For Lenders, It's Game On
Some of the biggest U.S. banks are barging into their rivals' backyards, in a bare-knuckle bet that 2013 will bring a long-awaited rise in demand for loans.
Tennessee's capital of Nashville is one of many large U.S. cities where this battle for loans is escalating. The city is dominated by Bank of America and two big Southeastern lenders, SunTrust Banks Inc. and Regions Financial Corp., but is also coveted by outsiders such as J.P. Morgan and by numerous smaller players, including Pinnacle Bank, the largest local independent bank in Nashville.
J.P. Morgan executives said they can win business without poaching from others, but one local banker said it would be difficult to add market share any other way.
"The only way to grow loans is to take them away from someone else," said Terry Turner, chief executive of Pinnacle Bank's parent, Pinnacle Financial Partners Inc. "It creates great pricing pressure."
Pinnacle already has hired away one of the bankers who opened up the initial J.P. Morgan office. Mr. Turner, the bank's 57-year-old CEO, said he expects to increase Pinnacle's loans by 37% over a three-year period, to nearly $5 billion, by taking business from rivals. He has hired 14 new bankers in anticipation of that push.
"This is easily the most competitive loan market I have ever been in," said Mr. Turner, citing a combination of extended terms and low rates being offered to local companies.
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