Executives at a proposed Georgia de novo see a beeline toward profitability and growth by joining an out-of-state bank in lieu of starting anew.
The proposed Georgia Skyline Bank, which obtained conditional deposit insurance approval in December and was projected to launch this year, will instead join and recapitalize Highlands Community Bank, a $189 million-asset lender based in Covington, Virginia.
The deal, which closed Sept. 1, infused $15 million in capital into Highlands and was a better opportunity for Georgia Skyline shareholders than continued fundraising efforts, said Georgia Skyline co-founder and President Ryan Floyd.
“You kind of put the ego play behind you,” Floyd said in an interview Tuesday. “Ego would be like, ‘Yes, we did this all by ourselves, and we're starting this bank from scratch.’ But when we looked at the financials, it made more sense for our shareholders, and in the end, it made more sense to recapitalize Highlands than to start from scratch.”
Had his team moved forward with its de novo pursuit, “it would have taken us a year and a half to two years to get near a $200 million bank. Now we’re that on Day One,” Floyd said.
Floyd, previously a senior vice president at Piedmont Bank before it was acquired by United Bank last year, said he and his team of fellow Piedmont alumni looked into recapitalizing other banks last year before moving ahead with Georgia Skyline’s de novo process.
They had garnered a state charter, conditional approval for deposit insurance and were close to rounding out their capital to open when they were introduced to the Highlands team “at the 11th hour,” Floyd said. “We started peeling back the onion … and it was a great fit.”
Highlands’ deposits made the deal appealing, Floyd said. In addition to what he called a “jump start” on profitability, aligning with Highlands relieved Georgia Skyline of certain regulatory restrictions de novos face in their first years of operating. For Highlands, the appeal of Georgia Skyline is its market’s loan opportunity.
Georgia Skyline and Highlands will operate as separate brands under one bank, with Georgia Skyline opening a loan production office and full-service branch in Roswell, Georgia, by early October.
Georgia Skyline’s board will fully integrate into Highlands’ by Sept. 15.
