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August 2008
Rock-Solid
By Casey Jacobus

     Founded in 1906 in the small town of Granite Falls, Bank of Granite has served small communities in the western half of North Carolina for over 100 years. In an industry where big appears to equal better, and community banks are often acquired by larger institutions, Bank of Granite has maintained its independence, built a solid reputation, and developed a personal relationship with its stockholders and customers.

     Strong leadership has been a hallmark of Bank of Granite’s success. In 1954, John Forlines Jr. joined the bank as president and chairman of the board of directors. At that time, the bank had only one office and total resources were just over $1 million. It was almost the smallest bank in the state—ranking 223 out of 225. Forlines was a remarkable man whose leadership and vision over the next 50 years turned Bank of Granite into one of the state’s best-known, most profitable and strongest community banks.

     Forlines orchestrated Bank of Granite’s first expansion into Lenoir in 1960, setting the stage for the bank’s future expansion. In 1969 the original Granite Falls office was relocated to its modern Main Street facility. The next year Bank of Granite opened its first Hickory office. In 1984 Forlines oversaw the first public underwriting of the bank’s stock. The bank would post record earnings for the next 62 straight quarters.

     Forlines also served the region and the state as president of the North Carolina Bankers Association, chairman of the State Community College Board, chairman of Caldwell Community College and Technical Institute, and a member of the board of trustees for Duke University.

     In 1982, Forlines made perhaps the bank’s best acquisition of all time when he persuaded longtime competitor and friend Charles Snipes to join Bank of Granite as executive vice president and chief administrative officer. A senior vice president of First Union National Bank when First National and First Union merged, Snipes was on the brink of starting his own bank when Forlines convinced him to join Bank of Granite instead. Over the next 24 years, the two leaders grew the bank to over $1 billion in assets together. In January 2006, Forlines retired after 52 years with the bank and Snipes was named chairman of the board.

     This year marked another change in leadership at the Bank of Granite, only the third in over a half-century. Snipes, who turned 75 in May, retired in January and Scott Anderson, who joined the bank as executive vice president and chief operating officer in May of 2004, took over as CEO. It was a move that had been planned from the day Anderson was hired.

     “Scott has proven himself to be a dynamic, capable and effective leader,” Snipes told the board of directors at their January 2008 meeting. “He will be a fine steward of our future growth and success and up to the challenge of leading this bank.”

 

Solid Experience

     With 30 years of banking experience behind him, Scott Anderson is well prepared to take hold of the reigns of leadership at Bank of Granite. Anderson grew up in Charlotte, graduating from East Mecklenburg High School in 1973. He earned his Bachelor of Arts in 1977 from University of North Carolina at Chapel Hill and in 1983 his Master of Business Administration from University of North Carolina at Greensboro. He is also a graduate of the American Bankers Association Stonier Graduate School of Banking at University of Pennsylvania in Philadelphia.

     Anderson started banking at the bottom. His first job after graduating from Chapel Hill was collecting past-due loans for Forsyth Bank and Trust Company in Winston-Salem. Anderson found he enjoyed working at a successful community bank under a young, dynamic CEO.

     “It was a very positive experience,” he remembers. “The employees enjoyed working there; everyone was involved emotionally and that leads to satisfied customers. That is what a community bank is all about.”

     When Southern National Bank acquired Forsyth Bank and Trust in 1982, Anderson moved to Charlotte where he spent 10 years ultimately managing 10 offices for the commercial loan team. He also served as city executive in Charleston, S.C., and later in Raleigh.

     When Southern National merged with BB&T, Anderson became city executive in Durham. In 1997, he returned to Charlotte as president and CEO of Bank of Mecklenburg, a wholly owned subsidiary of Triangle Bank & Trust Company. When Centura Bank bought Triangle, he went to their headquarters in Rocky Mount as a regional president, responsible for central eastern North Carolina. One year later, in 2002, the Royal Bank of Canada acquired Centura. Anderson then held several positions with the RBC Centura before joining Bank of Granite in 2004.

     After making a lot of moves to stay in the game, Anderson, now 52 years old, plans to remain at Bank of Granite until retirement. Awed by following the two men who have provided leadership to the bank for so long and who are so closely identified with the bank across the state, he is excited about the future.

     “I’m honored by the confidence that Charles and the board have placed in me,” says Anderson. “It’s humbling to be named leader of this 101-year-old community bank. My commitment to our shareholders, customers and employees is to ensure that our legacy of being ‘as solid as our name’ continues.”

 

A Rock and a Hard Place

     Anderson takes over leadership at Bank of Granite at a difficult economic time. The textile and furniture industries that have long supported the economy of the Catawba Valley region are suffering. The real estate market is in decline. Competition is strong, not only from the mega banks, but also from non-bank competitors—credit card companies, car dealerships, etc.

     “The banking industry is under siege,” says Anderson. “But we have to believe this is a down cycle that we will weather as we have others.”

     Anderson has not wasted any time in making changes that he believes will help the bank to not only survive the down cycle, but to move forward. With an eye towards building a new management team, he has organized the bank into three parts—the Catawba, mountain and metro regions—and named three senior bankers to head each one.

     Under the new structure, Sammy Black manages the bank’s metro region, which includes the bank’s six offices in Charlotte, Statesville and Winston-Salem. Earl Searcy manages the mountain region, which includes nine offices in Burke, Caldwell, Watauga and Wilkes Counties. And W.C. Upchurch manages Bank of Granite’s seven offices in Catawba County.

     “They each own their region; they’re responsible for it,” says Anderson. “It makes sense; they know their market; they live there.”

     In addition to decentralizing decision-making, Anderson has taken steps to plug bank losses from problem loans, which increased in the second and third quarters of 2007. Since most of those loans are with longtime clients of the bank in the Hickory area who have fallen on hard times, the bank has made every effort to help those customers as long as it could.

     The bank has restructured its lending staff, reassigned portfolio responsibilities and added resources to its credit staff as part of a remediation plan to fix the problems. The bank has also created a special-assets recovery group to exclusively handle problem loans and work toward recovering money from clients in default. In the past, it did not have a group dedicated to handling these tasks.

     Anderson hopes to see the bank expand by building new offices or acquiring another small bank, particularly in the area between Winston-Salem and Raleigh. Bank of Granite entered the Charlotte market in 2003 with its purchase of First Commerce Corp. It now has four offices in Mecklenburg County and another in Statesville. Expansion into growth markets could help to balance the decline in the economy of the Hickory region.

 

Solid Service

     Bank of Granite has a proud legacy. It had its beginning in 1906 when transportation was either by foot or horse and buggy. A group of Granite Falls residents, tired of traveling what was then a considerable distance to Hickory or Lenoir, invested $8,000 and obtained a charter to organize Bank of Granite. When the bank opened, Ms. Lula Hickman, a Sunday school teacher, was first in line to make a deposit. The bank’s deposits equaled $901.68 on that first day.

     While the times and technology may have changed since 1906, Bank of Granite’s commitment to customer service, community and helping neighbors remains deeply embedded in its tradition and culture.

     “As a community bank, Bank of Granite is well known for its responsiveness,” says Anderson. “We are able to customize solutions to meet the needs of our customers.”

Bank of Granite has received numerous accolades throughout its history. In 1996, it caught the attention of famed investor Warren Buffet, who called it “the best run bank in the United States.” U.S. Banker magazine shared Buffet’s opinion.

     Bill Staton, chairman of The Staton Institute, studied a group of 400 publicly traded companies in his book “America’s Finest Companies” and said, “taking care of business and sticking to what it knows best has made Bank of Granite the most profitable bank in the country.” Forbes magazine, called it “the best little bank in America.”

     In 2005, Bank of Granite received the Small Business Association’s Community Bank of the Year Award for North Carolina.

     North Carolina is one of the most concentrated banking markets in the U.S., home to Bank of America Corporation, Wachovia Corporation, and BB&T Corporation. In his 30 years in banking, Anderson has witnessed the waves of consolidation that have transformed the industry. Throughout that time, Bank of Granite has been a rock of stability; surviving amidst the predatory mega banks, building a solid reputation based on better service and thriving under top-notched leadership. Now, at a time when it is a challenge to proclaim any good news in any financial quarter, Anderson will help write the bank’s future history. He is confident that it will be equally successful to its past.

     “We’re proud of our legacy and our history of profitability,” Anderson asserts. “We have a great base of shareholders, most of whom are depositors. We have a great management team, all of whom have vast banking experience, but are in their early to mid-50s. We’re poised to keep the bank growing.”

Casey Jacobus is a Lake Norman-based freelance writer.
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