The fledgling company headed by former RBC Bank CEO Scott Custer is poised to acquire a majority stake in a small Burlington bank and is on the prowl for other acquisitions.
The business strategy of Piedmont Community Bank Holdings is somewhat flexible, but the basic concept is to create a network of banks that can benefit from a centralized infrastructure - such as back-office operations and information technology systems, Custer said. The company is targeting the Carolinas and Virginia.
Piedmont will acquire some banks outright and will acquire a controlling interest in others, said Custer, 52, who retired as CEO of Raleigh-based RBC Bank in November.
"This is a chance to build something on my own," said Custer, who joined Piedmont at the end of December. "It speaks a little more to my entrepreneurial side."
With community banks having trouble raising new capital right now, companies such as Piedmont can fill the gap, said Tony Gaeta, a Raleigh banking attorney.
"I'd be very surprised if they're not terribly successful," he said.
Gaeta is working with a company formed by the former chairman and CEO of the corporate parent of Virginia-based Gateway Bank & Trust that has agreed to acquire Community Bank of Rowan in Salisbury and plans to buy other community banks once it obtains regulatory approval. Gaeta said it is conceivable such companies will drive up acquisition prices, but he doesn't anticipate a wave of "merger mania."
Piedmont announced Thursday that its application to become a bank holding company has been approved by the Federal Reserve.
Piedmont was formed last year by Triangle businessmen J. Adam Abram and Steven Lerner.
Abram, Piedmont's chairman, founded two insurance holding companies, James River Group and Front Royal, that sold for $572 million and $167 million, respectively.
Lerner, Piedmont's vice chairman, is the former chairman of research firm Yankelovich, which was sold to advertising giant WPP in 2008.
Piedmont agreed last summer to acquire a majority stake in Burlington's VantageSouth Bank by investing at least $6.85 million. VantageSouth has two branches in Burlington and a loan production office in Mebane.
According to filings with the Securities and Exchange Commission, Piedmont has raised $12 million from investors. Custer said investors have committed significantly more than that, but declined to say how much.
"The reality is, we know we have sufficient capital to execute our plan," he said.
Piedmont's investors include Lightyear Capital of New York and Stone Point Capital of New York and Connecticut, each of which has raised and invested billions of dollars.
Custer said he had other offers after he retired from RBC, but running Piedmont was the most attractive because it was a great business opportunity that enables him to leverage his banking expertise and contacts.
Custer engineered a turnaround of RBC Bank after he was named CEO of RBC Bank in October 2004. The bank expanded from 270 to more than 430branches on his watch, but acquisitions in Florida and Georgia hurt the bank when the recession pummeled the real estate markets in those states.
At Piedmont, Custer heads a three-employee team that is working out of temporary offices in Raleigh's North Hills. He expects the payroll to expand as the company bulks up with acquisitions.
In the meantime, he said, he has been acquiring a whole new set of skills.
"I can change toner cartridge in a printer," Custer said. "I've learned how to fax things on my own. I've learned how to operate a complicated copy machine. I've learned how to set up all my computer equipment. ... That's just part of starting up a small company."
