The Biz: Two new banks set up shop in WNC

New businesses start up in Asheville and throughout Western North Carolina on virtually a daily basis. But when it comes to new banks? That’s typically a much rarer event, thanks to a host of issues—primarily regulatory hurdles, market demands and the fact that banks have to raise millions of dollars in capital funding before they can even open their doors.

However, Asheville recently became home to two new state-chartered banks: Pisgah Community Bank (proposed), with temporary headquarters at 900 Hendersonville Road, and Forest Commercial Bank (proposed), which is based downtown at 1 North Pack Square.

(By the way, The Biz knows what you’re probably thinking: What’s up with that clunky “proposed” thing? It’s simply a legalism required of a new bank by the Federal Deposit Insurance Corporation until the bank is approved to offer FDIC-insured consumer deposits; pay it no mind.)

These days, in addition to the above-mentioned hurdles, the opening of two banks at the same time in the same small town is something rather remarkable. The reason: These are simply not good times for banks. The U.S. banking system is currently suffering from a pernicious liquidity crisis and credit crunch. The problems are due primarily to the meltdown in the subprime mortgage market, whose flailing tentacles are now even stinging banks and credit markets globally.

“I think we are in a down cycle, that’s for sure,” says John Kimberly, the president and one of the organizers of Forest Commercial Bank (, slated to fully open in January. “But I think the attractiveness of this area has not and will not go away. We’re still going to enjoy the steady growth we’ve enjoyed over the years and if you look at bank deposits in this area, they’ve grown at a healthy and steady pace in the last few years and I think they will continue to do so. I do think there will be an obvious impact on maybe real-estate-lending opportunities … but the advantage is we’re going to be starting off day one with a clean balance sheet and no problem assets to be distracted by.

(Pisgah’s president and spokesman, Ted Durham, was not available for comment on this story.)

In addition to Kimberly, who most recently served as Asheville-market president for SunTrust Bank, Forest has several heavy hitters lined up behind it. Among the bank’s organizers are former Asheville mayor Lou Bissette, Black Mountain mayor and retired banker Carl Bartlett, Asheville attorney Eugene Ellison, Morganton businessman Mike Fullenweider, insurance executive Bill White of Black Mountain, construction company executive Mark Vannoy of Jefferson, Jerry Grant of Asheville’s Beverly-Grant Construction Co., Sue McClinton of Asheville, a director of the Wm. S. Hien Co., a legal-publishing company, and Allen Rogers of Ewing Capital Partners in Charlotte.

The bank’s stock offering was officially closed on Aug. 31, ending with a capitalization from investors totaling $20,000,200. “In fact, we were oversubscribed and had to turn some [investors] away, which is a good problem to have,” says Kimberly.

While the bank is not yet accepting customer deposits pending FDIC approval, it has begun building its loan portfolio through an arrangement with two out-of-market correspondent banks and already has more than $8 million in loans closed or in the pipeline, Kimberly says.

The bank’s market will be all of Western North Carolina, with a primary focus on Buncombe and Henderson counties. “To the extent we can get in our car and go see somebody and do business, we’re going to do that,” says Kimberly. In the future, the bank might consider expanding its reach into South Carolina and Tennessee, he notes.

While Forest will compete largely with the area’s other community banks, it will take a novel approach, at least for Western North Carolina. Unlike other banks, Forest will not pursue a traditional branching strategy. Rather, it will operate out of a single downtown location, combining conventional approaches such as courier service with the cutting-edge technology of “remote deposit” to take the bank to its customers.

The area has several banks that cater to businesses, “but where I think we’ll differ substantially is on delivery,” Kimberly says. “We view our model as that of a regional business bank that is going to be taking advantage of the latest technology that’s available. For instance, sophisticated online-banking packages that will allow our customers to do almost everything from their office. We’ll also take advantage of remote-deposit capture technology, which essentially allows clients to make deposits without ever having to come to the bank.”

Kimberly adds: “We’ll be offering all types of lending services, primarily focused on small- and medium-sized companies, with a focus on companies with revenues under $30 million. If you think about what drives our economy, I believe our business model is a perfect fit for it. There just aren’t that many [large businesses]. There’s Ingles and Mission Hospitals and everybody else is pretty much a small business.”

The bank also will provide all manner of commercial-real-estate financing as well as residential-construction and land-development lending. “We’ll also provide personal services, but we see that on a more limited basis,” Kimberly says. He anticipates that officers, shareholders and the business owners and their family members will use the bank for consumer-banking services. But the bank does not expect just anyone off the street to become a customer, even though it will be open to the general public for personal banking services and loans.

“Obviously working out of one location on the third floor of the Biltmore Building downtown, we’re not going to be the most convenient consumer bank,” Kimberly says. “But we do intend to provide services [to general consumers], including home-equity lines, personal checking accounts, and savings accounts. I don’t know that I would be the best place for you, but you’d certainly be able to do business with us if you wanted to. … Our office here on the third floor is set up to do everything a traditional bank can do, I’m just not on the busiest street corner.”

This Cat’s roaring: Asheville’s own Crispy Cat Candy Bars has been voted “Company of the Year” for 2007 by VegNews magazine of San Francisco, which features the company in its Nov./Dec. issue. All in all, it’s been a good year for the company, officials purr.

In October, United Natural Foods, the largest natural-food distributor in the United States, started carrying Crispy Cat in all seven of its warehouses in the eastern half of the nation. United Naturals’ four western warehouses have slated February 2008 as its launch date for Crispy Cat on the West Coast. The Whole Foods Northwest region (23 stores) will launch Crispy Cat in conjunction with UNFI’s February 2008 release. And, SunOpta, a major natural-food distributor in Canada, has elected to distribute Crispy Cat nationally north of the border.

HUB gets rolling: The Asheville HUB Project announced Nov. 5 that the Asheville Climate Initiative, the HUB’s initial project, is preparing to fly on its own. The climate initiative, henceforth to be known as the Centers for Environmental and Climatic Interaction, hosted a coming-out event at the Grove Park Inn demonstrating Asheville’s climate assets to energy, insurance and transportation executives who were in town for a separate conference convened by the National Oceanic and Atmospheric Administration. CECI showed the audience how Asheville businesses and other organizations can address their climate services needs.

HUB officials say CECI is building upon Western North Carolina’s heritage in national-climate analysis, its biodiversity and its digital-arts expertise to turn climatic data into services that provide decision-makers in many sectors with information that will enable them to respond to and mitigate climate change. CECI is led by George Briggs, who also serves as executive director of the North Carolina Arboretum. CECI is seeking 501(c)(3) status as a precursor to pursuing a fundraising campaign in partnership with the Asheville HUB; much of its early focus will be on securing federal and state grants, and on building collaborative partnerships with agencies, organizations and businesses.

The jewel in Asheville’s growing climate-services community is NOAA’s National Climatic Data Center, which provides access to and stewardship of the world’s largest collection of environmental data. Other assets include the Arboretum, the National Environmental Modeling and Analysis Center and the Renaissance Computing Institute at UNCA, the Media Arts Project, the U.S. Forest Service’s Southern Research Station and private technology companies. Further, Asheville lays claim to 10 of the approximately 2,000 scientists and other experts who were recently awarded the Nobel Peace Prize for their work on the Intergovernmental Panel on Climate Change. (For more on the initiative, see “About that Climate Change Business …” on page 22.)


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