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GREENSBORO — In a world where banks are folding like $100 bills, a group of Greensboro bankers has found a creative way to slip around the economy’s obstacles and open a new community bank.

The founders of The Gate City’s Community Bank needed to raise $12 million to open the bank, but the bad economy slowed them down.

At the $9 million mark, when fundraising slowed, the bank’s local startup team decided to take a different approach.

Gate City found another startup bank, Albemarle Bank & Trust in Greenville, that was facing similar challenges. Together, they found a strong, small savings bank, West Town Savings Bank in Cicero, Ill., that needed money.

Gate City and Albemarle pooled some of the capital they raised and bought stock in West Town. They are now independent divisions of that bank.

And soon, said Tom Smith, president and managing director of Gate City, the two North Carolina banks will create a holding company that will be based in this state.

“In the end, the North Carolina investors will own approximately 80 percent of West Town Savings Bank,” said Smith. “The driving force of the organization will be centered in North Carolina.”

It’s the best of both worlds: the creative freedom of a startup bank and the established tradition of a venerable bank founded in 1922.

Under the agreement, Gate City and Albemarle will keep their management and names.

West Town was unique, Smith said, because it didn’t take federal bailout money. But it did need capital. In addition, two members of senior management were preparing to retire after 45 years in banking. So West Town was open to radical ideas.

Before Gate City and Albemarle added their capital and business assets, West Town was a bank with about $60 million in assets. It’s now up to around $90 million.

To help set up the new bank organization, it is selling 250,000 shares of stock at $9.50 a share to the public for the next 30 to 60 days, Smith said.

Don’t march out to deposit your money in Gate City yet. The bank is an office with three executives who are just offering mortgage, commercial and consumer loans right now.

Smith works with Laura Mims, who is the senior vice president of human resources and marketing for all three banks, and Bob Garrison, manager of the Greensboro mortgage division.

After they form the holding company in the next few months, the bank will be able to offer full consumer services.
The first full-service branches will open in Edenton and Greenville. Expect to see The Gate City’s Community Bank open branches here in one to two years.

Smith was one of the early drivers of the idea for this bank in 2007. He joined with a number of other local executives, including retired Boren Brick executive Mose Kaiser Jr. to start Gate City rolling. Kaiser is now chairman of the board and serves with such executives as Sam Funchess, president of the Nussbaum Center for Entrepreneurship and Ron Wilson, retired president of Starmount Residential, which closed two years ago.

Laura Mims is the daughter of Jim Mims, the retired chairman and CEO of Triad Bank.

Smith is in his 36th year as a banker and has helped organize new banks before. He worked with Carolina Bank’s organizers in 1995 and stayed until 2003. After that he joined Capital Bank. In the fall of 2007 he met with Kaiser and several other people and they got state approval to start a new bank.

They began selling shares of stock in March 2008.

“We were really selling a lot of stock and in the fall of ’08 — I don’t need to tell you what happened,” Smith said.

Mims said her career also began in banking. Her first job was at F&M Bank in Rowan County. She was the director of marketing there for 10 years. She started a medical practice management consulting business in Salisbury after that, but closed that after she realized the commute from Greensboro was brutal. She met Smith in a supper group and joined the startup team. Kaiser and Jim Mims had grown up together, so it was natural for Mims to join as an adviser as well.

Bankers will have plenty of autonomy to make quick decisions at Gate City, Smith said: “People really love a 'yes’ and they respect a 'no’ but they just can’t deal with the lingering 'maybe.’”

“It also comes down to, in a lot of cases, the ability to make pricing decisions,” Mims said. “We’re able to look at someone’s total relationship and we’re able to be a little more flexible.”

Contact Richard M. Barron at 373-7371 or richard.barron@news-record.com