VOL. 130 | NO. 87 | Tuesday, May 5, 2015
Pinnacle CEO Talks Memphis Plans in Wake of Acquisition
By Andy Meek
Flush from its newly announced acquisition of Magna Bank and the hire of a team from First Tennessee Bank, the newest entrant into the Memphis banking market already is looking down the road, planning more hires and a careful expansion of Magna’s existing footprint.
That’s according to Pinnacle Financial Partners CEO Terry Turner, who told The Daily News that Memphis has been in Pinnacle’s plans since the bank’s founding in 2000.
Turner was in Memphis visiting Magna in the wake of its acquisition announcement.
In terms of what’s still to come for the Bluff City, Turner’s answer could be summed up with two things: an expanded presence and more people.
“I think Kirk (Bailey) and his team will continue to hire more bankers,” Turner said. “Magna in my judgment is one of the best commercial real estate banks in this market. They’ve got a tremendous private banking group here, and we think we can add more people and resources there.
Turner also said Memphis can expect more Pinnacle locations.
“Our bank is not going to come in here and build out 50 branch offices,” he said. “But I do expect over time we’ll add at a pace of maybe one a year for several years to increase physical distribution.”
Last week, Turner’s Nashville-based financial institution announced that a deal had been reached for the $6.3 billion Pinnacle to acquire Magna via a merger that’s expected to close in the fourth quarter. As part of the deal, Pinnacle would get an immediate footprint in the form of Magna’s five existing local branches, spread among Germantown, Cordova and Memphis. All five will become Pinnacle locations once the merger is complete.
Coincidentally, Pinnacle announced its deal – and that it had lifted eight banking veterans from First Tennessee – the day before the latter’s annual meeting in Memphis.
Not that the biggest bank based in the state should worry about Pinnacle supplanting its dominance of the customer market share ranking in its home market. Kevin Reynolds, a bank analyst with Wunderlich Securities, thinks it’s “highly unlikely” Pinnacle gets even with, let alone, overtakes First Tennessee.
“I suspect that, over time, Memphis market share could look something like Nashville, where Pinnacle makes it into the top five, but First Tennessee is such a strong franchise in Memphis that I don't think it will be the biggest donor of market share,” Reynolds said. “Remember, SunTrust, Regions and Bank of America are all in the top five (in Memphis), and they are nowhere near as strong locally as First Tennessee.”
Instead, other bankers say, Pinnacle could pose more of a competitive threat to the smaller community banks that dominate the customer deposit market share rankings locally. That list is populated with scores of banks like Triumph Bank, Paragon Bank and others, which operate a handful of branches that offer similar products and compete on service.
And Pinnacle isn’t finished grabbing bankers from other institutions locally as it continues to staff up in Memphis.
“I view us to be active recruiters of people,” Turner said. “It’s an important discipline in our company. We target highly experienced bankers who have great reputations and control lots of clients. That’s where we spend our recruiting energy.”