The National Bank Of South Carolina Business Information, Profile, and History

Company Perspectives:

Like most things that are built to last, your banking relationship wi th NBSC will tend to appreciate with age. For nearly 100 years, longe r than most banks have been in business, the thing that has set NBSC apart has been our strong customer relationships. We've helped busine sses and individuals in South Carolina Prosper in the good times and ride out the not-so-good times, when words like "trust" and "relation ship" really meant something. That's what makes NBSC the one bank wor th changing banks for.

History of The National Bank Of South Carolina

The National Bank of South Carolina, a subsidiary of Synovus Financia l Corporation, is a leading bank in South Carolina. Formed in the far ming town of Sumter in 1905, the bank focused on the Pee Dee region o f the state, in the northeastern corner, for its first several decade s. At the time of its 100th anniversary, NBSC was still building its presence in the state, buying a number of smaller banks and building new branches. The company operated fairly autonomously from its Colum bus, Georgia-based corporate parent.

Origins

The National Bank of South Carolina (NBSC) dates back to 1905. In tha t year, Farmers Bank and Trust was founded in the farm town of Sumter , South Carolina by C.G. Rowland. Rowland, a station agent for the At lantic Coastline Railroad, had been assigned to the area 18 years ear lier.

Originally operated from a grocery store, the bank moved into the for mer county courthouse in 1907. It was the only one of seven Sumter ba nks to survive the Great Depression. A branch was opened in the state capital of Columbia in 1965. In the early 1970s, assets were up to & #36;80 million and the company had nine branches centered on the Pee Dee area.

Takeover Target in the 1980s

The holding company NBSC Corporation was set up in 1983. The bank, th e seventh largest in South Carolina with deposits of $170 million , was already viewed as a takeover target as regulations were relaxed regarding banking acquisitions. NBSC had repulsed an offer from Gree nville, South Carolina-based Southern Bancorp Inc. in 1982, saying th e offer was too low. It was also discussing merger prospects with at least one other bank, Southern National Corp. of Lumberton, North Car olina, according to a later story in the News & Observer.

NBSC renewed its interest in selling after asking prices for banks be gan to fall later in the decade. Discussions with Southern National C orporation simmered until 1990, when the $3 billion bank, based i n Lumberton, North Carolina, made a serious bid to acquire NBSC, whic h had assets of $540 million. Southern National proposed an all-s tock deal worth $53 million. NBSC's retail emphasis was considere d complementary to Southern National's mainly corporate-centered busi ness. "This is a good fit for us," said NBSC chairman Marvin D. Trapp . Southern National had the deal approved by the NAACP--which had que stioned the bank's record of reinvesting in poor or minority communit ies--but called off the merger after a couple of months, citing "unex pected obstacles."

NBSC had pursued a few acquisitions of its own in the last half of th e 1980s, buying the $5 million Bank of Summerton and the larger L ake City State Bank, assets $51 million, which dated back to 1940 . It was also opening brand new offices in greater Columbia and Myrtl e Beach.

NBSC followed other banks in the region by relaxing its loan requirem ents and withdrawal penalties in the wake of Hurricane Hugo. The Octo ber 1989 storm affected all of the bank's branches, noted American Banker, including the main office in Sumter, 100 miles from shor e.

NBSC ended the 1980s as South Carolina's third largest bank. It had 2 8 offices in the state, total assets of $563 million, and about 4 50 employees.

Waking Up in the 1990s

Marvin D. Trapp, NBSC's CEO since 1973 and chairman since 1985, stepp ed down in 1991. He had first joined the company in 1963 as assistant vice-president for business development and advertising. Trapp's suc cessor was Robert V. Royall, Jr., formerly head of Citizens and South ern National Bank of South Carolina (C&S of SC) and C&S Corpo ration's vice-chairman. Royall was also chairman of the South Carolin a Ports Authority. He had left C&S after it merged with Sovran Fi nancial Corporation.

Royall immediately made sweeping changes at the "very, very sleepy ba nk." He hired a handful of executives from C&S and restated 1990 earnings, shifting $1 million of net profit to loan-loss reserves .

NBSC was venturing into the Upstate in 1993, opening offices in Spart anburg, Greenville, and Greer. The area was growing rapidly, spurred by BMW's new North American plant. NBSC had also opened a branch at t he other end of the state, Hilton Head Island, and had bought out cou ple of thrifts. By this time, it had branches in two dozen communitie s and assets of $974 million. NBSC Corporation also owned Sunsban k Life Insurance Company.

Another wave of consolidation was rolling over banks in the Carolinas , and though it was "the largest independent bank headquartered in So uth Carolina," this time NBSC would not escape this time without itse lf being taken over by a larger competitor. It was able, though, to p ut off the inevitable for a couple of years.

According to American Banker, NBSC was stealing customers from the large North Carolina banks (such as First Union Corporation, Nat ionsBank Corporation, and Wachovia Corporation) as they consolidated their Palmetto State acquisitions. "We set out from the very beginnin g to be the local bank," said one of Royall's early hires. "Our goal became one of stealing customers and selling our name. ... If we only sold rate, we'd lose every time."

Acquired by Synovus in 1995

Synovus Financial Corporation, based in Columbus, Georgia, acquired N BSC in February 1995 for stock worth $153 million, or twice NBSC' s book value. Synovus, which had assets of nearly $6 billion befo re the merger with NBSC, had gobbled up more than 30 banks in the pre vious ten years. It allowed them to remain relatively autonomous, how ever, and this would be the case with NBSC, which was allowed to keep its name and continued to refer to itself as a "community bank." The NBSC merger was Synovus' largest to date and marked its entry into t he South Carolina market.

An analyst told the Atlanta Journal-Constitution that NBSC had below average return on assets and very high overhead. NBSC was oper ating 43 branches at the time of the merger. Total assets topped $ ;1 billion.

William L. Pherigo, NBSC's president since 1991, was promoted to CEO in 1995. Robert Royall remained chairman. Pherigo was one of the many who followed Robert Royall to NBSC. Another, Fred L. Green, III, bec ame NBSC's CEO in 1997.

A good word from one of NBSC's influential friends raised questions i n 1999, at least among Democrats. Republican House Speaker David Wilk ins appeared in a newspaper ad for the bank that listed his credentia ls as both speaker of the House and member of NBSC's board of directo rs. According to state Democratic chairman Dick Harpootlian, this wen t against a state law barring public officials from using their posit ions to promote business interests. "He has disgraced his office and should resign," said Harpootlian, adding that Wilkins had supported l egislation favorable to the banking industry.

Synovus boosted its holdings in the Upstate by acquiring Spartanburg- based Carolina Southern Bank in 2000. Carolina Southern had been foun ded in 1989 and had four branches. Synovus lumped the new bank into N BSC, increasing NBSC's assets to more than $2 billion.

The National Bank of South Carolina celebrated its 100th anniversary in 2005. Assets had grown to $3.5 billion. It had a new president and CEO: Chuck Garnett, who was a C&S alumnus like his predecess ors.

Principal Competitors: BB&T Financial Corporation; First U nion Corporation; NationsBank Corporation; Wachovia Corporation.

Chronology

• Key Dates:
• 1905: Farmers Bank and Trust launched in Sumter, South Carolin a.
• 1965: Branch established in Columbia.
• 1983: NBSC Corporation holding company is formed.
• 1985: The Bank of Summerton acquired.
• 1986: Assets are $350 million; company files public stock offering.
• 1988: New offices built in Irmo, Myrtle Beach; Lake City State Bank acquired.
• 1992: Branches opened in Camden, Florence, and Mount Pleasant; First Trident S&L acquired.
• 1993: Offices open in Upstate, Hilton Head Island.
• 1995: Synovus Financial Corporation acquires NBSC in deal wort h $153 million.
• 2000: Carolina Southern merged with NBSC.
• 2005: At time of 100th anniversary, NBSC has assets of $3. 5 billion.