Beacon Community Bank was officially granted a bank charter from the South Carolina Board of Financial Institutions and deposit insurance from the FDIC. The bank opened this morning at its permanent location at 578 East Bay Street in downtown Charleston, SC. The chairman of the board is Tommy Baker, a well-known auto dealer in Charleston. Baker sold his last bank, Southcoast Community Bank, to BNC. The CEO, Brooks Melton, has been a banker for over 20 years in Charleston and Charlotte.
As documented on this blog, two of my other de novo investments were acquired in the last year: Bank of Napa was acquired by Bank of Marin, and Patriot Federal Bank was acquired by Kinderhook Bank Corp. I decided to invest in Beacon Community Bank because I feel it has several attributes that should make it successful:
- The management and board has a track record of success. Board members include owners of large car dealerships, restaurant companies, and real estate developers in Charleston. Investors include other prominent Charlestonians. These are the type of people that have relationships that can lead to deposits and loans. Tommy Baker has started and sold banks before.
- The Charleston, South Carolina, market is growing like a weed. Charleston has become a popular place for college graduates, young families, and retirees coming north from Florida. Beacon is the first de novo in Charleston in the last 10 years, so many of the investors in Beacon have not had the opportunity to invest or bring deposits to any local de novo banks in a long time.
- Management seems competent and is not going all in on real estate development. Some of the de novo banks that have had the most problems made the mistake of being too heavily concentrated in loans to real estate developers and homebuilders that were building houses on the outskirts and exurbs of big markets like Atlanta or Riverside, CA. When I have spoken to Brooks Melton, he seems to be very aware of this.
Now that the bank’s doors are open, it will be interesting to start receiving quarterly statements on the bank’s performance and growth.