Crescent Financial Bancshares (Holding Company)

VantageSouth Bank (the Bank)

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June 3, 2013 Issue

The Most Powerful Name In Corporate News and Information


The merger of Two North Carolina Banks brings together the Strong Leadership Team of Scott Custer and A. Dwight Utz, and positions VantageSouth Bank as a Local Community Bank with the Resources to Take Care of Small and Medium Sized Businesses

About VantageSouth Bank (NASDAQ: CRFN):

Crescent Financial Bancshares, Inc. wholly-owns VantageSouth Bank, which is a state-chartered bank operating forty-five banking offices in central and eastern North Carolina. VantageSouth Bank has built a deep senior management team that has grown the bank to $2 billion in assets through organic growth and mergers and acquisitions with The East Carolina Bank, Crescent State Bank, and Community Bank of Rowan in the past two years. Crescent’s common stock is listed on the NASDAQ Global Market and trades under the symbol CRFN.

Scott Custer

Chief Executive Officer

Scott M. Custer, 56, has been a director of VantageSouth Bank since February 2010, and a director and Chief Executive Officer of VantageSouth Bank and Crescent Financial Bancshares, Inc. since November 2011. Mr. Custer is responsible for guiding VantageSouth Bank’s overall strategy and operations. He has served as a director and Chief Executive Officer of Piedmont Community Bank Holdings, Inc. since 2010.


Before joining Piedmont, he served as Chairman and Chief Executive Officer of RBC Bank (USA), a position he held since 2004.


An active member of the community, Mr. Custer is on the boards of trustees for the College of William and Mary and William Peace University. He holds a bachelor’s degree in economics and business administration from the College of William and Mary.


A. Dwight Utz
President, Crescent Financial Bancshares

Chairman of the Board, VantageSouth Bank


Mr. Utz joined VantageSouth Bank as Chairman, and President of Crescent Financial Bancshares as a result of the acquisition of ECB Bancorp/East Carolina Bank in April 2013. 


He joined the East Carolina Bank in July 2009 as its President/Chief Executive Officer.  Before joining East Carolina Bank, Mr. Utz was employed by Midsouth Bancorp, headquartered in Lafayette, Louisiana. He served as its Executive Vice President/Chief Retail Officer.


He holds a Degree in Business Administration from Central Pennsylvania College. He also attended the University of Delaware, Stonier Graduate School of Banking and has completed the Executive Leadership Development Program at the Center for Creative Learning in Colorado. 


Mr. Utz has been involved in several civic and state/local banking organizations, including the American Heart Association, the Rotary Club, various Chambers of Commerce and state/national banking organizations.

Business Bank


Crescent Financial Bancshares

(Holding Company)

VantageSouth Bank

(the Bank)

3600 Glenwood Avenue, Suite 300
Raleigh, NC 27612
Phone: 919-659-9000


 VantageSouth Bank

Print Version


Interview conducted by: Bud Wayne, Editorial Executive, CEOCFO Magazine, Published – June 3, 2013

CEOCFO: Mr. Utz, the recent merger of the two North Carolina banks has created what looks to be a stronger financial institution. Would you tell us the reason for the merger and the vision?

Mr. D. Utz: The reason that we looked to a partnership with VantageSouth/Crescent Financial is that our board took a long-term strategic view to see what the financial landscape would look like for our shareholders. As we assessed the next five/ seven years, it was clear that we were not going to be able to provide our shareholders with an attractive long-term return, so we looked at strategic options such as raising capital or find a strategic partner. At the end of the day, we felt like after discussions with Scott and his team that the partnership would provide each of our shareholders with a significant return that we could not have provided them over the next five to six or seven years. We looked at the regulatory environment, pressures coming down with Dodd Frank and all the other things coming out of D.C. and we just felt that we needed to take a strong look at a partnership and thus Crescent Financial/VantageSouth stood out as an attractive option

Mr. S. Custer: When we started VantageSouth our vision was and still is to create a community banking franchise across the Carolinas and into Virginia, we did not really set any size targets but we believe somewhere in the $4 to $6 billion range is certainly within what we can build. We have the capital to support that growth. We are in the process of building that franchise. Prior to ECB, we had acquired three banks. The first bank we acquired was called VantageSouth and that is the brand that we have chosen to use going forward. As it relates to how ECB fit into our vision, it was very simple to me. I spent my whole career in North Carolina predominantly in eastern North Carolina. We are headquartered in Raleigh, so when you look at it on a map it is a natural extension. I know the markets in eastern North Carolina and I had gotten to know Dwight. The franchise was a nice complimentary fit and it opened us up to new markets in Greenville and the Outer Banks. It also helps us in Wilmington. These are all places where I have contacts, have done business and run banks before in the past. I believe that by putting those together with what we already had, we have a great opportunity to achieve some size and scale and significantly improve our earnings profile. This is why the deal made sense to us. It fit into our vision and added some great new team members, Dwight included. Many of the ECB employees have meaningful jobs and are a big part of the team. I think that is another key element that we often overlook; how you strengthen yourself not just financially but with great talent.

Mr. D. Utz: You may recall when we interviewed last as East Carolina Bank; one of the things that we were in the process of doing was a capital raise. As part of that capital raise, we were looking to acquire branches in the Raleigh market. ECB wanted to move west into Raleigh and Scott and his team wanted to move east and thus the complimentary view of why this strategic partnership was so valuable. If you look at the Proforma company, a company has the strength to provide future increased value for our shareholders.


CEOCFO: Would you tell us about the parent company name versus the bank? Are you planning on maintaining the current parent company name and are you a community bank or a regional?

Mr. S. Custer: The name is simple. We like the brand-name VantageSouth. We have done much branding around that name and we talk about viewing things through our clients’ vantage point. It is nice when you can have your name tied so directly with your vision and mission of your company. That is why we like VantageSouth and why we chose it. We had acquired three companies prior to ECB and one of the companies was called Crescent Financial, the holding company for Crescent State Bank. We did not really like that name and we did not think it had the same attractiveness as VantageSouth. We branded the bank and are now in the process of rebranding and changing the name of the holding company, which is awaiting shareholder approval. There are a few steps that we have to go through so sometime this quarter that will be complete. The new holding company will be known as VantageSouth Bancshares, Inc. We are going to change the ticker symbol that we have reserved for us which will be “VSB.” That is where we are going with respect to the name. I view us as a community bank and the reason I say that is for me, being a community bank has more to do with how you do business than size. We may grow to be really more of the size that you may characterize as a regional bank if we are operating in multi states and get to a certain size. Community banks are known for making decisions locally, being involved in their communities, having local bankers that live and work there tending to the needs of small and medium sized business. Community banks are very good at being responsive to the unique and specific needs of individual markets and empowering people to run the business in those markets. I think that is the beauty of a community bank. When you can combine all that with the resources of a larger company, you can have something special.


CEOCFO: What are your roles in the new bank and how will you work with each other?

Mr. S. Custer: We have only been at this for about a month but I think we are working through that. As the chairman of the Bank Board, Dwight obviously has board responsibilities. He is working with me on certain things in the operating role. I would say that he and I are going to spend more of our time on the strategic direction of the company. We have some talent on the management team running the day-to-day guts of the business. Dwight has a little more background than I do on the retail delivery side of things so he is likely going to spend time with our retail team looking at our branch system and seeing if there are opportunities to either grow or realign that network. I probably have a little more experience on the commercial side and we both spend time on strategic growth opportunities as we look at how to grow the business.

Mr. D. Utz: I think that is right. I look at my role in a couple different ways; corporate governance from a board perspective, developing strategic partnership opportunities as well as the retail delivery. As we progress in this new organization, the roles will become more defined but I think those are probably three or four things which are repeat of what Scott said but that is really how we are going to manage the company collectively.


CEOCFO: How strong financially is the new VantageSouth Bank in assets, deposits and loans?

Mr. S. Custer: We are approximately $2.1 billion inn total assets. Total loans are approximately $1.4 billion and total deposits are about $1.5 billion.


CEOCFO: How much of North Carolina will you cover?

Mr. S. Custer: We are very comfortable where we are Raleigh to the coast. We do not have much coverage going Raleigh West. The best way to do it is to look at a map and look at Interstate 85 as it cuts through the state. We would like to follow the interstate down towards Charlotte and maybe into the upstate of South Carolina over the next several months. We are working on that now and that is probably how you will see us grow.


CEOCFO: Will growth come through acquisitions or new branches?

Mr. S. Custer: We have new pending de novo branches. One is for Jacksonville North Carolina and we know that market well. ECB was planning to go there even in advance of our deal. We have a de novo application in for Charlotte as well. The state of North Carolina has approved those branch applications and we are waiting on FDIC approval, which we hope will come shortly. Those are two de novo branches and have done well in de novo branch openings in the past. We have great organic growth prospects and a good SBA business. We are the #2 SBA lender in the state of North Carolina. SBAs are loans to small businesses that are partially guaranteed by the small business administration, a government guaranteed loan.


CEOCFO: What is the breakdown between consumers, customers and business customers?

Mr. S. Custer: We have more consumer customers just because there are more of them. Our focus is on small and medium size businesses, business owners and professionals. Those are our sweet spots.


CEOCFO: Would you consider yourself more of a business bank?

Mr. D. Utz: I think that is a fair assessment.


CEOCFO: Are there any new banking products that you would like to touch on?

Mr. S. Custer: I do not know that there is anything ever new in banking. There are many technology advances. We have to be able to provide mobile banking; bank from your iPhone or your mobile device. This is a new technology feature that we are adding and I think everybody is going in this direction. We do have a line of business that focuses on homebuilders. Many banks have gotten away from this given the downturn but we are very engaged and have a very experienced, competent team that does home builder financing. This is an important part of our company.

Mr. D. Utz: The other carry-over that you and I talked about in our earlier interview was the agricultural services business and agricultural lending. We brought that over as a line of business into the new organization and feel it will provide the same growth opportunities we had discussed previously.


CEOCFO: What would you like to say to the business and investment community about the real value of VantageSouth Bank?

Mr. S. Custer: I think the value is that we are building a franchise that is going to fit nicely in the three-state area between the large banks that have really grown into mega banks like Wells Fargo, Bank of America and BB&T. In North Carolina, about eighty small community banks exist. They are typically small and undercapitalized and do not have those services to take care of the needs of that target client segment that we talked about. We are building a very important franchise that is going to be able to live in the middle that has that local community bank approach and the resources of a company that can really deliver and take care of small and medium sized businesses. I think that is what our niche is and if you can exploit that niche, we can provide a very valuable service to the communities we are in and we can do it and deliver good financial returns for our shareholders.


Mr. D Utz: The ECB directors and I looked at finding a strategic partner that could take a long view and provide our shareholders with value added proposition and that is exactly what has occurred in this transaction. I think those are the kinds of things that will be looked at by the investor community. There are many banks in North Carolina, Virginia and South Carolina that may not have the wherewithal to continue as a viable entity going forward.


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“We are building a very important franchise that is going to be able to live in the middle that has that local community bank approach and the resources of a company that can really deliver and take care of small and medium sized businesses… We can provide a very valuable service to the communities we are in and we can do it and deliver good financial returns for our shareholders.”- Scott Custer


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