RLPC: U.S. regional banks target new geographies, up-tier talent

NEW YORK Fri Feb 28, 2014 11:24am EST

NEW YORK Feb 28 (Reuters) - U.S. regional banks are increasing market share by expanding into new geographies, as well as upgrading talent when adding new roles, according to banking sources. At least four regional banks have established new corporate banking offices outside of existing footprints, in pursuit of growth opportunities.

By extension, when building new teams or expanding existing platforms and capabilities, banks are often tapping new hires armed with bulge bracket investment banking experience.

With such hires comes a new book of business, and new client relationships, said one regional banker.

"All the regionals are trying to grow. For corporate bank coverage groups, it's all about attracting new clients and getting them in the door," the banker added.

Banks, including a trio of lenders based in the southeastern U.S. - Atlanta-based SunTrust Robinson Humphrey (STRH), Birmingham, Alabama-based Regions Financial Corp and Winston-Salem, N.C.-based BB&T Corp - have each opened corporate banking offices in Chicago, to expand offerings to middle market clients in those geographies. Providence, RI-based RBS Citizens is broadening its reach in the southeast.

"RBS Citizens is expanding its corporate finance and capital markets capabilities in Charlotte, with both industry focused corporate finance and capital markets professionals, including Ted Swimmer, head of capital markets," said Bob Rubino, executive vice president and head of corporate finance and capital markets for RBS Citizens Financial Group.

STRH, which targets companies with revenues upwards of $100 million, also established corporate banking offices in San Francisco and Dallas, in addition to the Chicago office, the bank announced in November.

"There is a big opportunity to provide both core banking services and world-class IB capabilities, and we think STRH is well-positioned to seize it," said John Gregg, president and chief executive officer of SunTrust Robinson Humphrey.

The bank is focused on increasing investment banking market share nationally, as well as on providing a comprehensive set of investment banking and capital markets services to mid-sized companies, he noted.

The Dallas-based Southwest office, San Francisco-based Western office and Chicago-based Midwest office will complement SunTrust's existing presence in all three markets.

Regions Bank, as reported by Thomson Reuters LPC, expanded to Chicago with the opening of a new corporate banking office. The team is focused on serving the financing and operating needs of companies with revenues of greater than $250 million in the greater Chicago area.

In addition to the opening of its Chicago office, as part of the development of its Corporate Banking segment, Regions has also added corporate bankers in a number of other markets, including Charlotte, Dallas, Nashville and south Florida.

Meanwhile, BB&T Capital Markets named a new five-person corporate banking team based in Chicago, representing a continued "acceleration" of the lender's national growth strategy, it said in an announcement last fall.

The team will be central to the development of BB&T's overall Midwest corporate client base, the bank said, and will also serve as the base for its national effort to serve companies in the food, agribusiness and beverage industries.

Talent

With expansion comes the need for new hires. Regionals are tapping banking veterans with capital markets experience, as well as strong industry and credit expertise, market sources said.

Ted Heldring is leading STRH's corporate banking team in Chicago. He joined STRH from JP Morgan, where he was most recently head of the Chicago office for debt capital markets.

Leading the San Francisco-based team is Jim Deichen, a long-time veteran of Bank of America Merrill Lynch, most recently as the West Coast head of technology corporate banking. In Dallas, Clint Bryant who joined STRH from Fifth Third Bank will lead the team.

All three offices are expected to build out teams, the bank said. Other banks have also picked up talent. In particular, former bankers from Bank of America Merrill Lynch and JP Morgan are surfacing at some regional banks, middle market lenders noted.

In this slow growth economic environment, combined with a certain degree of disintermediation in the banking sector by institutional investors, as well as regulatory constraints expected to curb lending activity to some degree, banks have concluded that organic revenue growth alone will not drive overall growth, said a second regional banker.

Industry coverage and geographic coverage expansion provide a path for growth. With zero presence, growth is achieved with the first loan, he noted.

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