420 North 20th Street
Birmingham, Alabama 35203
Telephone: (205) 254-6616
Fax: (205) 254-5404
Incorporated: 1887 as Birmingham Trust and Savings Company
Total Assets: $15.1 billion
Stock Exchanges: NASDAQ
SICs: 6712 Bank Holding Companies; 6021 National Commercial Banks; 6022 State Commercial Banks
The SouthTrust Corporation is a multi-bank holding company with operations in six southeastern states. Based in Alabama, SouthTrust is the dominant banking company in that state and a prominent player in the region as a whole. The company was formed from four local banks in the early 1970s, and grew rapidly by acquiring other Alabama banks. In the late 1980s, state law began to permit interstate banking for the first time, and SouthTrust undertook a regional expansion, buying small local banks and fostering their growth through decentralized management.
Southtrust traces its origins to the Birmingham Trust and Savings Company, which opened its doors for business on December 9, 1887. The bank was headed by H. M. Caldwell and situated on Morris Avenue in Birmingham, Alabama. By the end of the century, deposits at Birmingham Trust had grown to $1 million. In 1902, the bank moved to a new location, on 20th Street in Birmingham. This new building contained a modern vault, for the safe storage of valuable possessions.
Within ten years of this move, Birmingham Trust's deposits had topped the $5 million mark, as the bank continued to prosper. In 1922, the company's assets had grown to $15 million. Birmingham Trust remained a local company, with an exclusive emphasis on serving the community of its hometown throughout the 1920s, 1930s, and the war years of the early 1940s.
In the wake of World War II, however, Birmingham Trust set its sights on a larger world for the first time. In 1946, the company sought a charter from the federal government and became a national bank. The company changed its name at this time to Birmingham Trust National Bank (BTNB).
Four years later, BTNB opened its first branch office, at 7524 First Avenue North in the town of East Lake. Further innovation came late in the 1950s, when BTNB introduced the first charge plan to be offered in the state of Alabama.
In 1963, BTNB expanded the scope of its activities further, when it merged with another financial institution, the Bank for Savings and Trusts. Five years later, the company restructured itself, forming a holding company called the BTNB Corporation. This company had as its assets the Birmingham Trust National Bank and comprised the first one-bank holding company in Alabama.
Also in 1968, BTNB became the first bank in Alabama to offer the BankAmericard charge card. Three years later, in 1971, the company again became a pioneer in the banking industry, when it installed the first automated central information system used in an American bank. In 1972, BTNB introduced the first electronic banking machines offered in Alabama. Called "Anytime Tellers," they offered basic banking services at any hour of the day.
In the early 1970s, BTNB began a period of strong growth. In 1972, the company formed a union of four banks, together with the First National Bank of Dothan, the Peoples National Bank of Huntsville, and the Commercial Guaranty Bank of Mobile. This new company took the name Alabama Financial Group, Inc.
Under the leadership of Wallace D. Malone, Jr., who had contributed his family bank in Dothan to the Alabama Financial Group pact, the company began to grow rapidly. Over the next 15 years, the Alabama Financial Group bought 28 financial institutions within its home state, to become one of Alabama's top four bank holding companies.
This process began in 1973, when the Alabama Financial Group purchased three banks--the Baldwin County Bank of Bay Minette, the Marion County Banking Company of Hamilton, and the First National Bank of Anniston. In 1974, the Alabama Financial Group purchased the Southern Bank of Lauderdale County, the Sand Mountain Bank of Boaz, the Citizens Bank and Trust Company of Selma, and the Southern Bank of Montgomery, N.A.
With this further expansion, the Alabama Financial Group changed its name once again, becoming the Southern Bancorporation of Alabama. With combined assets exceeding $1 billion, this company took its place in the upper ranks of the country's regional financial organizations.
In an effort to maintain that standing, Southern continued to purchase other financial institutions in the mid-1970s. In 1975, the company bought the stock of the Jackson Company, a leading mortgage bank. In addition, the Southern Bank of Lee County and the Southern Bank of Russell County were brought under the umbrella of the holding company.
Throughout this time, Southern's lead bank, BTNB, had also experienced strong growth. In 1977, BTNB reported that its assets exceeded $1 billion; it was the second bank in the state to reach this size. Two years later, BTNB also passed the $1 billion mark in deposits.
In 1980, Southern added another banking property, when the First National Bank of Etowah County became an affiliate of the company. The following year, the company again changed its name, this time to SouthTrust Corporation, and began to convert the names of all its affiliates to the new common identifier. Among the first banks to undergo this process was the Auburn Bank and Trust Company, which became affiliated with SouthTrust, and then merged with the Southern Bank of Lee County, becoming the SouthTrust Bank of Lee County.
In 1982, SouthTrust's lead bank, the Birmingham Trust National Bank, officially became the SouthTrust Bank of Alabama, N.A. SouthTrust also bought the Muscle Shoals National Bank and merged it with the Lauderdale County Bank, renaming the resulting financial institution SouthTrust Bank of the Quad Cities. In addition, the company added the First National Bank of Piedmont, the Citizens Bank of Northport, and the Coosa Valley Bank of Gadsden.
In 1983, SouthTrust placed additional Alabama financial institutions on its roster of affiliates. The company bought the Midland State Bank, the First Bank of Alabaster, the Leeth National Bank, and the Bank of Hackleburg. In addition, SouthTrust consolidated two of its other operations, merging the SouthTrust Bank of Piedmont into the SouthTrust Bank of Calhoun County.
In September 1983, SouthTrust purchased another Alabama bank holding company, the Citibanc Group, Inc., which had six affiliated banks and assets totaling $140 million. By this time, SouthTrust had grown to include 18 different bank subsidiaries, giving it assets of $2.6 billion. At the end of the year, SouthTrust stood as Alabama's fourth largest banking company.
In 1984, SouthTrust completed the conversion of its affiliates' names, when its non-banking units also adopted the new corporate logo. Accordingly, the Jackson Company, SouthTrust's mortgage banking subsidiary, became the SouthTrust Mortgage Corporation. In a further consolidation, the SouthTrust Bank of Dale County merged with the SouthTrust Bank of Dothan, taking the latter's name. In addition, the Peoples Bank of Anniston was folded into the SouthTrust Bank of Calhoun County. By the end of the year, SouthTrust had overtaken its closest rival to become Alabama's third largest bank, with assets of $3.09 billion.
SouthTrust's rearrangement of its assets continued in 1985, when the SouthTrust Bank of Tuskegee merged into the SouthTrust Bank of Auburn. At the same time, the Alex City Bank was added to the SouthTrust Bank of Coosa County, forming the SouthTrust Bank of Central Alabama.
The bank also renewed its practice of purchasing other financial institutions. After the Elba Exchange Bank became a SouthTrust affiliate, its name was changed to SouthTrust Bank of Coffee County. Another acquisition, the First National Bank of Opp, was renamed the SouthTrust Bank of Covington County. In addition, SouthTrust bought the Peoples Bank and Trust Company in Sylacauga, Alabama, which became the SouthTrust Bank of Talladega County, and it purchased the First National Bank of the South, which was renamed the SouthTrust Bank of Covington County. With the completion of this string of mergers, SouthTrust had grown to become the second largest bank holding company in Alabama. Its assets had increased to $3.7 billion, and its properties included 22 financial institutions and seven bank-related affiliates.
In 1986, SouthTrust added three new banking affiliates, the Citizens Bank of Hartselle, the Bank of Ozark, and the SouthTrust Bank of Cleburne County, and it also started a new bank, the SouthTrust Bank of Walker County. With these moves, SouthTrust passed the $5 billion mark in assets for the first time.
SouthTrust attributed its steady growth and continuing financial success to its policy of hands-off management. Rather than try to integrate all of its purchases thoroughly into one company, SouthTrust remained a loose federation of community-based banks. The company was noted for its policy of allowing local employees to make decisions about loans and other matters, and it often did not even require that a SouthTrust representative sit on the Board of Directors of the banks it had purchased.
These policies enabled SouthTrust to grow so steadily that the company required a new headquarters facility in 1986. At that time, SouthTrust moved its home base to the new SouthTrust Tower in Birmingham, the tallest building in the state. The company's identification with Alabama's tallest building was a physical representation of its literal condition within its home state. By 1987, SouthTrust had grown as much as it could grow within the borders of Alabama.
In order to continue its expansion, SouthTrust needed to look to other, more fertile markets. In July 1987, this became possible for the first time, when Alabama passed a regional banking law allowing financial institutions to run banks in the 12 southeastern states that made up the reciprocal interstate banking region. In response to this change in its business environment, SouthTrust announced its intention to achieve assets of $10 billion by 1991 and to expand its operations into all 12 of the states available to it.
SouthTrust began its campaign to achieve these goals just days after passage of the new banking law, when it purchased the Central Bank of South Daytona Beach, in Volusia County in Florida, becoming, in the process, the first Alabama state to add a Florida financial institution to its roster. A string of other acquisitions followed, as SouthTrust went on a Florida buying binge. The company limited its purchases to central and northern Florida and concentrated on the segment of the financial market that it knew best: banks that served small-to-medium sized businesses, professional customers, and retailers in the immediate area of the branch office.
In 1987, SouthTrust took over the Vista Bank of Marion County, the Vista Bank of Volusia County, the First Bank of Mariana, and the Gulf/Bay Financial Corporation. In July, the company announced that it would buy the Bank of Florida Corporation, based in St. Petersburg, Florida. In the fall, SouthTrust also purchased the First National Bank of Jacksonville.
On the whole, the banks that SouthTrust purchased in Florida had not demonstrated stellar financial returns. Analysts speculated that the company hoped to acquire money-losing properties cheaply and then make them profitable. With a total of seven acquisitions, the company had established a presence in three of Florida's main banking markets and two of its medium-sized markets within the first year of its entry into the state.
Also in the fall of 1987, SouthTrust made its first foray into Georgia, when the company petitioned federal regulators for permission to move the headquarters of its SouthTrust National Bank of Russell County across the state line to Columbus, Georgia. The company's interstate expansion continued in the following year, when SouthTrust acquired the Latta Bank and Trust, of Latta, South Carolina, which became the SouthTrust Bank of Dillon County. In addition, the company moved into Tennessee, opening the SouthTrust Bank of Middle Tennessee, based in Nashville.
In April 1988, SouthTrust reorganized its Florida holdings, the assets of which had grown to $500 million, by forming a new bank holding company, SouthTrust of Florida, Inc. This company was given jurisdiction over SouthTrust's seven Florida banks, with 23 branches. In this way, SouthTrust hoped to maintain its heavily decentralized structure, fostering a small bank culture, with the advantages of quick decision making, backed up by big bank resources.
SouthTrust enhanced its presence in the Florida market in 1989, establishing the SouthTrust Estate & Trust Company in St. Petersburg and opening the SouthTrust Bank of Sarasota County. The Bank of Washington County and the First Bank of Holmes County were also merged into the SouthTrust Bank of Northwest Florida, which had previously been formed by the merger of Florida Central Banks, Inc. and Florida Community Banks, Inc., with the SouthTrust Bank of Jackson County.
In addition, SouthTrust added a new bank in its home state, the Wiregrass Bank and Trust Company of Headland, Alabama. In South Carolina, SouthTrust opened the doors of a newly-founded bank, the SouthTrust Bank of Charleston. The company also enhanced its holdings in Georgia by buying Sentry Bank and Trust in Roswell, Georgia, which became the SouthTrust Bank of Atlanta.
By early 1990, SouthTrust's steady growth had made it the largest bank based in Alabama, with assets of $7.5 billion. In February of that year, SouthTrust continued its incursion into the Florida banking market when it opened the SouthTrust Bank of Orlando. In addition, the company bought the Community National Bank of Cape Coral and changed its name to the SouthTrust Bank of Southwest Florida. The company also consolidated two of its northern Florida banks into one unit. In June 1990, SouthTrust also strengthened its Georgia operations when it bought the north Georgia banking division of the First Liberty Financial Corporation, which had more than 12 bank branches in the Atlanta area, and 22 former Fulton Federal Savings and Loan offices altogether. This gave SouthTrust 42 locations in the Atlanta market.
In 1991, SouthTrust moved into North Carolina, establishing the SouthTrust Bank of North Carolina. Later that year, the company also purchased three offices of the Barclays Banks of North Carolina. In addition, SouthTrust added to its Florida holdings, buying the Duval Savings and Loan company of Jacksonville and the Clearwater office of the Florida Bank of Commerce.
By the end of 1992, SouthTrust had more than doubled in size since the advent of interstate banking in 1987. The company had completed 18 acquisitions of small banks outside Alabama, bringing its assets to nearly $12 billion. One of the bank's primary focuses outside Alabama was Atlanta, a fast-growing market where SouthTrust acquired 90 branch offices in just three years, making it one of the city's largest banks. All together, SouthTrust had 336 offices across six states, and it had attained the status of a "mini super-regional bank."
At this stage of its growth, SouthTrust announced that it would limit further geographical expansion to concentrate instead on improving its market share in the areas where it had already established operations, along with a few new target markets. One of these key focus areas was Charlotte, North Carolina, where SouthTrust bought the 11 branch offices of the American Commercial Savings Bank, owned by American Bancshares, Inc., in January 1993. The company planned further expansion in this area.
In addition, SouthTrust made further inroads into the Orlando market, buying the Commercial State Bank of Orlando for $10.6 million. By the end of 1993, SouthTrust's assets had grown to $15.1 billion.
SouthTrust opened up another new territory for growth in May 1994, when it announced that it had purchased the First Jefferson Corporation, owner of the Jefferson Bank of Mississippi. Three months later, SouthTrust also made its debut in the Memphis, Tennessee market, starting from scratch instead of buying an existing property. This operation was added to SouthTrust's 39 existing banks, with more than 400 branch offices. With a steady record of strong growth and careful expansion, SouthTrust appeared well situated to prosper as it expanded its reach in the coming years to include all of the southeastern United States.
Principal Subsidiaries: SouthTrust Bank of Alabama, N.A.; SouthTrust Bank of Calhoun County, N.A.; SouthTrust Bank of Dothan; SouthTrust Bank of Hartselle; SouthTrust Bank of Mobile; SouthTrust Bank of Northwest Florida; SouthTrust Bank of Ozark.
Cline, Kenneth, "Alabama Banks Look Beyond Borders," The American Banker, June 21, 1989.
Cline, Kenneth, "SouthTrust's Malone Sets His Own Terms for Growth," The American Banker, October 27, 1992.
Flaum, David, "Expanding SouthTrust Opens Here Monday," The Commercial Appeal, August 7, 1994.
King, Jim, "Competitive SouthTrust," The Atlanta Journal and Constitution, October 4, 1992.
Kuhn, Brad, "Alabama Banks Spreading into Sunshine State," Orlando Sentinel Tribune, June 27, 1993.
Kuhn, Brad, "Thinking Small in a Big Way," Orlando Sentinel Tribune, January 8, 1990.
Livingston, Skip, "SouthTrust Bank Buys Sweep Across Florida," The Business Journal--Jacksonville, November 16, 1987.
Swasy, Alcia, "SouthTrust Forms New Florida Bank-Holding Firm," St. Petersburg Times, April 20, 1988.
Source: International Directory of Company Histories, Vol. 11. St. James Press, 1995.