Capital gains: strategies learned at BofA helped Gene Taylor turn Capital Bank Financial into N.C.'s biggest community bank.

• Author: Mildenberg, David
• Position: MONEY TALK: North Carolina's financial set

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Gene Taylor's paycheck, though substantial, is a fraction of the old days. His deals are in the millions, not in the billions. But the enthusiasm for building a bank remains, 47 years after Taylor signed on at the former NCNB Corp. in Charlotte.

Taylor's second chapter started after his July 2007 ouster from Bank of America Corp., just as the housing crisis was developing. The move signaled the lender was in a serious bind. Taylor, then paid about $9 million a year, had been a key foot soldier as Hugh McColl Jr. and Ken Lewis, his close friend for decades, built BofA into the biggest U.S. bank at one time.

Instead of pouting, Taylor, now 68, joined BofA alums Chris Marshall and Bruce Singletary and former Wall Street bank analyst Ken Posner to form a holding company to buy troubled banks. They raised $900 million, mostly from private-equity groups, including McColl's Charlotte-based Falfurrias Capital Partners and New York-based Crestview Partners.

The empire building started with government-assisted purchases of $1.2 billion in assets from three failed banks in Florida and South Carolina in 2010. Over the next 18 months, they bought four more banks for a combined $673 million. The latter purchases included Raleigh-based Capital Bank--from whence they got their name--and Southern Community Financial Corp. of Winston-Salem, which together had more than 50 N.C. offices.

Since 2011, Capital Bank Financial Corp. has consolidated its seven institutions into one operation and whittled nonperforming loans to $59 million from $377 million. "Considering we had no brand, no brand recognition, no real size or scale, we've been able to achieve appropriate growth in the markets we serve," Taylor says. Adds Marshall, "If you look back at 2010 and the [new] banks that were formed then, I think we've outgrown every one of them."

It outgrew CommunityOne Bancorp, created through the 2011 merger of Asheboro-based FNB Corp. and Granite Falls-based Bank of Granite. In October, Capital bought CommunityOne for $361 million, adding 45 North Carolina offices.

With about $10 billion in assets, Capital is now the largest community bank based in North Carolina, about 25% bigger than High Point-based BNC Bancorp., which sports better profitability.

Taylor, who was paid $1.4 million last year, says building another interstate bank is satisfying...