The CEO of First Tennessee Bank’s parent company told attendees of a financial conference in New York City in recent days that the banking industry could benefit from more consolidation.

Kind of like First Tennessee’s pending acquisition of Charlotte, North Carolina-based Capital Bank Financial Corp. in a $2.2 billion deal that will create the fourth-largest regional bank in the Southeast.

Bryan Jordan

“I think a more rational industry results from consolidation,” First Horizon National Corp. CEO Bryan Jordan said during the 2017 Barclays Global Financial Services Conference. “It’s almost a necessity for the industry over time, mainly because of just the cost required to maintain table stakes in technology or in compliance, those kinds of things.

“I think it would benefit us as an industry to have more consistent, and in some ways, rational competition. Too much capacity at times drives behaviors that are less than desirable.”

Consolidation is certainly changing the Memphis banking market. Nashville-based Pinnacle Bank entered the Memphis market in 2015 by buying Magna Bank, and it’s now consistently ranked among the top three mortgage lenders in the Memphis area.

First Tennessee, meanwhile, had a little more than $29 billion in assets in the second quarter, according to the latest figures from the Federal Reserve Bank of St. Louis. After the Capital Bank deal is complete in the fourth quarter, the combined organization will have about $40 billion in assets – making what was already the far and away largest bank in the local market even larger.

First Tennessee’s parent company got almost $2 billion larger in the second quarter, according to the Fed numbers, growing from $27.3 billion in assets in the prior-year second quarter to $29.1 billion. For context around how dominant the organization is in the Memphis banking market, that $29.1 billion represents the lion’s share of the total asset size of the entire market here – $36.5 billion.

The Fed numbers, meanwhile, also show improvement across several other key categories during the quarter for First Tennessee. The bank’s efficiency ratio during the quarter, for example, improved from the year-ago quarter, from 68.04 percent to 64.95 percent.

That metric is calculated by dividing expenses by total revenue, and with a figure of 64.95 percent that means the bank spends almost 65 cents to make every dollar.

The bank’s total loans are also up. Over the two second-quarter periods, the Fed numbers show, they grew from $18.7 billion to $20.4 billion.

Analysts increasingly like the position the Memphis bank finds itself in. A Zacks Equity Research note Sept. 18 pointed out that with about $29 billion in assets, “First Horizon’s strengths include organic and inorganic growth strategies, cost control and strong liquidity position.”

At least right now, the overall market feels to Jordan a little like it has every year at this time for the last few years.

“We’ve seen pretty steady loan trends,” he said. “We came into the quarter with very good pipelines, maybe at historic highs. We’ve (also) seen continued improvement in our credit quality trends, and we think there’s a good likelihood that continues for the foreseeable future.”

Summing it all up, as Jordan sees it there’s plenty for a bank executive like him to be satisfied with at the moment. In his judgment, the economy is doing better, borrowers are optimistic and in general they’re doing better than they were at this time last year.