Georgian Bank of Powder Springs, Ga., is being transformed in what seems like the blink of an eye.
The $71 million-asset institution, which had modest goals of in-county growth, will soon become a $210 million-asset bank with regional expansion on its mind.
The growth will stem from a private placement of $50 million organized by Gordon Teel, the founder and former chairman and chief executive of the $1.6 billion-asset Bank of North Georgia in Alpharetta.
Mr. Teel left the subsidiary of Synovus Financial Corp. in Columbus in March, started a loan production company, G. Teal Enterprises, and dreamed of creating a regional bank. But because chartering takes nearly a year, he decided instead to reinvent an existing one.
In less than four months he lined up $20 million to invest in the 2-year-old Georgian, which had a high-quality, if short, track record and was run by Kenneth L. Barber, a former Synovus colleague.
"It was a new bank and was running smoothly, and just looked like a very clean platform to launch the new venture," Mr. Teel said.
Mr. Barber said the offer came at exactly the right time. "We were at the point where we were going to go out and have a secondary stock offering, so we could expand into other markets." Over 27 days this summer, with the help of about 75 investors, Mr. Teel raised another $20 million, and Mr. Barber and Georgian brought $10 million to the table.
Walter Moeling, an Atlanta attorney who has been working with community banks for 35 years, said that this is the largest investment he has seen in a Georgia community bank.
Mr. Teel's reinvention strategy was also remarkable, he said. "It's very unusual, but also very well thought out and very entrepreneurial. And investing in an existing bank with a management team he has worked with before accelerates his ability to get back into business very rapidly."
Because Georgian is less than 3 years old, it had to get approval for a "change in business plan" from the Georgia Department of Banking and Finance and from the Federal Deposit Insurance Corp. before it could receive the capital. It received that approval this month.
Mr. Teel will become the bank's CEO and chairman, and Mr. Barber will become its vice chairman. Mr. Teel has also added five new executives from Bank of North Georgia.
The capital infusion allowed Georgian to increase its lending limit more than sevenfold, to roughly $15 million. That will help Mr. Teel turn it into a regional bank catering to midsize businesses that need larger loans than traditional community banks can make.
Mr. Barber said that is not a substantial change from Georgian's original goals; it is simply reaching its objectives more quickly.
"It was definitely our plan to go into other markets, but we would have just done it much slower," he said. "Now we have a lot more money and a lot more talent and can grow the bank quicker."
Georgian has combined with Mr. Teel's company and as a result is gaining $160 million of loans. It plans to expand into five northwest Georgia counties in the near future.
It also hopes to have $350 million of assets within a year and at least $1.5 billion in five years-- all through organic growth. The original goal was to grow to $260 million in five years.
