An Atlanta-based investment banking company has started a fund to invest $100 million in banks of all sizes in the Southeast.
T. Stephen Johnson & Associates announced recently that it will take positions of up to 9.9% in banks in eight states through its Southeast Bank Fund. The investments will be passive, the company said - the fund managers will not seek mergers for the banks they've invested in.
"We are selecting banks that we think will naturally progress toward acquisition," said Stan Taylor, a partner in the fund. "We will be doing nothing proactive to make that happen, nor be hostile in any way toward management."
Mr. Taylor, formerly president of Commercial Bank of Georgia, said the fund has invested about 20% of the money in the first two weeks of operation, and intends to invest in 75 to 100 banks. One-third of those will have $75 million to $250 million of assets, another third $250 million to $1 billion, and the rest $1 billion to $15 billion, he said.
The company said the initial funding came from one of the nation's largest pension funds, which it declined to name.
"For the most part, the banks in the Southeast are healthy and growing, and the consolidation is occurring in banks of all sizes," T. Stephen Johnson, the other principal partner, said in a press release.
Mr. Taylor said the fund decided to concentrate on the Southeast because it has the most banks that meet its criteria, and they have strong growth potential. Consolidation is also most active in this region, he said.
Mr. Johnson and Mr. Taylor will be members of the fund's investment advisory committee. Its chairman will be Robin Kelton, a principal in Fox- Pitt Kelton, a London-based investment company.
Other committee members will be Edward Sebastian, formerly vice chairman of NCNB Corp. and currently chairman of Resource Bancshares in Columbia, S.C.; and M.G. Sanchez, a member of the board of the Federal Reserve Bank of Miami.