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September 2010
Relationship Banking
By Ellison Clary

     The blue, green and white signage on North Tryon Street proclaims the 30-story tower as Fifth Third Center. It’s an imposing presence for the Cincinnati-based bank, right in the heart of Charlotte’s financial district.

     Fifth Third took possession of floors 16, 17 and 18 in late May. Its 72,000 square feet accommodate 260 associates and the bank has options to take additional space in the building as needed.

     “Being headquartered in uptown has exceeded our expectations,” says Bob James, president and chief executive of Fifth Third’s North Carolina affiliate. “We knew it would be exciting to be in the center of the central business district. All our teammates are energized and happy to be here.”

     Speaking from a conference room with a sweeping view of Fourth Ward, James is in a sweet spot he’s long sought for a corporate headquarters location.

     When he joined Fifth Third legacy institution First Charter in 1999, the community bank’s employees were split between five buildings in Concord. In 2001, First Charter consolidated those locations into a new 230,000 square foot headquarters in University Research Park.

     The multi-level building was first-class, but hidden from major thoroughfares. When James took over as chief executive in 2005, he started searching for a new location with a high-profile presence.

“The strong recommendation from Charlotte’s business leaders was, if you want to be considered a major player, you’ve got to be uptown,” James says.

     Swedish appliance maker Electrolux chose the former First Charter facility for its North American headquarters in December 2009, giving Fifth Third six months to relocate. By then, First Charter had merged with Fifth Third, and the new owners also supported a move to uptown.

     Bank of America was consolidating functions, so space was available at 201 North Tryon Street in the tower once called IJL Financial Center.

     “It was non-negotiable that the building had to be named Fifth Third Center,” James says. He was “somewhat surprised” when landlord Bank of America told him that wasn’t an issue. He applauds leadership there for seeing his bank’s presence in uptown as good for Charlotte.

     “Being located in uptown has its advantages,” James says. “You can walk to lunch and run into bank customers as well as corporate and community leaders. It definitely raises our profile in the business community.”

     A long-time member of the bank’s NC board is Dr. Jerry McGee, president of Wingate University. He, too, enjoys the prominent location.

     “You do feel a lot of pride when you travel Tryon Street with all the great banks and you see our bank there with them,” McGee says.

     McGee also praises James as a “terrific leader” who delivers strong direction in bad times as well as good.

 

‘We Never Stopped Lending’

     James speaks enthusiastically about lending, a topic dear to him.

     “The general statement, ‘banks aren’t lending,’ is purely not true,” James says with conviction. “In our company, we make more money from lending than we do from fee income. Loaning money is a key to our success and the success of the communities we serve.”

     Mortgage loans soared as homeowners refinanced in 2009, he says. “We’ve expanded our mortgage team in North Carolina from 22 originators to 35, and we’ll grow that even more.”

     Consumers are also buying cars now and Fifth Third’s auto loan business has increased substantially in North Carolina, he says.

     “The one area we’re not currently active in is residential real estate construction,” James says, calling that market saturated.

     In contrast, he says, “We’re trying to make all the good small business loans we can.”

     Fifth Third has hired a Small Business Administration lender in Raleigh and is seeking one for Charlotte. Late last year, an open house in Charlotte for small business banking applicants attracted 280, and Fifth Third hired two dozen.

     “The slowdown has been in business owners’ reluctance to borrow,” James says. “We’ve seen them use more of their own cash. They’re not upgrading equipment, technology, things that typically lead to borrowing. Even the healthy businesses are playing wait-and-see.”

     James acknowledges some loosening lately, as firms use lines of credit a bit more. And expansion plans seem to be gaining momentum.

 

Fifth Third Takes Holistic Approach

     His message to business people: “When the time comes to buy new equipment or expand, we would very much like to talk to you – not just about your borrowing needs but also your merchant processing, capital markets and treasury needs.

     “We approach companies in a holistic manner,” James continues. “We ask questions to learn about the challenges our clients are facing. We work as a partner to find ways to help them grow and be successful long term. We get involved with their employees and senior executives to help them better manage their financial needs. We’re a relationship bank.”

     Those are ways Fifth Third distinguishes itself, says James.

     “Unlike some banks, we’re not organized along lines of business operating in silos,” James explains. “We are organized geographically so we can keep the decision-making as close to the market and as close to the customer as possible.

     “By having me here in Charlotte as president, along with a local management team, we can better serve the North Carolina market’s unique needs and react quickly to provide solutions for our clients. We have the freedom and the authority to make local decisions and, as a result, we provide the attentive, personal service that is usually associated with a community bank.”

     At 59, James’ roots go deep in community banking. He grew up in Murfreesboro, NC, the son of a retail business owner. He always liked business, and earned a Business Administration degree from the University of North Carolina at Chapel Hill in 1973.

     He initially worked in Atlanta for Trust Company of Georgia, now SunTrust. The bright lights didn’t impress him and he sorely missed North Carolina’s three B’s, “basketball, beaches and barbecue.” So, after a year, he returned to the Tar Heel state to work for Planters Bank in Rocky Mount. Through a merger, that bank became Centura.

     Influencing James greatly as he climbed the Centura ranks was Overton “Buck” Suiter, who ran much of the bank’s branch network. Suiter taught him about dealing with all types of customers.

     “He could roll up his sleeves and go out and talk to a farmer,” James says, “and the next day he could drive to Raleigh and have dinner with the governor.”

 

Recommendation: Find A Partner

     First Charter had about $2 billion in assets when James joined in 1999. James took the helm as chief executive in 2005 and in 2007 recommended to his board that the bank, which had grown to $5 billion in assets, find a larger partner to merge with.

     “We were at a size where we really needed to start calling on middle market companies,” James says. “We didn’t have the technology or the products to do that. It was also important to expand our retail branch network to increase market share. Due to our size, we didn’t have the resources necessary to expand as quickly as we wanted.”

     First Charter fielded strong interest from several sources. Hugh McColl Jr., former chief executive for Bank of America, facilitated a connection between James and Fifth Third.

     The Cincinnati bank won out for reasons besides the $1.1 billion price. “They were not in the North Carolina market and were attracted by the vibrant business climate and growth potential,” James explains. “As a result, Fifth Third was willing to invest in the resources necessary to grow their presence in North Carolina rather than needing to close branches and reduce expenses.”

     James also liked the way Fifth Third segments its lines of business. He lists the major lines as mortgage, retail banking, business banking, middle market and private banking.

     The small business segment focuses on companies with $1 million to $3 million in revenue, business banking covers companies from $3 million to $25 million and middle market banking serves larger corporations with revenue over $25 million. Those are much smaller thresholds than used by what James refers to as “the trillionaire banks.”

     “We’ve got strong, experienced bankers calling on those companies,” James says. “A trillionaire bank may have younger, less-knowledgeable people calling on them.”

     James also takes pride in Fifth Third’s emphasis on community involvement and support for financial literacy. James and his team have adopted Wilson Middle School in the Charlotte-Mecklenburg Schools, regularly contributing both money and volunteer hours to help mentor students.

     In addition, May 3rd of each year is designated as “Fifth Third Day.” This year, James and the team celebrated by volunteering at 40 non-profits. With paid time off, they donated more than 1,000 volunteer hours in one week.

     James’ list of civic involvements runs long. He is on the board of The Charlotte Chamber, the Charlotte Symphony Orchestra, the North Carolina Chamber and the Harvey B. Gantt Center for African-American Arts and Culture. He is also a trustee of the Mint Museum of Craft + Design.

 

Growth Looms Large

 

     Growth for Fifth Third in North Carolina is nearly a certainty, feels affiliate board member Jewell Hoover. She retired from the Office of the Controller of the Currency and operates a bank consulting firm called Hoover and Associates, LLC, in Charlotte.

     Besides the broad array of Fifth Third products, Hoover cites James’ “deep relationships in the community and banking industry in both Charlotte and the entire state.” She also praises the “exceptional staff” he’s assembled.

     “Our vision is to be the essential Carolina bank,” James concludes. “What we mean by that is a trusted advisor for our clients, the preferred employer and an essential part of the communities in which we operate.”

 

      

 

 

 

Ellison Clary is a Charlotte-based freelance writer.
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