More Consolidation Coming to Regional Banks: Hill

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July 31 (Bloomberg) -- Robert Hill, Chief Executive Officer at South State Bank, discusses the pressures faced by regional banks, his firm’s acquisition strategy and how he views economic recovery in the United States. He speaks on “Market Makers.”

Conditions of the financial markets that you operate in, not the ones we see on wall street.

We have seen the southeast rebound.

You have seen it in unemployment numbers.

South carolina alone, the week before last had an announcement of 7000 new jobs in one day.

We have seen the consumer rebound as well.

Mortgage demand is way up, especially on the construction side.

We went through a lull.

We are seeing growth in our bank.

Can you afford to grow your bank and do business, given the demands on you from a regulatory perspective?

Morgan stanley can handle the demands, you may not have the capital to do so.

We have built our company by taking advantage of opportunities in the market that are caused by the bigger banks.

We hire teams of bankers from larger banks and that is how we build our company.

Ones who did not want to be in new york anymore?

We are in our markets, but we are with larger companies, who did not want the bureaucracy.

We have been able to attract them to a different culture and style.

Customers come with them.

The regulatory side is a hurdle for everyone.

We have tried to use it as an advantage for our company.

Mortgage is having a tough time implementing new mortgage rules and regulations.

We have been able to attract mortgage bankers over because it is easier for us to implement the regulation.

The fundamentals -- they can afford to hire 500 more compliance officers.

Do you feel the same pressure on lending margins as larger banks do?

It creates margin pressure for everybody.

From a regulatory standpoint, it is overhead.

That is the challenge.

In our market, there are about 350 banks, but only a handful our size or larger's. that includes bank of america and bb&t. very small banks, i do not see how they can hire people to handle the amount of regulations.

We are fortunate in our side and the mergers we have we are creating the efficiencies to stomach it.

Is there more consolidation coming?


We are going to get down in the 3500 range.

We are on a pace of doing two a pace of doing two year during the downturn.

We bought three failed banks.

We survived the great depression, did not survive the great recession.

What can you offer as a turnaround strategy.

Unfortunately, they have management teams that have led them astray.

They overreached on credit.

Our credit culture did not change a lot.

We did not lose money during the downturn.

Our shareholders have benefited.

Our stock is up about 105%. if you look at the s&p index, and is actually still down.

Most banks have not recovered.

Ours has not quite double, but we are on pace to do that.

The biggest acquisition you have done is valued at about $300 million.

What do you have your eyes on?

We are indigestion mode.

-- we are in digestion mode.

We had five different brands in three states, we brought them all together, rebranded as south state.

We were south carolina bank and trust before that.

What people see hourly, that is what they see.

Our next big hurdle is the $6 billion mark.

At $10 billion mark, you are considered a big bank.

Once we cross that mark, the cost to our country -- company is going to be between $10 million and $15 million.

We have to drive for our shareholders.

That might be a catalyst.

We are at eight.

As we get closer to 10, we would do an acquisition to take us past the $10 billion mark.

How would you rate the u.s. economic recovery?

We are probably in the seventh inning stretch.

That sounds good.

At least in the southeast.

I have been more encouraged.

If you take the second quarter, our loan growth was up 26%. the interesting thing was not the percentage growth.

It came in almost every segment.

That is the first time we have seen that.

Is that the only place you would like to be?

Would you think about expanding your footprint?

We like the southeast.

There are 350 banks.

There is a lot of consolidation.

What the large banks are focused on, we enjoy the charleston's and savannas of the world.

It creates a lot of value for us.

I like the southeast for the

This text has been automatically generated. It may not be 100% accurate.


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