The largest bank headquartered in Nashville says it’s ready to return to the residential and commercial development business. In the years since the housing crisis, Pinnacle Financial has done everything it could to get out of bad loans to developers.
On a quarterly call with analysts and investors, Pinnacle CEO Terry Turner said the bank has seen the bottom on construction loans. Pinnacle was particularly hard-hit by loans to developers that have gone unpaid. But Turner says the tide has turned.
“We’re now transitioning from balance sheet rehabilitation to high performance and season of rapid organic growth opportunities that we now believe exist for us.”
Turner also checked another big item off the bank’s to-do list in the most recent quarter. Pinnacle finally paid back in full the U.S. Treasury for bailout funds it received during the financial crisis, though it had to borrow $25 million to do so.
Pinnacle defended its announcement last month that it wants to trade in its federal regulator for state-based oversight. Turner said it should benefit the bank’s bottom line.
A state charter means that instead of being regulated from Washington, the Tennessee Department of Financial Institutions would be the primary regulator. And until this year, the state’s commissioner over banks had one of the best track records for staving off bank failures.
Turner said unlike national regulators, state officials take a more holistic view of banking.
“I’m convinced that this approach of concern for both the soundness of the banking system and the health of the economy is one of the reasons that Tennessee has had so relatively few bank failures and an economy that has rebounded more quickly than that of the nation.”
Turner says changing regulators will go virtually unnoticed to Pinnacle customers, but he says it should help the bank become more valuable to investors.
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