Magazine article American Banker

South Financial Planning Buildup in CRE Lending

Magazine article American Banker

South Financial Planning Buildup in CRE Lending

Article excerpt

South Financial Group Inc. of Greenville, S.C., plans to put more commercial real estate loans on its balance sheet despite evidence of growing credit deterioration in the sector.

The company said Wednesday that it has hired Andy Morris to lead its commercial real estate group and specifically to boost income-producing loan volume, or loans funding apartment buildings and other rental property.

Mr. Morris started as an executive vice president and commercial real estate director, a newly created position, on Feb. 1. Before joining South Financial he was a commercial real estate executive at Regions Financial Corp. of Birmingham, Ala.

His 30 years in the industry have also included stints at SouthTrust Corp. of Birmingham and at Wachovia Corp. after Wachovia bought SouthTrust in 2004. At South Financial he reports to H. Lynn Harton, the $13.9 billion-asset company's chief risk and credit officer.

Mr. Harton said he is comfortable with South Financial's risk profile in commercial real estate despite some credit deterioration in CRE.

"In that environment we think really the winners will be people that have the best relationships and best contacts and are dealing with the best developments," he said in an interview Wednesday. "Those are the relationships that we want to grow with. We believe he'll help us do that."

Making money in real estate during the last decade was easy, he said, but now "you're going to see a real distinction between the winners and losers."

South Financial reported that its net chargeoffs rose 41% in the fourth quarter, to $23.7 million, though $9.2 million of that was related to an alleged loan scheme involving the Village of Penland development in Spruce Pine, N.C., that stung several banks.

Mr. Morris, who once worked with Mr. Harton at Regions, said he was impressed with the people at South Financial and called his new job "an opportunity to build from the ground up a little bit. …

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