By David Dykes

   John Windley Knows Banking. So when he talks of industry changes and more growth in South Carolina, it’s worth listening.

With more than 40 years of experience, Windley, chief banking officer of Columbia-based South State Corp. and president and CEO of South State Bank, says technology is dramatically changing the retail side of the business.

Still, he sees a big upside for South State.

The bank is focused on staying ahead on technology and remains “relationship-oriented” in commercial lending, Windley says. It has built a significant wealth presence with $5.4 billion in assets under management. And the bank is building franchise value through mortgage lending, ranking among the top lenders in the state.

Windley is among bankers who believe financial institutions will gain regulatory relief under the Trump administration. However, higher short-term interest rate costs could crimp corporate borrowing. And higher interest rates could throw a curve ball to mortgage lending.

“We haven’t seen it yet,” Windley said in late March, speaking of a slowdown. South Carolina is benefitting from a healthy real-estate environment, particularly in Greenville and Charleston, and from in-migration of people to the state’s coastal areas, he says.

South State Bank is South State Corp.’s wholly owned subsidiary. As of Dec. 31, the bank, which operates in South and North Carolina, Georgia, and Virginia, had approximately $14.5 billion in assets, $10.6 billion in loans, $11.5 billion in deposits, $2.3 billion in shareholders’ equity, and a market capitalization of about $3.2 billion.

South State officials, in a recent regulatory filing, acknowledged substantial competition “in all areas” of operations “from a variety of different competitors, both within and beyond our principal markets, many of which are larger and may have more financial resources.”

Competitors include national, super-regional, and internet banks as well as savings and loans, credit unions, finance companies, brokerage firms, and insurance companies.

“The financial services industry could become even more competitive as a result of legislative and regulatory changes and continued consolidation,” bank officials said in the filing. “In addition, as customer preferences and expectations continue to evolve, technology has lowered barriers to entry and made it possible for nonbanks to offer products and services traditionally provided by banks, such as automatic transfer and automatic payment systems.”

Windley is undaunted.

One reason is the strength of the state’s and region’s economies.

The Federal Reserve Bank of Richmond said in March the region’s economy had expanded at a moderate pace. A South Carolina copper parts manufacturer, for example, noted increased sales in both foreign and domestic markets. A packaging manufacturer in the state began to increase capital investment in anticipation of higher interest rates.

South State has bought 10 financial institutions in the last decade and exceeded $10 billion in total assets with the $435.1 million acquisition of Augusta, Ga.-based Southeastern Bank Financial Corp. in January 2017.

That means South State, starting perhaps in the second quarter this year, will be required, among other things, to perform an annual stress test and establish a dedicated risk committee of its board of directors responsible for overseeing its enterprise-wide risk management policies.

Last November, the company acquired Charlotte-based Park Sterling Corp., the holding company for Park Sterling Bank, for $693 million. As a result, South State added 53 locations to its footprint, including five offices in Georgia, 23 in South Carolina, 17 in North Carolina, and eight in Virginia.

South State ranked fifth in South Carolina deposit market share as of June 30, 2017, according to the most recent Federal Deposit Insurance Corp. data. The bank, with a 7.2 percent share, trailed its big-boy brethren Wells Fargo, Bank of America, BB&T, and First Citizens.

Park Sterling had ranked 15th with less than 1 percent market share.

Windley expects his bankers to be in the top five in market share everywhere South State is located.

Windley joined the bank in 2002 as Upstate regional president. In 2006, he was promoted to president. In 2016, he was also named CEO.

He started his career in 1976 with C&S Bank, which evolved into Bank of America. He has worked across the state, including two banking stints each in Greenville, Spartanburg, and Columbia.

A North Carolina native, Windley earned a bachelor’s degree from Wofford College and is a graduate of the Louisiana State University Banking School of the South.

South State’s stock price has reflected investor enthusiasm for what he and his team have done.

Shares, under the symbol SSB on the Nasdaq Global Select Market, traded for $94.50 in the fourth quarter of 2017. That compared with $59.19 in the first quarter of 2016.

“What we’re encouraged by is the folks that have invested in our company are players that see the value of what we’re building,” Windley says.