In the winter of 1993 J. Michael Kapp was a senior vice president and a rising star in the Columbia, S.C., office of one of the largest and best- managed banks in the Southeast, Wachovia Corp.

Shocking everyone, including himself, he quit his job that winter and took a position across the street as head of a deeply troubled $46 million- asset community bank, Bank of Columbia.

Mr. Kapp acted on a desire that many mid- and upper-level executives entrenched in large bank bureaucracies throughout the country likely share - a wish to go it alone. The underlying reason, he says, boils down to impact.

"Being in charge of retail sales at Wachovia, that's a big job," he says. "Yes, I had 300 people reporting to me and had to make decisions, but in the end, that's just one area. Here, with just a few people, we can come up with an idea in the morning and do it by the end of the day. And by the next day, see how it is working.

"That's what it's all about. We can makes things happen quicker."

Mr. Kapp had no choice but to make things happen quickly. In place of the layers of bureaucracy that enfolded him at Wachovia, Mr. Kapp found himself thrust into the glare of a spotlight at his new bank, suddenly performing before a hostile crowd.

The problems were manifold: The bank had lost $1.2 million the year prior to his arrival, disgruntled shareholders were suing because management wouldn't sell the company, and management was hampered by a formal agreement with the Office of the Comptroller of the Currency that added an additional layer of oversight on the bank.

While he was apprised of the complex situation before taking the job, Mr. Kapp sometimes wondered if he had made the right move. He had a wife and two young children to support. He also had his reputation and a 20-year career at stake. His friends and family told him he was nuts for leaving Wachovia - and they weren't even aware of the full extent of the problems.

"There were times when I looked at myself in the mirror and said, 'What have I done?' Mr. Kapp says, sitting in his Main Street office of the bank, a subsidiary of $105 million-asset Comsouth Bankshares of Columbia.

The rookie CEO almost didn't get into the batter's box. Soon after telling his Wachovia bosses he was leaving, he learned that the Comptroller's office had rejected Comsouth's decision to hire him. According to terms of the agreement imposed in December 1992, the regulator had the authority to approve all new managers and directors.

It said no to hiring Mr. Kapp, citing his lack of experience as a chief executive and leaving him in the lurch. The board traveled to Atlanta to ask the regulator to reconsider, which it eventually did, allowing the Kapp family to stop holding its breath.

That episode was just one of many that the company has overcome since its founding in 1987. Comsouth was put together that year by a group of veteran bankers with the idea of building it into a multibank holding company, perhaps eventually owning community banks throughout the state, and then selling it at a profit after five years or so.

The Columbia subsidiary, then called the Commercial Bank of the South, lost money almost from its inception in 1988 by relying too heavily on commercial customers and the real estate market, which was bottoming out at the time.

The company's second bank, the Bank of Charleston, on the other hand, succeeded after its founding in 1990 by focusing on traditional small-bank customers, providing the earnings necessary to keep the parent company afloat.

The differences between the sister banks - separated by 113 miles - evolved into something more than just a matter of strategy. Spats grew over the future of the company, specifically over whether to sell Comsouth when suitors came knocking in 1992.

That question, which is the subject of a pending lawsuit, eventually led to the ouster of two founding officials and the resignation of several original directors.

"It was more of a personality conflict than anything else," says James E. Finley, a real estate investor and one of the dissident directors who eventually resigned.

"Once the Charleston people decided not to sell, it became us versus them. We were in favor of selling; they were not - but that's what makes for a ball game."

Just a month after Mr. Kapp took over, Mr. Finley and a handful of other dissident shareholders - together owning about 8% of the stock - filed suit against management, charging it with using heavy-handed, illegal practices to keep the company from being sold.

The shareholders had discovered that the board had spurned offers from National Bank of South Carolina of Columbia (acquired by Synovus Financial Corp. of Columbus, Ga., last year) and Carolina First Corp. of Greenville, without consulting them. The court ruled against their suit.

Current management denies that the two banks ever made formal offers. Even if they had, it was the wrong time to sell the company because Comsouth was burdened by nonperforming assets that made the true value of the company difficult to assess, Mr. Kapp argues.

"We thought then and think now that you create value through true earnings and no loan-loss problems," he says. "Then you know what you got when a suitor comes. I knew that there was a market here for a small solid bank, and I think we're proving that."

In his two and a half years at the helm, Mr. Kapp has slashed nonperforming assets by 25%, turning a $120,000 loss in 1993 into a $93,000 gain last year. Earnings for the first quarter of 1995 boomed to $128,000.

In addition, Comsouth was listed last month as the top public company in South Carolina in terms of return-on-equity growth for 1994 - up 95.8% to 11.12%.

Legg Mason Wood Walker Inc. says it is considering making a market in the stock this year. Interest in the stock may be building in part because of the growing fame of the company's largest individual shareholder, Jerry Shearer, managing partner of Mid-Atlantic Investors, which has speculated in a number of thrifts before steering them toward mergers.

Mr. Shearer, who was once the company's chief financial officer and remains a director of the Bank of Charleston, controls 6.6% of the stock.

Mr. Kapp's primary interest these days, however, is in attracting new customers. Among other initiatives, the bank routinely invites small- business owners into its stately downtown headquarters to listen to a presentation.

About half of those presentations result in new customers, Mr. Kapp estimates. As for the other half, they are at least aware of the bank and could lead to referrals, he says. The bank also has a messenger service, where a bank employee goes to the customer, instead waiting for the customer to come to the bank.

"I had those days," Mr. Kapp says, recalling his first months on the job. "But it's amazing what making money will do."

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