Startup Triad Business Bank raises $51M, mostly from locals
Triad Business Bank expects to open in March as a living, breathing symbol of the economic vitality of its region, CEO Ramsey Hamadi says.
Such optimism is deserved given that he and other organizers raised $51 million as of last Friday, he says, making it one of the largest new banks in the U.S. formed since the recession of 2007-09. That’s $51 million in escrow, not pledged, with about $40 million coming mainly from Triad and N.C. business people.
Final approval from regulators is pending, but the plan is to have offices in Greensboro, High Point and Winston-Salem in which veteran lenders work with some of the 10,200 Triad businesses that have annual revenue of $1 million to $100 million. The bank will mostly rely on funding its loans with deposits gathered from its business customers and wealthy individuals, eschewing the traditional approach of selling certificates of deposits and savings accounts to retail customers.
CEO Ramsey Hamadi says the new bank’s success relies on the support of business owners in each market, particularly the 15 directors and four executives who have committed about 20% of the capital raised, or about about $10 million. Among those making the biggest commitments, each topping $500,000, include:
- Stanley Bradshaw, a veteran bank investor and former CEO who lives in Pinehurst.
- Kenan Wright, president of Eden-based general contractor The Wright Co.
- Kevin Jessup, managing partner of Salem Investment Partners, a Winston-Salem-based private equity group
- Chris Dunbar, president of High Point-based Blue Ridge Co., a real estate developer.
- Greg York, president of High Point-based Vann York Auto Group, which owns five car dealerships.
- Hamadi, a Marine who came to the Triad to work at NewBridge Bank in 2009 after being chief financial officer at St. Louis-based Pulaski Bank.
Other directors of Triad Business Bank include Arthur Samet, CEO of contractor Samet Corp; Nexsen Pruett lawyer Christine Myatt; retired R.J. Reynolds Tobacco Co. chief HR executive Lisa Caldwell and Ed Pearce, president of Tencarva Machinery Co.
“Before we started the offering, we worked to make sure that in all three cities, we had leaders in the community who wanted to be part of this bank,” Hamadi says. Indeed, he says, there was lots of interest because Triad leaders recognized that less than 2% of the region’s deposits were held by local community banks, down from 24% in 2014. The change happened because eight significant local banks were acquired over the last six years.
“It is clear that the dominant super-regional and nationwide banks are transferring wealth away from this market, using the Triad’s deposits to fund loans in faster growing markets, often outside of North Carolina,” according to the bank’s offering circular.
BB&T’s headquarters move to Charlotte as part of its merger with SunTrust Banks to create Truist Financial, may provide an opening for rivals. But Hamadi doesn’t see that as a big factor, noting that BB&T’s focus is on bigger companies than the $5 million to $50 million revenue size businesses targeted by the upstart.
Investing in Triad Business Bank is a bet on Hamadi, who joined NewBridge Bank when it was trading at $1 share and appeared on the verge of insolvency amid the worst recession in decades. Six years later, Yadkin Financial bought the Greensboro bank for about $450 million, or about $10 per share. Hence, Hamadi can make the claim that NewBridge’s market value gained 1,000 percent during his tenure.
Philadelphia-based investment bank Janney Montgomery Scott helped Triad Business Bank raise capital and has agreed to invest as much as $15 million. Janney is a subsidiary of Horsham, Pa.-based Penn Mutual Life Insurance, one of the nation’s biggest mutual-owned insurers.
“The Triad’s economic story isn’t bad despite having lost a lot of jobs in large businesses in the more traditional industries,” Hamadi says. “It’s actually a pretty good economic story because we have so many good small businesses. We think our bank will be important to this market.”