VOL. 131 | NO. 256 | Monday, December 26, 2016
2016: Not Too Many Banking Industry Surprises
By Andy Meek
When shareholders of First Tennessee Bank’s Memphis-based parent company convened in April at the bank’s Downtown Memphis headquarters for their annual meeting, the whole thing wrapped up in about 10 minutes.
Banks like First Tennessee enjoyed a pretty straightforward, business-as-usual 2016. It was a year of recovery from the economy's bust years and laying the groundwork for more progress to come.
(Daily News File/Andrew J. Breig)
That’s as good a metaphor as any for the state of banking in Memphis in 2016. Not that there weren’t newsworthy moments, big deals, major personnel shakeups and additions, and other headline-grabbing fare.
But on the whole, the industry proceeded a little like that shareholder meeting. Workman-like, not much fuss, not too hot or cold.
Speaking of First Tennessee, it locked arms with Tri-State Bank – one of only a few black-owned banks in the country – by purchasing 88,000 shares of Tri-State preferred stock for $1.5 million. That was part of a flurry of big headlines this year around Tri-State, including the bank’s announcement of its plan to sell its Downtown headquarters at 180 S. Main St. to Belz Investco GP in a $3 million deal.
Board chairman Lucy Shaw told The Daily News the bank also wants to pursue a somewhat more expansive agenda.
Dr. J.E. Walker and his son, A. Maceo Walker, founded Tri-State after World War II. The elder Walker had also founded Universal Life Insurance Co. in 1923, which along with Tri-State was a pillar of black finance and capital in Memphis.
“We want to be here for everybody,” Shaw said. “In the past, we were niche by color, and we really want to shed that as our identity – without leaving our past behind.”
2016 was indeed a year for trying new things. Banks like Regions opened new branches that look a lot different from the traditional, garden-variety bank branch of the past.
Take Regions’ new branch at 88 Union Ave. that held its grand opening in March. That 3,500-square-foot location opened its doors to reveal a modern, open layout – minus the traditional teller line.
Replacing “teller row” – something that’s become increasingly the norm at branches around the city – is the presence of so-called universal bankers. Those are employees trained to handle almost any need a customer walks up to them with, which facilitates more of a personal touch-style of banking as opposed to the transactional nature of teller lines.
BancorpSouth’s new branch at 40 N. Pauline Ave. that opened earlier this year is another example, among many others, of a location that employs that model.
Other banking highlights and trends of the year included:
• The arrival of new bank branches in the resurgent Memphis Medical District. Institutions like Iberiabank and BancorpSouth planted new locations there this year, as did Orion Federal Credit Union.
• Pinnacle Financial Partners expanded its Memphis ranks at a steady clip this year, in addition to announcing a new $20 million office development that will house the bank’s new Memphis headquarters. It will open in the fall of 2017. That new Class A office building at 949 Shady Grove Road is new first new multi-tenant Class A office building to be developed in Memphis since 2008. And Pinnacle’s space will include touches like two remote drive-through banking lanes, a drive-up ATM, conference rooms and more.
• The parent company of Renasant Bank kicked off a common stock offering. John Oxford, the bank’s director of corporate communications, said it was partly in response to the favorable climate made possible by things like the bank’s shares trading at 30 percent above their all-time high since the election.
• Metropolitan Bank is looking to add new talent as well as M&A opportunities. That’s according to a letter the bank distributed to shareholders earlier this year.
And M&A was a topic put to audience members listening to a presentation about First Tennessee’s parent company at the 2016 Barclays Global Financial Services Conference.
The presenter was Bryan Jordan, the chairman, president and CEO of First Tennessee parent First Horizon National Corp. After being polled by a questioner, most audience members said they thought First Horizon will either sell itself to a larger bank in a few years or enter into a merger of equals.
For his part, Jordan offered during his remarks: “We’ve positioned the company to be sustainable for the long term.”