For Carolina Empire Builder, Small Is Beautiful

Banker William G. Stevens won't shop at Wal-Mart.

First of all, the national superstore is not a customer of Greenwood Bank and Trust. Secondly, it's way too big.

"I'm just not a big-store person," Mr. Stevens says on a driving tour of his adopted hometown. "I don't have anything against Wal-Mart, but they take business away from our customers."

It's that love of things small-towns, stores, and banks-that is driving Mr. Stevens life's work now. Shunning the large Carolina banks that he spent much of his career building up, Mr. Stevens is out to revive what had become a dying concept in many South Carolina towns: the community bank.

Mr. Stevens is president and chief executive officer of Community Capital Corp., a $140 million-asset holding company that is overseeing the creation of a network of community banks in rural western South Carolina. The company went public on the American Stock Exchange last month, with promises of bringing back home-style banking to small communities that Mr. Stevens says are sometimes ignored by the larger banks that control the lion's share of the Carolina banking market.

"If we go into the Columbias, the Greenvilles, and the Charlottes, we're dead," Mr. Stevens said in the genteel drawl of his native Charleston, S.C. "We're going to stay away from them."

Mr. Stevens, 52, wet his feet in de novo banking with the opening of Greenwood Bank and Trust and Community Capital in Greenwood eight years ago. A former regional executive of NCNB, the predecessor to NationsBank Corp., he left the larger bank because he didn't want to move away from Greenwood. He had started his banking career in 1970 at the Bank of Greenwood, a community bank that is among the many NationsBank consumed to reach its present massive size.

"NCNB was a wonderful bank, but even then they were not interested in the small communities," Mr. Stevens said. "I'm not saying they were wrong. Look at their stock, and look at mine."

Although Greenwood Bank and Trust was exactly the kind of small-town banking he craved, it wasn't enough for a man described by colleagues and competitors as "aggressive," a "maverick," and "consummate deal maker."

"Our plan was to operate a community bank for five years," Mr. Stevens said. "If we did it well, maybe we could do it in other places."

And so, Community Capital began spawning banks. Clemson Bank and Trust opened two years ago and Bank of Barnwell County two weeks ago. Bank of Belton is scheduled to open this week, and Bank of Newberry County is expected to follow later this year.

The banks are or will be run independently, with separate groups of organizers, boards, management, and names. The holding company provides computers and back-office operations.

Each bank was formed by Community Capital and a group of local organizers. Both parties make a financial commitment to capitalizing a bank.

"We determine a group's commitment by dollars," Mr. Stevens said. Each group of organizers had to put up $1 million and on average another $100,000 individually.

Donna W. Robinson, president and chief executive officer of Clemson Bank and Trust, said she seized the opportunity to head a small bank in Clemson, a university town about an hour from Community Capital's Greenwood headquarters.

Ms. Robinson, a former Wachovia employee, said she has a lot in common with Mr. Stevens.

"We were community bankers in a big-bank environment," Ms. Robinson said. "Now we're back in our own environment, doing what we like to do."

Community Capital's new banks are part of an wave of start-ups in South Carolina. In 1996, 10 new banks opened; another four are being organized.

"We seem to be going through one of those times when there seems to be a very positive feeling about community banks," said Kelly Smith, executive director of the Independent Banks of South Carolina. "The economy is good, and independent community banking has identified its niches in the financial institution arena in South Carolina."

Mr. Stevens said he has turned down at least 10 potential banks and expects to turn down more. He said he won't take on anymore de novo banks because it's a drain on earnings. But he will consider buying existing community banks and bank branches. Also, Bank of Barnwell County will buy more than $50 million in branch deposits and loans from $1.5 billion-asset Carolina First Bancshares, Greenville, S.C.

Community Capital's performance has been less than stellar, with return on assets of 0.67% and return on equity of 5.41% last year. Both return on assets and return on equity showed marked improvement in 1993 and 1994, reaching above 1% and 10%, respectively, for the first time. But those figures fell again with the formation of Clemson Bank and Trust in 1995.

Now, Mr. Stevens said, it's time to start making money-and he's not shy about saying so.

When Jimmy Lollis, the organizer and president of Bank of Belton, called to say there could be a delay on the bank's original opening date, Mr. Stevens quipped, "Open those accounts. Make some money."

Belton is the company's smallest market, a former textile town with fewer than 6,000 residents that doesn't have its own independent bank. The company intends to serve all of Anderson County, in which Belton is located.

Greenwood, which has a population of more than 20,000, is sort of the exception to Mr. Stevens' rule. It's a brew of a big city and small town that has a modern, almost suburban feel to it. A wide Main Street is lined with renovated brick storefronts and banks of all sizes.

Greenwood already has a longtime community bank, $120 million-asset County Bank, which was founded in 1933. Its president and chief executive officer, R. Thornwell Dunlap 3d, is not a big fan of Community Capital or Mr. Stevens, and he questions whether what the company does is true community banking.

"Our mission is to be the premier independent community bank in Greenwood County," Mr. Dunlap said. "They've focused on these other markets, which ... probably distracts them from any one market."

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