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Tidelands Bancshares is a coastal South Carolina community bank franchise
in the three dynamic markets of Charleston, Myrtle Beach, and Hilton Head/Bluffton, which
are very rapidly growing markets, not only in numbers of people, but also in dollars of
deposits
Financial
Regional-Mid-Atlantic Banks
(TDBK-NASDAQ)
Tidelands Bancshares Inc.
875 Lowcountry Boulevard
Mount Pleasant, SC 29464
Phone: 843-388-8433
Robert E. Coffee, Jr.
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published - January 4, 2007
BIO:
Robert E. Coffee Jr.
A native of Camden S.C., Mr. Coffee graduated from The Citadel in 1970 with a B.S. in
Business Administration. He began his banking career in the Management Training program
with South Carolina National Bank in June of 1970. In 1980 he joined the Bank of Beaufort
and began the community banking phase of his career. Between 1982 and 1985 he worked with
the Bank of Hartsville and managed the commercial loan portfolio of that bank. In 1986, he
was part of a group of investors who founded 1ST Atlantic Bank in Little River,
S.C. He served as President, CEO, and was a Director until it merged with Anchor Bank in
December of 1993. He became Executive Vice President and the Chief Administrative Officer
and was a Director of Anchor Bank, operating in that capacity until Anchor Bank merged
with Carolina First Bank in April of 2000. He retired and was retired until helping start
Tidelands Bank. He currently serves as President / CEO and a Director of Tidelands Bank
and it parent, Tidelands Bancshares.
Mr. Coffee graduated from The Stonier Graduate School
of Banking at Rutgers University in 1978 and The National Commercial Lending Graduate
School at the University of Oklahoma, With Distinction, in 1982.
Mr. Coffee has served on numerous boards and
professional organizations including The South Carolina Bankers Association, Chairman of
the South Carolina Bankers’ School, The Citizens Advisory Council of the Hollings Cancer
Center, The South Carolina Coastal Conservation League, DeBordieu Club, and The State
Board of Financial Institutions from 1992 until 2000.
Mr. Coffee has been married to the former Betty Krell for 35 years, and they have 2 sons.
Company Profile:
Tidelands Bancshares is the holding company for Tidelands bank, a Charleston, SC based
coastal community bank franchise. We have locations in Charleston, Summerville, Myrtle
Beach, and the Hilton Head/ Bluffton area. We finished the 3rd quarter with
$316 million in assets and we have a market capitalization of approximately $63million. We
are listed on Nasdaq under the symbol TDBK. We opened for business in October 2003. We
were just recently named the 4th fastest growing company in South Carolina by
the South Carolina Chamber of Commerce.
CEOCFO: Mr. Coffee, please tell us what attracted you
to the new venture, Tidelands Bank, and took you out of retirement?
Mr. Coffee: “I was ready to go back to
work. It looked like an outstanding business opportunity, which in fact to this point has
proved correct. I find that I am having more fun today than I have ever had in my working
career. I still wanted to build something and this provided that opportunity.”
CEOCFO:
Why was there a need for a new bank when you opened and what was the vision?
Mr. Coffee: “Theoretically, you could
say we had enough banks, but just like any business venture, we saw an opportunity and we
had the commitment of enough shareholders to raise the capital. We had a lot of skin in
the game ourselves, with regard to the management team and the organizers. Our management
team with the exception of me worked for big banks and although mergers had not displaced
them, they felt that their ability to be creative, serve their clients, and contribute was
not there as it had been in the past. Therefore, starting a new company, bringing the
entrepreneurial spirit, interested them; there were four original when I came
on-board.”
CEOCFO:
Will you tell us about the economy in the market area which you cover?
Mr. Coffee: “We cover the coast of South
Carolina. We are in three dynamic markets. We are in the Charleston, Myrtle Beach, and
Hilton Head/Bluffton markets. These particular markets represent a little over $15 billion
in deposits. They are also some of the most dynamic in the country and the growth rates
are phenomenal. The Charleston market has experienced 67% growth since the year 2000, the Myrtle
Beach market has enjoyed 69% growth since 2000, and the Hilton Head market has enjoyed 51%
growth since 2000. These are very rapidly growing markets, not only in numbers of people,
but also in dollars of deposits, which is what we live and die buy.”
CEOCFO:
Is there a typical customer for you?
Mr. Coffee: “We have engaged a vendor
to find out the demographics and tell us what a typical customer is. It is a professional
person, small businessperson, and entrepreneur. They are affluent, they make above the
average wage and they are well educated, with a college degree. We are a commercial bank
so most of the customers that come to us, come for business reasons and then after we are
able to satisfy their business needs; we then try to satisfy their personal needs, such as
purchasing cars, boats or second homes.”
CEOCFO:
How do you attract new customers?
Mr. Coffee: “We attract new customers
through word-of-mouth and referrals from our existing customers. In addition, we are
beating the street and knocking on doors looking for clients and customers. We have a good
reputation and we work hard to keep a good reputation in the community, which also brings
business to us.”
CEOCFO:
What accounts for the good reputation?
Mr. Coffee: “We have a good reputation
for several reasons; one is that we are able to communicate to our customers clearly the
vision of our company. We are Charleston based, coastal South Carolina community bank
franchise. We tell it straight to the customers and pay attention to the customers; when
they have a need, we can react very quickly to that need. We think that is why people deal
with us. In addition to that, clients know that when they look at me, they know that they
are dealing with the decision maker and that really separates us in a lot of ways from the
larger regional banks.”
CEOCFO:
What sets you apart from the other community banks?
Mr. Coffee: “All community banks have
the same products; we make loans and accept deposits. What sets us apart is our
reputation. We have the deepest bench of talent of any of the community banks that compete
against us. We have been in the markets a long time, so people know our players and who
does the business in our company, which makes a difference.”
CEOCFO:
Do you see the need for additional offices?
Mr. Coffee: “Yes. At the present, we
actually have three offices and two of those offices are in storefronts. One is a full
stand-alone branch with drive-in windows and an ATM. We plan to take the two that are in
storefronts and put them in standalones with drivethroughs and ATMs. We also have two
additional offices on the drawing board. By the end of the first half of 2007, we will
have five full service branches. The reason to leverage our locations is to gain market
share. They say that with the internet, the need for brick and mortar branches was going
to go away and nothing could be further from the truth. If you look at the larger
institutions and community banks throughout the country, they are building brick and
mortar branches and we are no different. You have to be convenient; the internet is one
way to be convenient, but it is only one way.”
CEOCFO:
Are there services you feel the need to add?
Mr. Coffee: “We would like to add some
in the future. We do not have a wealth management part to our company; trust and
investments. We should probably get into that at some point. That particular line of
business is one that takes a long time to develop and has a lot of expense on the front
end. The trust business I am not sure of, so we will just have to see. Right now, we are
sticking to our knitting and doing what we have to do to build our franchise. We are a
growth story with the financial performance to back it up. Just recently, our company was
named the fourth fastest growing company in South Carolina by the S.C. Chamber of
Commerce. We have made a million one in the first three quarters and that is about 12
cents per diluted share for the quarter for the first three quarters. We are making money
but growing fast. Investors value our company now based on our growth story on our
earnings.”
CEOCFO:
You started trading on NASDAQ recently; will you tell us about that?
Mr. Coffee: “It was a decision we made
when we built our business model in the beginning. We are about a year ahead of the plan
to go on Nasdaq. The reason we did it now is because we had to go back to the market and
raise some equity in a follow up. We decided since we were going to have about 4.2 million
shares outstanding, it was time to list on NASDAQ and give our shareholders some liquidity
to allow them to buy and sell on the open market. It has been a good move for us. Being
listed gives us the ability to hopefully go back and get capital again if we need it. It
lets our investors see how the stock is doing and gives us more visibility.”
CEOCFO:
Is Wall Street starting to pay attention?
Mr. Coffee: “I think so. We have a very
strong piece of institutional ownership in our company, so I spend a lot of time in front
of the investor community. In fact, I am going to Florida this week to make a presentation
at an investor conference. We are a microcap company, so it has to be those investors that
really pay attention to microcaps.”
CEOCFO:
Many banks are struggling with interest rates, how does that affect you?
Mr. Coffee: “I think we are in better
shape because we are a newer bank. We are smaller and can react quicker than maybe some
older institutions. About six months ago, we figured on a flat yield curve and we started
to restructure our balance sheet for that environment so we have done that. We had a goal
of having approximately 35% of our assets in fixed rate instruments, whether loans or
investments and 65% in variable rate assets. We have been able to accomplish that. We
think we are sitting in a good seat for interest rates to go down or up.”
CEOCFO:
Why should potential investors be interested and what might not jump off the page that
people should know?
Mr. Coffee: “If you look at the
previous 20 years at investors who made investments in community banks in growth markets,
their returns have been very good. What potential investors would look at in a community
bank would be the markets in which you operate, which need to be growth markets and the
management of the company. If you feel comfortable with the management, you are familiar
with the markets and you are a long-term patient investor, then you will be rewarded very
well. We don’t pay a cash dividend, because we are growing very fast and want to
retain all of the capital. Therefore, it will be a long time before we pay a cash
dividend, so you don’t invest in our company because you are looking for a cash
dividend. You would invest in our company because you believe that the long term
appreciation of the stock will give you a very good return.”
CEOCFO: What are your daily responsibilities
as CEO?
Mr. Coffee: “I’m a cheerleader, a
recruiter, and leader and sometimes I’m a problem solver.”
CEOCFO: In closing, what should people take
away from this interview about Tidelands?
Mr. Coffee: “Our company is a young
company and we have built a lot of momentum, which is important. You are investing in a
young exciting company with strong management that is in great markets. You can translate
momentum over a period of time into the stock price, which has a tremendous amount of
potential. I’m a big stake holder myself, with a lot of my own skin in the
game.”
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