First Bank in March 2014, the company had about $3 billion in assets and a market cap of about $250 million. The bank was led by Richard Moore, a former state treasurer who had joined the company’s board in 2010 and became CEO two years earlier.
First Bank now has $7 billion in assets, a market cap of $1.25 billion and growing niches in the Charlotte, Triad, Triangle, Wilmington and Asheville areas. It ranks seventh in deposit market share among banks that operate branch networks in the state. “It’s a great company that genuinely cares about its people and genuinely cares about its communities,” Mayer says.
Indeed, he says it reminds him of his first postcollege employer, a bank that also had about $7 billion in assets and was led by a brash Marine veteran.
SCRAPPY LITTLE PUP
Mayer grew up in Charlotte and played basketball for coach Hugh McColl Jr. at age 10. A dozen years later, he joined the coach’s bank, NCNB, after getting an offer that was about $1,000 more than another N.C. institution. “A thousand dollars would buy a lot of beer,” he laughs. “When you are 22 years old and making $17,000 a year, it is pretty big.”
After six months in the Queen City, Mayer was assigned in January 1982 to Florida, where he did the “Interstate 4 tour” over the next decade as NCNB gobbled up small and midsize Sunshine State banks on its run toward becoming today’s Bank of America.
“We were a bunch of cowboys,” he says. “We were a small player back then, and you get scrappy when you are the little pup.”
Mayer became city executive in Daytona Beach at 26, one of the youngest in the bank’s history. During his 10 years in Florida, he lived in Tampa, Orlando, Daytona Beach, Jacksonville, eventually landing back in Orlando and then back in Tampa. “I never knew what spring cleaning meant because I was never around long enough.”
Purchasing Gulfstream, Exchange, Pan American and Ellis banks within three years expanded NCNB’s presence, prompting derision from Florida rivals. They relentlessly reminded customers that NCNB stood for “No Cash, No Brains.”
That just gave the Charlotte-based company more inspiration, Mayer says. The parochialism was no match for the Florida expansion strategy developed by McColl’s brain trust and led during much of the 1980s by Gene Taylor, who spent 38 years at the Charlotte bank. In 1997, NCNB broke through by buying Jacksonville, Fla.-based Barnett Banks, the state’s largest lender. BofA retains the top market share for Florida bank deposits.
“The culture we had at NCNB in those days was just amazing. It was one of the greatest places you could ever work,” Mayer says. “I remain very devoted to Mr. McColl because he taught me some life lessons. He was such a great leader.”
In the early 1990s, Mayer returned to Charlotte and took increasingly senior jobs in commercial lending as the bank mushroomed in size and became NationsBank. He was a senior business lending executive covering western North Carolina and upstate South Carolina and later had a job covering parts of the Southeast. Over time, the bank’s larger scope made it a more bureaucratic place to work, he says. He knew it was time for a change when he didn’t look forward to going to the office — and many of his colleagues were leaving the megabank.
“I’ve heard it said that when I got to NCNB, our swagger exceeded our capabilities,” he says. “By the time I left, our capabilities exceeded our swagger.” He departed BofA in June 2006.
He quickly learned that timing is essential in business — and nothing comes easy. Amid increasing signs of a housing-related recession, Mayer led an investor group that raised $30 million to launch Colony Signature Bank in Charlotte. It was the last N.C. bank to receive a charter from the State Banking Commission for more than decade because of the wreckage caused by the economic downturn. But Colony Signature never got off the ground.
“We raised the money, and we were going to be like Paragon [Bank]. It was going to be wonderful,” he says, referring to the successful Raleigh-based business lender that is now owned by TowneBank. “But by August 2008, I knew we were going to get killed.”
Mayer called a meeting of the investors. “We sent all of the money back to our investors, and those of us who had organized the bank pulled out our checkbooks and wrote checks to pay our bills. Mine was about $150,000.”
For the newly unemployed Mayer, “it was the low point, from a career standpoint.” But with an assist from N.C. Commissioner of Banks Ray Grace, it didn’t take him long to get back in action. He worked briefly for a small startup bank in Gastonia. Then in January 2010, he was hired as CEO of 1st Financial Services, a publicly traded owner of Mountain 1st Bank, which had 14 branches in western North Carolina. It had raised $36 million when organized in 2004 and had received $19 million in federal bank bailout funds, which Mayer thought gave it a cushion to ride out the recession and build a large company.
He was wrong. “I had no idea western North Carolina would be as bad as it was. You couldn’t sell anything.” Mountain 1st gave an $800,000 foreclosed property to a charity when it was unable to find a buyer. A decade later, Mayer notes that real estate in the mountain region is at record valuations.
Mayer spent more than four years at the Hendersonville-based bank, nursing troubled loans, unsuccessfully seeking new investment and answering to regulators. “It took a chunk out of me,” he says. “I’d never do it again.” But he turned down Moore’s offer in early 2013 to join First Bank because he and his board expected his departure could cause Mountain 1st to fail.
In January 2014, First Citizens Bank & Trust acquired Mountain 1st for $10 million, including $8 million to repay the U.S. Treasury for Troubled Assets Relief Program loans. “A manager of a significant bank investment fund called me and said, ‘People don’t realize what you were able to do at Mountain 1st,’” citing many other Carolinas banks that went bust in the period.
Two months later, Mayer joined First Bancorp as president. “Richard stuck with me and waited for me to get here,” he says. He liked that First Bank’s shares were widely held, unlike faster-growing N.C. banks whose ownership was dominated by institutions more likely to sell to larger rivals. Sure enough, BNC Bancorp, Yadkin Financial, Capital Bank Financial and others were acquired.
“It was an 80-year-old bank that had some deep roots, but it also had challenges that neither the board nor Richard were blind to,” Mayer says. The main issue was reducing the bank’s reliance on slower-growth areas and expanding in more populated regions to boost profit.
First Bank already had footholds in Wilmington and Asheville after buying failed banks there in 2009 and 2011, respectively. Expansions continued with the purchase of Greensboro-based Carolina Bank for about $100 million in 2017 and Asheville Savings Bank for $175 million a year later. First Bank has the sixth-largest deposit market share in the mountain city.
“We always wanted to be in the state’s five big markets, and Asheville Savings Bank gave us a chance to do that,” Mayer says. “Even with the addition of Charlotte and Raleigh, Wilmington continues to be our fastest-growing market. We just have a really good team there, and the market is on fire.”
First Bank was outbid in some other acquisitions, which Mayer says is OK. “In hindsight, we think that the ones we got were the ones we needed and the ones we didn’t get, we’re probably better off without them.”
Beyond geographic expansion, Mayer says First Bank’s success stems from a revitalized corporate culture that has instilled confidence and trust. “We were just a dinky bank in Southern Pines that no one knew anything about. We had a lot of good people, but we didn’t have one central theme we could rally around. That’s what we’ve built.”
The bank hired customer-service consultants affiliated with Disney and Ritz-Carlton and designed a values-based strategy that Mayer says has paid off handsomely. “When you get everyone rowing the oar in the same direction — and there are now 1,140 of us — the boat gets moving really fast.”
The bank benefits from good chemistry between Mayer and Moore, who is CEO of the holding company, says Raleigh lawyer Dennis Wicker, a former N.C. lieutenant governor who joined the First Bank board in 2001. “Richard is probably more progressive politically, while Mike is a more conservative, traditional banker type. But they make a great team, they complement each other and they are very close.”
Mayer confirms that he and Moore, 60, look at many bank-related issues from different angles. “But 98% of the time, we come out at the same point,” he says. “One of the things about smart people like Richard is that they know what they don’t know. He didn’t know how to run a bank, nor did he want to. But he knows economics and finance as well as anyone, and he has had a completely different perspective after serving as the state treasurer and working as an institutional investor for Relational [Investors, a now-closed San Diego-based money manager].”
First Bank’s financial performance has helped its shares mirror or outperform industry averages over the past one-, three- and five-year periods. It raised its quarterly dividend in March and last November became part of the S&P Small Cap 600 index. Five of the seven analysts tracking the company’s shares rate it as a “buy.”
Whether First Bank will sell to a larger rival is a frequent conjecture among N.C. bankers because building stronger urban franchises in a fast-growing state makes it increasingly attractive. Staying independent remains a key motivation for its top executives, Wicker says.
“What Richard and Mike have in common that is unshakable is that they are both inspired to build something. I think they want to keep building on what they’ve built already.” ■