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Steve Jones thinks he can raise $75 million to $100 million for a new Raleigh-based community bank that will eventually top $1 billion in assets and expand outside the Triangle.
He expects the proposed Dogwood State Bank to open in the second quarter of 2019, pending approval by regulators.
To put that in context, Raleigh’s biggest community bank now, North State Bancorp, has assets of about $840 million and seven offices in the Triangle and Wilmington since opening 18 years ago.
Jones’ credentials to pull off the startup include more than 25 years of industry experience, much of it in North Carolina. He once led retail operations in five states for Royal Bank of Canada, which had acquired Rocky Mount-based Centura Bank and later sold its U.S. business to PNC Financial Services. He eventually moved to become chief banking officer for Yadkin Financial, which grew rapidly through acquisitions before its $1.8 billion sale to First National Bank Corp. in 2017. After a year with FNB overseeing its Carolinas’ operations, Jones left in mid-2018.
The person who hired Jones at both RBC and Yadkin was his mentor, Scott Custer, the former top executive at both institutions and current president of Wilmington-based Live Oak Bank. He will be chairman and one of six outside board members at Dogwood.
Organizers think they can raise the capital in North Carolina without seeking private equity or Wall Street investors.
“Given all the consolidation, there’s a new opportunity for people who used to invest in community banks,” Jones says. “I think we will find investors who have a passion for a community bank that goes into markets and provides capital for small businesses.”
While Dogwood has statewide ambitions, its organizers are eastern N.C. residents. In addition to Custer, who lives in Wilmington, other directors include Fielding Miller, CEO of CapTrust Financial Advisors of Raleigh; Richard Urquhart, a director at Investors Management Corp. of Raleigh; and Robin Perkins, CEO of Frontier Spinning Mills in Sanford. SEPI Engineering owner Sepi Saidi and former Yadkin director David Brody, both of Raleigh, round out the group.
Bank industry consolidation in North Carolina has outpaced the national rate, leaving an opportunity for a small business-oriented bank, Jones says. The state has several banks in the $10 billion to $30 billion range that focus on larger companies, and several more large regionals and megabanks that make larger loans.
Southern Pines-based First Bancorp is the state’s largest community bank with N.C. headquarters. Its assets top $5.6 billion.
New technology is making it easier for startup banks to offer equal or better customer service than older institutions, Jones says.
“With the right people, right products, right process — there is truly an opportunity for community banking.”
Two other former Yadkin executives, administrator Natasha Austin and financial officer David Therit, are Dogwood’s only other employees at this point.
