The parent company of Cabarrus Bank and Trust, Bank of Stanly and Anson Bank and Trust is now looking to combine the banks and find a new name that isn't tied to a specific area.
It's a strategic reversal for Uwharrie Capital Corp., based in Albemarle. For more than a decade, the company has operated the banks separately, with the county names, to attract customers who wanted to keep their money local. A marketing team is now working with the bank to review possibilities for a new name.
"It will be something that brands us as a community bank but not particularly to any geography," CEO Roger Dick said.
The company announced the plan in a securities filing. Uwharrie predicts it will save between $750,000 and $1.2 million per year. Dick said that would mainly come from computer system and regulatory compliance costs. The bank lost $241,000 for shareholders last year.
The combination is expected to close in the fourth quarter.
The change is also a reflection of the strain on the community bank model. Thirty years ago, Dick said, a small bank could thrive with as little as $25 million in assets. Now, bankers say you need as much as $1 billion. All told, Uwharrie's three banks have about $545 million in assets.
"I’ve used the analogy with our board," Dick said. "We might be a great wagon maker, but it’s the turn of the century, and Henry Ford down the street is talking about a horseless carriage."
Wednesday, March 20, 2013
Uwharrie's three banks looking to combine, rebrand
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2 comments:
It appears that this article is referencing one written by Jen Wilson for Charlotte Business Journal, which erroneously reported a loss of $241,000. In response to that article, Mr. Dick stated the following:
"Uwharrie Capital Corp had one of our most profitable years in 2012, but chose for strategic reasons to write off things like Goodwill and took aggressive write-downs on Other Real Estate Owned as a precursor to our consolidation. Net After-Tax Earnings for 2012 were $400,000 vs. $900,000 in 2011 – positive numbers in both years when many banks are reporting losses. Earnings Available to Common Shareholders reflect results after the payments of dividends on our preferred stock. In 2012, they were a negative as you reported, but you also reported earnings as only $225,000 in 2011. Again, this was after payment of preferred dividends."
Regardless, it appears to be a good move for a locally owned bank in adjusting to the changing economic landscape.
TFE, the $241,000 loss figure comes from the 8-K filed with the Securities and Exchange Commission on March 14.
At the Observer, our policy on earnings reports is to use net income available to common shareholders as our baseline profitability figure.
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