Magazine article American Banker

3 Who Got Bank Stake in Firm Awarded Stock Worth $13M

Magazine article American Banker

3 Who Got Bank Stake in Firm Awarded Stock Worth $13M

Article excerpt

Carolina First Corp.'s president, its finance chief, and a lower ranking employee were rewarded handsomely for steering the bank to a lucrative stake in a new bank technology company.

According to its most recent securities filing, the Greenville, S.C., company this year gave president Mack I. Whittle and the two others a portion of its stake in a company that makes automated loan machines.

The gift is now worth more than $13 million because the technology company's stock soared after it went public in April.

The investment was in Affinity Technology Group Inc., Columbia, S.C., which went public in April at $13 a share. Its stock traded recently at just over $20 a share.

"I think the reason why this has caught so many people's attention is because of the size" of the award, said Vernon Plack, an analyst at Scott & Stringfellow Inc., Richmond, Va. "It's an award that you don't see often. But you can argue both sides. You can say if there wasn't a foresight in making this investment there wouldn't have been this windfall for Carolina First."

Carolina First's remaining 20% stake in Affinity is worth about $120 million. The bank originally acquired about 23% of the firm - before the IPO - in exchange for providing loan financing and business consultation.

Chief financial officer William S. Hummers, one of the stock recipients, said that the executives' reward was not out of proportion. "The benefit to the company far outweighs any benefit to the executives," he said. …

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