Palmetto Citizens Federal Credit Union wants to expand, but it's mostly playing a waiting game – waiting for banks to close branches.
On March 31 it will be opening a new branch in Whitmire, S.C., a small town 50 miles northwest of Columbia, the state's capital.
It's a big deal for the credit union ($1.4 billion in assets, 86,171 members), which has had 15 offices clustered near Columbia since 2018, and a big deal for Whitmire, which lost its only bank branch two years ago.
Robert Dozier, who took over as Palmetto Citizens' president/CEO in February 2023, talked with the mayor and offered to open a branch in the city. Palmetto Citizens paid $80,000 for a 1890s building downtown, and spent more to refurbish its 1,650 square feet. The credit union's land and building assets grew by $3.3 million in the 12 months ending Dec. 31.
The credit union also decided in 2024 to consolidate its operations into a new headquarters beside the one it built in the 1950s in a part of downtown Columbia known for a group of churches built before the Civil War. It was also not far from where the credit union was launched in 1936 when 10 teachers pooled $50.
Palmetto Citizens now has about 125 employees working in its 40,000-square-foot building. It plans to move its mortgage, call center and other operations into the new building, bringing its headcount to over 200 when it opens early next year.
City records showed Palmetto Citizens plans to invest $47 million in the project, which includes the 100,000-square-foot, five-story office building and a 325-space parking garage. The credit union spent $3 million in 2016 buying the property, which included a smaller office building that was razed last year.
Dozier said other factors are likely to lower that cost. That would include plans to lease 6,000 square feet of the ground floor for a restaurant and also reserving the third floor for lease.
Downtown Columbia is home to the University of South Carolina, whose expansions have led to boom in construction of large apartments. Not so much with offices, making Palmetto Citizens' plans a significant gain for downtown.
"We believe this is a generational move for Palmetto citizens, but it's a transformational move for downtown Columbia," Dozier said.
Dozier said the growth in the downtown population is helping with restaurants and making downtown a more attractive place to work.
Palmetto Citizens now ranks sixth in the number of branches and other locations in South Carolina, but it is No. 1 in Richland County, where Columbia is located.
But Palmetto Citizens is looking for long-term growth outside Columbia.
Dozier said dozens of financial institutions would bid on branches in the state's fast-growing areas of Greenville near the mountains and Charleston on the coast. But there is a wide swath of counties outside Columbia in the state's "Midlands" and some of its "Upstate" that are underserved.
That's where Dozier believes Palmetto Citizens will find its next chances to expand its branch footprint.
"Whitmire is the example," Dozier said. "If a large financial institution wants to close in the dark of night after 30 years and leave somebody in a 30-mile banking desert circumference, great: We can go in and help them."
Palmetto Citizens earned its designation as a Community Development Financial Institution (CDFI) in early 2023.
Palmetto Citizens has doubled its assets over the past 10 years, and last year it earned $21 million, or 1.50% of its average assets. Its ROA was about the same in 2024.
Dozier said in 2024 that one of his goals was to increase the size of the credit union to exceed $2 billion in assets by 2028 or 2029. Part of that plan was the NCUA's approval last year to expand its charter to serve a wider area.
It turned out to be wider than the Midlands.
Palmetto Citizens announced last November it has agreed to buy four bank branches near Augusta, Ga., 75 miles southwest of Columbia. The seller, Southern Financial Corp. of Spartanburg, S.C., which operates Southern Bank, said it expects to net $2.8 million to $3.8 million.
The branches have the equivalent of 21 full-time employees serving 3,000 customers. They held about $83 million in deposits and $20 million in loans as of Sept. 30.
The credit union's purchase of the Georgia branches is awaiting NCUA approval, which Dozier hopes will happen this summer.
Dozier wouldn't say how much the credit union expects to pay for the branches. "We offered what we thought was a very fair, competitive bid. We weren't the only ones bidding on those."
Bank branch contractions are likely to put more branches up for sale.
Money doesn't seem to be the main obstacle to growth. The credit union had nearly $193 million in net worth at the end of last year – about 13% of its assets. For a credit union that hasn't added a branch in eight years, he said the key will be to develop a team that can open branches quickly and bring on new members smoothly.
"The opportunities will come our way if people know we can do it really well."
Contact Jim DuPlessis at Jim.DuPlessis@arc-network.com.
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