Next up for Pinnacle Bank: Double down in Tennessee's big cities

Next up for Pinnacle Bank: Double down in Tennessee's big cities

September 09, 2015

As far as Terry Turner is concerned, Pinnacle Bank isn’t planning to take its model across state lines – at least, not for the foreseeable future.

Nashville’s largest locally based bank is fresh off its second acquisition of the year, which brings Memphis’ Magna Bank into the fold. Alongside Pinnacle’s purchase of CapitalMark Bank & Trust in Chattanooga, Pinnacle now has more than $8.2 billion in assets, second only to First Tennessee Bank when it comes to banks headquartered in the state. The two purchases have added more than $1.5 billion in assets to Pinnacle's balance sheet.

Turner told me earlier today the bank will continue to look at acquisition opportunities – just ones in its existing markets: Nashville, Memphis, Chattanooga and Knoxville.

“I don’t see us doing deals for out-of-market expansion,” Turner said. “I think there’s a chance for us to do in market deals to expand our presence where we are.”

Turner’s comments are telling. They echo what he had been saying earlier this year ahead of Pinnacle inking its nearly $200 million acquisition of CapitalMark and its more than $80 million purchase of Magna. Those deals won’t trigger a buying spree to expand Pinnacle’s geographic footprint into new Southeast markets, Turner said. The bank wants to focus its resources on markets where it can hold a great bit of the market share, rather than spread its investments “a mile wide and an inch deep,” Turner told me.

But it’s clear: Pinnacle remains an active buyer for banks in Tennessee’s large urban markets, including Nashville.

“Our belief is that if we build the dominant franchise in these urban markets, we’ll provide value to shareholders,” Turner said. “We think you build value when you control valuable markets. We’re not trying to be everything in Tennessee. We’re not trying to everything in the Southeast. We’re very focused and trying to have the top franchise in the four biggest urban markets in Tennessee.”

Here’s more from my conversation with Turner, where he talks growth plans, potential pressure to sell the bank and how the bank is approaching the $10 billion in assets mark (an issue we’ve previously covered):

NBJ: Now that you’ve completed these two deals in Memphis and Chattanooga, what’s the growth strategy moving forward?

"[In Memphis and Chattanooga] we intend to do really the same thing we’ve done in Nashville and Knoxville, hiring great bankers in those markets and getting a robust recruiting pipeline. We’ll go about our standard organic growth strategy to hire the best bankers in the market and get them to move their business to us. Our stock continues to be [trade highly] ... to book value. That makes doing acquisitions more attractive to sellers and easier for us to do deals. We’re primarily an organic grower, but it’s hard to imagine we won’t do more deals. I don’t see us doing deals for out-of-market expansion. I think there’s a chance for us to do in-market deals to expand our presence where we are."

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