South Carolina's largest independent banking company said it has a deal for an in-state acquisition it's long been seeking.
Carolina First Corp., a $1.6 billion-asset company based in Greenville, agreed this week to buy $335 million-asset First Southeast Financial Corp., Anderson, for $65 million in stock. The deal is expected to close in the fourth quarter.
"We've been lusting after them for a long time," said William S. Hummers 3d, Carolina First executive vice president. "They have the second-largest market share of deposits in Anderson County."
The deal would give Carolina First a 30% deposit market share in the county, which is south of Carolina First's home base in Greenville County. Wachovia Corp., the Winston-Salem, N.C., superregional, controls about 27% of the county's deposits.
"We think it's one of the hottest markets in the South," said Mack I. Whittle Jr., president and chief executive officer of Carolina First. "This is just another means of filling our franchise out."
Mr. Whittle said the company wants to grow in the Interstate 85 corridor from Atlanta to Charlotte, N.C., and would consider buying banks across state borders.
But Carolina First's focus is on expanding in its home state, where Mr. Whittle believes it can achieve at least $3 billion of assets. The company has 54 branches in 20 of the state's 46 counties. First Southeast's main subsidiary, First Federal Savings and Loan Association of Anderson, has 11 offices and plans to open three Wal-Mart branches this year.
"We have some counties that we're not in but we need to be in," Mr. Hummers said, citing York and Spartanburg.
David C. Wakefield 3d, president of Southeast Financial, said his company thinks Carolina First's offer is a good value for shareholders. Based on Carolina First's Monday closing price, it will pay $14.75 per Southeast Financial share.
"They have a banking philosophy that we think is appropriate for this day and time," Mr. Wakefield said.
Carolina First, which specializes in commercial lending, is known as an innovative community bank because of its investments in technology companies. The banking company owns 18% of Affinity Technology Group, a maker of automated lending machines. It also has a 40% stake in the nation's second Internet-based bank, the Atlanta Internet Bank. That stake will drop to 20% when Atlanta Internet Bank goes public this summer.
Analysts generally applauded Carolina First's move, saying the deal strengthens its presence in South Carolina.
"I'd say geographically, it's a good move for them," said Marguerite Sons, a bank analyst at Interstate/Johnson Lane in Atlanta.