CCB Financial Corp. of Durham, N.C., said it will convert half its 201 traditional branches into high-powered sales centers in an effort to boost revenues.

Executives at the $7.7 billion-asset banking company have been telling analysts that they plan to complete the transformation by 2001. The company is explaining the program to employees throughout its branch network in North and South Carolina.

Analysts said the conversion is coming at a time of increasing competitive pressure on CCB. It has relationships with 450,000 households, more than 90% of them in urban markets along the rapidly growing Interstate 85 corridor through central North Carolina.

CCB has also grown rapidly in the last five years, making six acquisitions in North Carolina that added $2 billion of assets. Moreover, it expanded into new territory in 1997 with its biggest deal to date, paying $325 million for $1.4 billion-asset American Federal Bank of Columbia, S.C.

Despite CCB's enviable market position and its rapid growth, analysts said the company faces tough competition from much bigger rivals like First Union Corp. and BB&T Corp.

"It's an effort to better leverage this big investment they have in their branch system and improve operating efficiencies," said David West, an analyst at Davenport & Co. in Richmond, Va.

CCB employees are to be retrained to rotate through the branches working as generalists, loan originators, product salespeople, and tellers. A new compensation structure includes commissions and other incentives based on group and individual sales targets, said Jenny Repass Kobin, CCB's director of investor relations.

The company is also hiring people, from stores like The Gap, who have retail sales experience, Ms. Kobin said. These people will replace staff members who retire in the next few years.

A test of the strategy last year at three branches in Greensboro, N.C., brought in higher revenues. CCB said revenues per employee grew 6.5% in traditional branches but 8% in the three sales centers.

In addition, CCB said the cross-selling ratio in its traditional branches improved 0.9% last year but jumped 4.1% in the sales centers. Annual net income per dollar of employee expense rose 10.2% for traditional branches but 15.4% for the centers.

"They are getting a really good feel for how to use the branch network more efficiently," said Edward Nazarian, an analyst at First Union Capital Markets.

Analysts said the company is looking not only for revenue growth in its branch network but also for expansion of its fee-based businesses, particularly trust and asset management.

Executives told a meeting of the Bank and Financial Analysts Association in Florida this month that they could also get that growth through acquisition.

Market watchers also would not rule out another acquisition. "They are interested in slowly expanding their franchise in contiguous markets," said David Trone, an analyst at Credit Suisse First Boston. "They will continue to do some nickel and dime deals."

Centura Banks Inc., a $7.9 billion-asset company in Rocky Mount, N.C., is frequently mentioned as a potential partner in a merger of equals with CCB. Neither company would discuss the likelihood of a deal.

Centura, with its technological capabilities, and CCB, with its attractive branch territory, in tandem would make an even more tantalizing takeover prospect for bigger banking companies, analysts said.

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