Here's one way to build market share in a county where you have little: hire dozens of employees from its biggest bank all at once.
That's exactly what United Community Banks Inc. of Blairsville, Ga., did in Hall County, Ga., last week.
In a hiring spree that analysts said was extraordinary - and that has sparked accusations from Regions Bank about the tactics used - the $5.3 billion-asset United added nearly 50 employees. All defected from Regions branches in Hall County.
They followed three top Regions executives, who left April 30 to lead a branch United plans to open in fast-growing Hall County, northeast of Atlanta.
With the added staff, United, which has just a 0.48% deposit share in Hall County, is now looking to add as many as five branches there within 12 months. Meanwhile Regions, which has the No. 1 market share in the county, nearly one-third of its deposits, has been scrambling to replace dozens of employees, including a number of senior-level executives who had been with it for years.
Jimmy Tallent, United's president and chief executive officer, said he has longbeen interested in expanding in Hall County but did not make a move to do so until these three Regions executives approached him a few weeks ago. He said he had known them for years.
The 49 others followed unexpectedly, he said, but United was more than happy to hire them.
"We are very fortunate to find folks who came to us and wanted to work with us in a community bank environment," Mr. Tallent said Friday. "We are just thrilled and honored to have them."
Regions is a unit of the $84 billion-asset Regions Financial Corp. of Birmingham, Ala. It entered Hall County in 1996 by buying the $3.1 billion-asset First National Bancorp of Gainesville.
Pete Miller, the CEO of Regions' southeastern region - who also lives in Gainesville - said he was stunned to learn that 49 of its 371 employees in Hall County did not report to work last Monday.
"I think I have a reasonably good pulse of the community," he said. "And there were no signs of significant issues or problems."
Mr. Miller said Regions has already hired a new CEO for its so-called mountain group to succeed Rich White, the top executive to leave.
It has also filled most of its senior lending jobs, and Mr. Miller said that by the end of this week the nine branches in the county would be fully staffed.
"We will recover from it very quickly," he said. "At least in my region, I'm not losing any sleep over it."
How Mr. White persuaded dozens of employees to follow him to United is a matter of some dispute.
Mr. Miller said he had heard through various sources that Mr. White and two other former Regions executives persuaded dozens to join them by telling them that Regions was pulling out of Hall County.
"It's my understanding that they told them that we are doing things that were not on the mark … that we were abandoning the county and making changes to the incentive compensation plan."
In an interview late Friday, Mr. White said that though he spoke with many Regions employees after he resigned April 30, he did not say Regions was pulling up stakes. Instead, Mr. White said, he got the other 49 employees to join him by contrasting the new opportunities at United with those at Regions since the recent purchase of Union Planters Corp.
"I told them that that they have a chance to go with United Community's community bank model, a model that Regions had decided to abandon," he said.
Jeff Davis, an analyst with First Horizon National Corp.'s FTN Midwest Research in Nashville, agreed that the defections would do little to affect Regions as a whole but said that in the Hall County area it may have problems retaining market share.
He also noted that such an exodus is extremely rare in the banking industry. "It's surprising - the size and number of people," Mr. Davis said. "Its fairly common for lenders to move around, but not this many at once."
Mr. Miller said that some employees who believe they were misinformed have asked for their jobs back. He would not say if he would rehire all those who change their minds, but he did say Regions might be interested in bringing back a few of them.
