The 1,805 citizens of Latta, S.C., are about to get back their hometown bank - though in a highly unorthodox way.
Six years ago, $19 billion-asset SouthTrust Corp. of Birmingham, Ala., bought Latta's only locally based bank as a jumping off point into South Carolina. From Latta Bank and Trust Co., SouthTrust grew its South Carolina operations to its current $325 million of assets.
The local bank became SouthTrust Bank of Dillon County, just another part of SouthTrust's massive seven-state, 400-office network.
But that's about to change.
The management at the Latta bank - essentially the team that ran it before the sale - is spearheading a local effort to buy it back.
"We're way out here in the boonies," said R. Walton Brown, who has been president of the Latta bank for the past 16 years and would continue to hold that position if the deal went through. "We just felt that a bank in a little community like this might best serve the community as an independent."
Motivated in part by a concern about SouthTrust's consolidation strategies, Mr. Brown organized a group of local investors about six months ago and went to SouthTrust with a proposal to buy the bank. The Birmingham bank was receptive, and at the end of last month the two sides formally agreed to a deal.
"We've been operating this holding company for 25 years and no one has done that before," said Frederick W. Murray, executive vice president at SouthTrust, who helped negotiate the sale. He said Mr. Brown "just felt like he had a chance to have his own show over there and become something of an entrepreneur."
Mr. Murray described the situation as a "friendly parting." SouthTrust wasn't looking to sell the bank but liked the offer, he said.
SouthTrust has been focusing its South Carolina efforts in the more dynamic Greenville, Columbia, and Charleston markets, not the northeastern part of the state where Latta is located, Mr. Murray said.
"We entered the state with that bank as a foothold, not as a target," he said. "It was just to get our toe in the water."
Mr. Brown and his group hopes to receive regulatory approval this fall to buy the bank. The plan then is to raise $4 million by offering stock at $10 a share. "We feel that if we can distribute ownership of the bank to the community, we can become a stronger institution," he said.
The tentative schedule is to make the stock offering in November and take over the SouthTrust operation - renaming it Carolina Community Bank - early next year.
Carolina Community would open with about $19 million of assets. Mr. Brown said that a branch might be opened soon thereafter in nearby Dillon - a move SouthTrust was never interested in - and that a national charter might be sought.
Analysts knew of only one other case in the region in which a executives of a bank had bought it from its holding company. In early 1992, two senior executives and 140 customers of the $52 million-asset First American Bank in Pensacola, Fla., bought it for $3.2 million. It has since more than doubled in size, and the stock, which the initial investors bought at $8.67, is now selling at $30.
"We were going against the grain, but it worked out extremely well for us," said H. Cary McCoy, executive vice president of First American and one of the organizers.
