Whether beer, food or art, Asheville has an affinity for all things local. So it makes sense the city would embrace a homegrown bank, says Dana Stonestreet, chief executive officer of HomeTrust Bancshares Inc., which wants to retain its independence amid rapid industry consolidation.
Many bank CEOs say that, often moments before they sign papers to sell. But Stonestreet may have some credibility: After recent sales of Park Sterling Bank and Capital Bank Financial, HomeTrust is one of two North Carolina-based banks with assets of $3 billion to $35 billion. (First Bancorp of Southern Pines is the other.) HomeTrust is also the state’s most successful example of a former savings and loan that made the switch to commercial banking. Thrifts, which were typically owned by depositors instead of stock investors, have mostly vanished.
HomeTrust dates to 1926, when Clyde Savings and Loan Association opened in Clyde, a town of 1,200 that is 25 miles west of Asheville. Led by Ed Broadwell, who was president from 1965 to 2008, Clyde Savings changed its name to HomeTown Bank in 1996, then HomeTrust in 2003. The bank moved its main office to Asheville in 2012 and that same year converted from mutual ownership to a stock institution, raising $211 million in capital.
Five years later, HomeTrust has nearly doubled in size to $3.2 billion in assets and $2.3 billion in loans. Much of the growth stems from five acquisitions in the last three years, most recently Kingsport, Tenn.-based TriSummit Bank. The company’s markets now stretch from Knoxville to Raleigh.
Since 2012, HomeTrust has added 70 jobs and now employs about 200 people in Asheville, Stonestreet says. He encourages staffers to serve as directors of Buncombe County arts, economic-development and charitable groups.
The sales of Park Sterling, Capital Bank and BNC Bancorp aren’t surprising because of their backing from private-equity groups, Stonestreet says. Those investors pounced at the end of the 2007-09 recession, when most banks were starved for capital. “Private equity is all about rollups and harvesting one’s investments, and five to six years is a pretty typical holding period.”
HomeTrust never sought private-equity funding and feels no pressure to sell, provided it grows effectively, Stonestreet says. Its largest investors, each with more than 4% stakes, are New York-based BlackRock Inc., Australian investment company Paradice Investment Management and Pax World Investments, a New Hampshire-based money manager. Executives and board members control about 6%. With annual profit of about $10 million in recent years, the bank has repurchased a fourth of the shares issued in 2012. The stock price is up 150% since then.
While Asheville remains its largest market, HomeTrust’s growth depends on expanding in major cities. It’s the same challenge facing First Bancorp (“Moore money,” June 2016), which is based in Moore County but has entered Charlotte and the Triad in the last few years.
HomeTrust has hired 23 lenders and market leaders since 2012, including Jeff Mylton, who worked for Fifth Third Bank for 16 years before becoming HomeTrust’s Charlotte market president in 2015. His job is to build on the company’s acquisition of the Bank of Commerce. The bank’s Queen City staff of 18 has doubled in the last 12 months, he says.
Stonestreet, 63, joined Clyde Savings in 1989 when it had $200 million in assets and became CEO in 2013. With total compensation of $1 million last year, he has no plans to retire, though he’s planning for that day. “We work on succession planning all the time,” he says. “Not everyone is intentional about making that happen.”
Reflecting its big-city ambitions, HomeTrust last year added three Charlotte business people — former Duke Energy executive Stick Williams, retired banker Robert James and management consultant Laura Kendall — to its 11-member board.
Asheville doesn’t need to worry. “It would be a shame if Asheville didn’t have a major bank headquarters,” says HomeTrust’s lead independent director Larry McDevitt, a lawyer and former mayor. “We’re building a bank to grow and last, and we are in it for the long haul. That’s definitely the way the board looks at it.”