Bank ability.

• Author: Davis, Lisa
• Position: North Carolina's banks under interstate banking

North Carolina banks are rolling up record profits, but can they position themselves to thrive under nationwide interstate banking?

North Carolina's banks are on a roll. Last year, profits were up 24%. Assets grew 17.7%, topped only by Nevada's 25%. In the first quarter, Tar Heel bank assets grew an additional 5.6%, to $109.8 billion.

That bumps North Carolina up to ninth among states in total assets from 11th a year ago. The state's strong economy and midsized bank's savings-and-loan buying spree helped fuel the growth. Last year, 32 banks had assets greater than $100 million. This year, 37 do. But as the asset figures grow fatter on BUSINESS NORTH CAROLINA's annual ranking of Tar Heel-based banks, the list itself gets shorter. On March 31, 70 banks were headquartered in North Carolina, down from 78 a year earlier.

Because the industry is becoming increasingly competitive, many banks consider the best way to prevail is to consolidate. Bigger is better, they figure--and cheaper, too, since merged banks can combine operations and cut costs. Five banks that disappeared from last year's list were New East Bancorp subsidiaries. The Selma-based bank holding company merged with Triangle Bank last year to form Raleigh-based Triangle East. Also acquired were First Charlotte (by Centura), Greensboro-based Bankers Trust (by Triad) and Bank of Bladenboro (by First Citizens). The Resolution Trust Corp. took over Crown National of Charlotte.

Myrtle Beach, S.C.-based Anchor Bank got a toehold in the Tar Heel State by acquiring Topsail State in Hampstead. The highest-ranked newcomer is No. 10 SouthTrust Bank of Central Carolina. Its Alabama parent company bought CK Federal Savings Bank of Concord last year, converted it to a full-service bank and started growing it like crazy. Over the past year and a half, South Trust has opened or started construction on eight offices (it now operates 17) and has plans for more.

With nationwide interstate banking soon to become reality, the merger pace will hardly slow. Since March 31, the date on which BUSINESS NORTH CAROLINA's ranking of assets is based, United Carolina acquired Bank of Iredell and First Bank of Troy bought Central State.

Those acquisitions are small potatoes compared with the announcement in August of the merger of two of North Carolina's big fries: Wilson-based BB&T Financial and Lumberton-based Southern National Corp. If approved, the state's fourth- and sixth-largest banks will combine to form the...