January 28, 2003

For information, contact

First Citizens Bank
Janice C. Burt
Phone: (803) 931-8539
Fax: (803) 312-8850

First Citizens focuses on Georgia Banks

Buying two small Georgia banks seems like small potatoes after recent mega-mergers nationwide, but it's a sea change for First Citizens Bancorp. of S.C. First Citizens in September bought CB Financial of Warrenton, Ga., and in February will complete its purchase of First Banks Inc. of Carnesville, Ga. The deals, the first for First Citizens outside of South Carolina, mark a significant strategic shift for the Columbia-based bank company. "First Citizens has its eye on 29 different counties in Georgia, markets we've identified as ones we're possibly interested in," chief executive Jim Apple said. First Citizens, S.C.'s second-largest state-based bank company after The South Financial Group, is looking at the eastern half of Georgia, from Tennessee to Florida. The plan will take at least 10 years to realize, and market targets are not set in stone, Apple said. First Citizens is attracted to the similarities between the markets in South Carolina and those in eastern Georgia. "There is a connectivity in the markets that makes them a good fit for us," Apple said. The company has tapped mortgage director Toby Goodlett to head the integration. He will move from Columbia to northeastern Georgia to help bring new banks into the First Citizens' fold and scout potential buyouts. "This is critical, because it's our first time taking our brand out of state," said Goodlett, 35. "This is an opportunity to showcase our customer-focused approach to banking." Goodlett said merging First Citizens' culture with those of eastern Georgia banks should go relatively smoothly. "Their customers look like our customers, their employees look like our employees, and their branches look like our branches," he said.


With its purchases, First Citizens is believed to be the first S.C. bank ever to move into Georgia. Joe Brannen, president of the Georgia Bankers Association, said he couldn't think of a large out-of-state bank that had come into Georgia and concentrated on the less-urban markets. Brannen has talked with First Citizens' executives and said he believes the company's Peach State plan is a winner. "They're looking at markets similar to the ones they serve in S.C., the banks they've acquired are good banks and, I understand, they will continue to operate those banks as they have been operated in the past," he said. "The secret is to keep doing what they've been doing in S.C." Despite similarities between the two states, there is at least one key difference. Banking laws until recently differed in the two states, resulting in markedly different environments. S.C. for decades has let banks open branches anywhere in the state, but until the mid-1990s Georgia made it difficult for a bank to cross county lines. As a result, nearly all of Georgia's 156 counties have a bank or thrift, sometimes both. So while South Carolina has nearly 100 banks statewide, Georgia has nearly 350. That means more opportunities for taking over banks, but the growth can be a tedious process, considering the number of one- and two-branch banks dotting the Georgia landscape. That's OK with First Citizens, president Peter Bristow said. "We've got 145 offices in S.C., so we're very retail heavy in terms of bricks and mortar," he said. "Our plan for Georgia is a natural extension of what we're doing in S.C. "Someone else might think that market is unattractive because there's so many smaller banks, but it fits with the way we do things," Bristow added.


With the advent of interstate banking in 1986, banks found it quicker to grow by merging with rivals than by growing deposits. The mergers reached their zenith with the recent nationwide mergers of Wachovia with First Union, and NationsBank with BankAmerica. First Citizens' move is as much the result the maturation of S.C.'s market as new opportunities in Georgia. In South Carolina, in-state banks were rapidly bought by out-of-state institutions, especially NCNB (now Bank of America); First Union; Wachovia; and BB&T. First Citizens and Carolina First also made numerous Palmetto State deals. As a result, the number of S.C. banks still available for purchase is limited. "Once the acquisition pace slowed down in South Carolina, we began looking at other ways to grow," Apple said. Atlanta, home of the nation's 11th largest metro area in 2000, doesn't figure into First Citizens' plans, said Apple, who estimated he'd need 50 branches to adequately cover the metropolitan region. Competition is fierce in the Atlanta area, which is served by more than 100 different institutions, including Atlantic States Bank, owned by First Citizens BancShares of Raleigh, N.C. First Citizens of N.C. is unrelated to Columbia's First Citizens, but largely owned by the same North Carolina family. Both are closely held public companies. First Citizens of N.C. is more focused on the Atlanta area in Georgia, but First Citizens of S.C. is prepared to do battle with its cousin should the two ever lock horns. First Citizens of S.C.'s target areas in Georgia aren't anything like Atlanta, but many of the communities could see strong growth as people move out from Georgia's dominant city. "There's just one county between where we're going and what's considered the metro Atlanta area," Bristow said. "Toccoa, for example, is good because of what's going on along Interstate-85 between Atlanta and Greenville. "Growth is headed out that way, and we're positioning ourselves to take advantage of that," he added.

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