), South Carolina's largest independent commercial bank, has been clicking higher--from 13 a share in March to 19 on July 18. One reason: TSFG, with 94 locations in the Carolinas and Florida, is focusing on boosting earnings rather than growth by acquisition. But there's also takeover talk.
"While we don't believe takeover speculation is a strong reason for investors to acquire TSFG, and while TSFG has given no indication that it wants to sell itself, we cannot overlook the attractiveness of TSFG to banks with a presence already in South Carolina," says Michael Diana of Salomon Smith Barney.
Since 1986, many South Carolina banks have been swallowed by out-of-state outfits such as Bank of America and First Union. So executives who left the acquired banks banded together to create an independent institution--Carolina First, later renamed South Financial Group, to serve South Carolina. But chances are TSFG will also be acquired. Possible buyers: BB&T, a North Carolina holding company; Synovus Financial of Georgia, with 38 branches in four Southern states; and National Commerce Bancorp., with assets of $16.5 billion. A combined BB&T-TSFG, says Diana, would have a 19.2% market share of South Carolina's total deposits. Wachovia will be No. 1, with 21%, if its merger with First Union goes through. If Synovus buys TSFG, the combined entity would tie for No. 2 with Bank of America. A National Commerce-TSFG bank would place it third. "Talks are going on," says a banker, who values TSFG at 30. By Gene G. Marcial