Several banking industry leaders who have spoken with The Daily News in recent days have said banking in Memphis is seeing a lot of institutions simply taking market share from each other, as opposed to organic growth in the marketplace.
That’s changing a little, according to Magna Bank chairman, president and CEO Kirk Bailey.
“It’s been guerrilla warfare the last two, three and four years trying to find good loans (to do), and in many good loans you’re taking something away from another bank when you do the loan,” Bailey said. “Having said that, we are starting to find more business again in the city and in the region that’s helped our loan growth a little bit.”
In fact, Magna is growing again and depending on how the fourth quarter shakes out, Bailey already is estimating that on a net income basis 2012 will go down as either Magna’s best or second-best year ever. That comes as Magna celebrated its fifth birthday this year.
Magna initially opened in 1999 as First Trust Bank and started out as mainly a real estate lender and seller of certificates of deposit. The bank’s leadership in 2005 decided they wanted to change course slightly.
The name was changed to Magna in 2007.
A few months ago, Magna’s presence as a community-focused lender in Memphis was underscored with word that the U.S. Small Business Administration recognized the institution as Community Bank of the Year in Tennessee because of its SBA lending activity, as ranked by dollar value.
“When we look at year to date versus year to date last year, we’re pleased with our balance sheet growth,” Bailey said. “It’s not off the charts, but it’s – these are good numbers. Our loan portfolio is up 9 percent. Our deposits are up 7 percent and our assets are up 8 percent. Those aren’t showstopper numbers, but they’re good solid growth numbers across the board. We like the credit quality we’re getting on the loan side, and most of the growth on the deposit side is in transaction accounts, which is what we want.”
Magna’s available services and business lines have grown in recent years to include SBA lending, private banking, commercial banking and more. Bailey tipped his hat to Magna’s employees, saying it’s a very lean and efficient operation – “adequately staffed, but not overly staffed.”
“This is a difficult market,” Bailey said. “Memphis is difficult in some respects, because there’s not a lot of organic growth in the marketplace, so growing your balance sheet is a challenge for all community banks.
“Having said that, everybody here is watching their expenses carefully. So the net effect of that is year over year, our net income is up 14 percent. And that’s good, solid balance sheet growth.”