HomeTrust Banking Partnership has gained regulatory approval to become a publicly held banking institution, signaling yet another change in the region's banking sector. The bank's headquarters, pictured here, are ain downtown Asheville. Katie Bailey/Carolina Public Press

Expert: Region poised for more banking changes

More changes are in the works in the region’s banking sector as Asheville-based HomeTrust Banking Partnership, which encompasses seven North Carolina community bank divisions, becomes a shareholder-owned bank.

On May 14, the HomeTrust Banking Partnership was granted federal regulatory approval to proceed with its plan of conversion from being a federally chartered mutual savings bank to becoming a stockholder-owned bank.

The community stock offering period is expected to end June 21; the HomeTrust Banking Partnership, however, could extend the community stock offering until Aug. 3.

The HomeTrust Banking Partnership has a presence through its partner banks in Buncombe, Haywood, Henderson, Polk and Rutherford counties. The HomeTrust Banking Partnership’s roots are in HomeTrust Bank, which was founded in Clyde in 1926.

The HomeTrust Banking Partnership conversion represents yet another recent change in the Western North Carolina bank sector.

The parent company of Southern Community Bank and Trust, which has had a presence in Western North Carolina since March 2007, is in the process of being bought by Miami-based Capital Bank Financial Corp.

In October 2011, Asheville Savings Bank completed its conversion from being a mutual bank to being a chartered stock savings bank with shares trading on the Nasdaq Global Market under the symbol ASBB.

Also last year, the Federal Deposit Insurance Corporation took over two Asheville-based banks. On Jan. 21, 2011, the FDIC seized the Bank of Asheville and transferred the bank’s deposit accounts to First Bank in Troy. The FDIC then shuttered Asheville-based Blue Ridge Savings Bank on Oct. 14, 2011 and moved all of its deposit accounts, including brokered deposits, to the Bank of North Carolina in Thomasville.

Western North Carolina is poised for even more changes in its banking scene, according to Ken Flynt, the associate dean of Western Carolina University’s College of Business.

“We’re going to see more consolidation because not everyone’s well-capitalized,” Flynt said.

Banking today is all about going back to fundamentals, he said.

“At a time when there’s more uncertainty than there was in the Great Depression, you must have a bucket of capital,” he said. “It really is all about capital, and always should be.”

Raising more capital for its long-term financial growth and to support its strategic goal of adding more bank partners is a reason HomeTrust Banking Partnership is going public, said Dana Stonestreet, president and chief operating officer of HomeTrust Bank.

“Capital is the most important thing in banking from a news standpoint and a regulatory standpoint,” Stonestreet said.

According to its financial prospectus about the plan of conversion, HomeTrust Banking Partnership is offering close to 21.2 million shares of common stock for sale to the public at $10 per share. The stock is expected to be traded on the Nasdaq Global Market under the symbol HTBI.

The HomeTrust Banking Partnership’s 20 banking offices are in Western North Carolina and the Piedmont. The HomeTrust Banking Partnership consists of HomeTrust Bank, Tryon Federal Bank, Rutherford County Bank, Shelby Savings Bank, Home Savings Bank of Eden, Industrial Federal Bank of Lexington and Cherryville Federal Bank.

For the past 15 years, HomeTrust Banking Partnership has strategically partnered with other mutual banks, Stonestreet said. Once it becomes a stock bank, he said HomeTrust Banking Partnership will look for opportunities to partner with other shareholder-owned banks.

“This additional capital will be key for our strategy to be here another 86 years for our customers and communities,” he said.

Advice for consumers

Nationally, Flynt said, “we’ve not had a series of events like we’ve had over the past four to five years. There’s been such a huge diminishment of capital and a high degree of financial stresses which lead to the diminishment of capital.”

Flynt, who has been involved with the business of banking since 1972, said it’s “not just the mortgage debacle but all kinds of problems.”

“In the end, a financial business is all about being able to evaluate risk,” he said. “You try to price capital to the risk you receive. At the end of the day, if you make mistakes in any or all of these, there’s trouble.”

Consumers can see if their financial institutions have strong capital positions, Flynt said, by getting information from various regulatory agencies, such as the FDIC.

“You want a bank that shows a reduction in their problem loans over the past two to three years,” he said. “And you want to look at a bank that, in that same vein, has had improved its earnings. It’s time for banks to have cleaned up their problems.”

Learn more about your bank

Online sources of data and analytical information about banks’ assets, regulatory actions they may be facing and more include the following:

  • The Federal Deposit Insurance Corporation, or FDIC, is the primary federal regulator responsible for overseeing supervises state-chartered banks that are not members of the Federal Reserve System and state-chartered savings associations. The FDIC also insures consumers’ deposits in banks and savings associations in the event that a bank fails.
  • The Federal Reserve Board, or FRB, is the main federal regulator of state-chartered commercial banks that are members of the Federal Reserve System. The FRB also has a section on its site called Federal Reserve Consumer Help.
  • The Office of the Comptroller of the Currency, or OCC, regulates nationally chartered commercial banks and federal savings associations are chartered and regulated by the Office of the Comptroller of the Currency. The OCC also has section of its site called Answers and Solutions for Customers of National Banks.
  • The Federal Financial Institutions Examination Council’s Consumer Help Center directs consumers with complaints and questions about their bank or financial institution to the appropriate federal bank regulatory agency that can help them with their concerns.
  • The National Credit Union Administration supervises and insures federal credit unions and insures state-chartered credit unions.
  • The Conference of State Bank Supervisors, or CSBS, is the professional association of state officials responsible for chartering, regulating and supervising the nation’s state-chartered banks and state-licensed branches and agencies of foreign banks. State banks also are supervised by state banking regulators. The CSBS web site also has links to state banking departments.
  • BankTracker is an online American University School of Communication Investigative Reporting Workshop project produced in partnership with MSNBC.com. In addition to news stories about the state of the banking industry, BankTracker features searchable databases that have information about specific banks’ financials, failed banks, and bank holding companies and other firms that have received money through the U.S. Dept. of the Treasury’s Troubled Asset Relief Program (TARP).

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Kathleen O'Nan is a contributing reporter to Carolina Public Press.

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