Greene County Bancshares Inc. was an also-ran in Tennessee when it opened its first metropolitan branch in Knoxville 14 months ago, with modest growth plans that called for adding a couple of branches a year.
Those days are now a memory. What were the state's No. 1 and No. 3 banks have since been acquired, and what is now the largest, the $27.3 billion-asset First Horizon National Corp. of Memphis, is concentrating on expansion elsewhere.
As a result, Greene County is suddenly attracting a lot of attention. The $1.2 billion-asset bank, now the second-largest based in Tennessee, hopes to take advantage of the newfound prominence to accelerate growth. It envisions becoming a multibillion-dollar bank with operations throughout the Volunteer State.
"Five years ago we could have never imagined all this opportunity, but we have really been the beneficiary of the dramatic changes in Tennessee," said Stan Puckett, Greene County's chairman and chief executive officer.
Greene County had loan growth of 5% in the fourth quarter, to over $1 billion; deposits rose 12%, to $998 million. Much of that increase came from customers defecting from larger banks.
The company also bought three branches from SunTrust Banks Inc. of Atlanta, which had to divest them with its acquisition of National Commerce Financial Corp. in Memphis.
Market disruption in Tennessee has led Greene County to hasten its buildup in Knoxville and to move into Nashville, where it opened a branch in November. It intends to concentrate on growing in and around those two cities, adding two branches in Knoxville and two or three in Nashville this year.
Bankers who worked at Birmingham, Ala.-based Regions Financial Corp., which bought Union Planters Corp. of Memphis in June, are spearheading the growth. Larry Lovelace, the head of Regions' Nashville banking operation, joined Greene County in September, and the head of Region's Knoxville market and 13 other senior employees came with him.
Mr. Puckett expects to hire more people from Regions and other giants in the near future. "Whether it's people from Regions that make the move or people from SunTrust or another big bank, I think they will see what we are doing and want to take advantage of that," he said.
In addition to bankers, potential sellers are eyeing Greene County. Mr. Puckett said a number of them have contacted him in recent months. "Three or four years ago we were not getting many chances at all at these opportunities," he said.
Greene County is looking for a bank in the asset range of $100 million to $300 million in or near one of the state's metropolitan areas, and is most interested in Chattanooga, Mr. Puckett said. Moving into Memphis is not on the immediate horizon but could be a consideration within a few years, he said.
Jason Warner, an analyst with Howe Barnes Investments in Chicago, said he expects it to remain conservative in making deals.
Greene County's most recent acquisition was of the $172 million-asset Independent Bankshares Corp. of Gallatin for $30 million in November 2003. That was its first acquisition since buying a tiny bank in eastern Tennessee for $3.1 million in 1995.
For its first 104 years, Greene County, which focuses on small-business lending and consumer deposits, stayed in its namesake county in northeast Tennessee. In 1994 it decided to branch out into other eastern counties.
Rather than change its name or add new charters, Greene County decided to create different brands for each new market it entered. As a result, its banking subsidiary uses 17 names and logos. All of them include the tag "a Greene County bank."
The strategy is more efficient than having 17 charters, said Mr. Warner at Howe Barnes, but it may begin to hurt the bank as it expands.
"It gives them a hometown-bank feel, but the negative is that they do not develop a strong statewide brand," he said.
Mr. Puckett said he plans to continue using individual brands for new markets.
"They reflect our style of local decision-making and local autonomy, and reinforce that we are truly a community bank."
