State Bank Financial in Atlanta has reduced its workforce by consolidating several company departments, as it pivots away from failed-bank loss-share agreements and looks to acquire healthy banks.
Additionally, Daniel Speight, a State Bank co-founder and its current vice chairman and general counsel, will leave the company in December.
The $3.3 billion-asset State Bank estimates it will save about $9 million yearly in noninterest expense from the job cuts. State Bank has begun a plan to consolidate functions in finance, legal, risk, credit, operations and technology. The cost-cutting plan should be completed by the second quarter.
State Bank's workforce has decreased by about 100 employees since the beginning of the year, Tom Wiley, chief executive of State Bank & Trust, said in an interview.
Many employees were dismissed following the early termination of State Bank's FDIC loss-share agreements that stemmed from the purchase of 12 failed banks. Layoffs also followed State Bank's acquisition of Georgia-Carolina Bancshares in July.
"Each and every general ledger expense account was scrutinized," Wiley said.
The 100-person figure also includes "normal attrition," Wiley said. When employees left, State Bank didn't replace them.
Keefe, Bruyette & Woods estimated in a Thursday research note that State Bank will save about $7 million from lower salaries and employee benefits and $2 million from lower technology expenses. The moves should produce additional yearly earnings of eight cents per share, KBW said.
Speight, who 58 as of State Bank's April 17 proxy statement, will leave the company partly because his workload has decreased, Wiley said. Speight handled about 1,200 lawsuits related to resolution of failed-bank assets that State Bank acquired. He now handles about 70 lawsuits per year.
"It's been our plan and understanding that founders will work themselves out of a job," Wiley said. "While having a general counsel is a luxury to some extent, it's not a necessity."
The efficiency plan is designed to set up State Bank for healthy growth in the future, Wiley said.
After being one of the busiest acquirers of failed banks during the financial crisis, State Bank has remained active on the M&A front. But its acquisitions have branched out of the banking sector. In March, it acquired Boyett Agency in Dalton, Ga., to serve as the foundation for a new insurance division.
The new cost-cutting program should help State Bank maintain that approach to the M&A circuit, Wiley said.
"We have rightsized our expense structure," Wiley said. "Our aspirations are to be larger, not necessarily large for the sake of being large. We will continue to look for additional acquisition opportunities both in terms of other banks and specialized lines of business."