First Citizens Bancshares Inc.’s new head of wealth management services says her unit will grow by exploiting niche markets within the Raleigh, N.C., company’s footprint and that of its fast-expanding IronStone Bank subsidiary.
Carol Yochem, who was hired last week as an executive vice president and the manager of wealth management services, said the $14 billion-asset banking company’s midsize status will help its wealth unit grow as the parent continues to expand in the Southeast.
She said she is confident that First Citizens can increase its $11 billion of assets under management or custody by shadowing the parent’s growth. First Citizens operates 340 branches in North Carolina, Virginia, and West Virginia. It has also announced plans to open offices this year in Tennessee and Maryland.
In 1997 First Citizens created a subsidiary named Atlantic States Bank in Georgia and Florida. In 2002, Atlantic States started a western U.S. division called IronStone Bank and in 2003 dropped the Atlantic States name in favor of IronStone. IronStone Bank now has 50 offices in Georgia, Florida, Texas, New Mexico, Colorado, California, Arizona, Oregon, and Washington.
Ms. Yochem said the IronStone subsidiary is growing quickly. “As they grow we will be coupled with them from a wealth management perspective,” she said. “There is a tremendous opportunity with IronStone.”
Burton Greenwald, an analyst at BJ Greenwald Associates in Philadelphia, said it would be difficult for a midsize regional bank to support a significant wealth management operation throughout such a large footprint. Ms. Yochem said she is well aware of the company’s limits.
“We will select niches to operate in,” she said. “Within those niches there is a tremendous opportunity for us to grow significantly.”
“We are large enough to have a wide range of products and services and large enough to work with institutional and high-net-worth clients,” Ms. Yochem said in an interview Monday, “but small enough to provide highly customized solutions.”
“We fill an important midsize niche,” she added. “If you are too big, you lose flexibility. If you are too small, you don’t have the capital or the resources to deliver what you need to deliver, especially when it comes to wealth management.”
Analysts said First Citizens faces stiff competition for wealth management market share in the Southeast from large banking players like Wachovia Corp. and Bank of America Corp.
“These banks are so large that they really dominate in the Southeast,” said Mr. Greenwald. “Nonbanks and small brokerage companies can stand because they aren’t banks. Small banks can stand on customer service. Midsize banks can get lost in the shuffle.”
Ms. Yochem, who was an executive vice president of wealth management at SunTrust Bank in Nashville, said she was drawn to First Citizens for the opportunity to run and expand its wealth management unit regionally.
“I think big firms definitely have the ability to be successful, but there are tradeoffs,” she said. “They come at a loss of personalization. Large banks are so involved with mergers and acquisitions that they lose sight of the relationship managers. Wealth management is a personal business that is ultimately won because of these relationships.”
In her new post Ms. Yochem leads a team of nearly 300 wealth management professionals; she has overall responsibility for personal trust, estate settlement, corporate trust, retirement plan services, brokerage, asset management, life insurance, financial planning, business valuations, and private banking. She said she plans to expand the bank’s roster of wealth professionals as the business grows.
“I think if you look at the dynamics that are taking place demographically across the country you will find the first wave of baby boomers are getting ready to retire in January 2006; that puts a lot of money in motion,” she said. “These same boomers are going to be the beneficiaries of a large transfer of wealth.”
