Pinnacle Financial Partners Inc. in Nashville is planning an expansion into the Knoxville market and has selected two SunTrust Banks Inc. executives to lead that effort.
The $2.1 billion-asset company announced Monday that it intends to open a loan production office in Knoxville this year, and that its goal is to have five branches there by the end of 2010.
M. Terry Turner, Pinnacle's president and chief executive officer, said during a conference call Monday that his seven-year-old company has been stealing market share from larger banking companies in Nashville and would aim to do the same in Knoxville.
First Horizon National Corp. of Memphis, SunTrust, and Regions Financial Corp. of Birmingham, Ala., control more than half of the $10.1 billion Knoxville deposit market.
"We've been successful as a start-up bank in Nashville and are confident that we have the opportunity to replicate this same model for success in Knoxville," he said.
To spearhead the expansion initiative, Pinnacle has hired two local bankers, Nathan Hunter and Mike DiStefano, with a combined five decades of experience in the market, most recently at SunTrust. Mr. Hunter was an executive vice president in charge of the Knoxville retail business for the Atlanta company, and Mr. DiStefano had been a commercial banker.
Pinnacle plans to open the loan production office in north Knoxville in the summer and hopes to have five full-service branches in the market by the end of 2010. Mr. Turner said that it expects to have 26 associates in Knoxville by yearend, and that it would target the "most expensive, most experienced bankers in the market" with no fewer than 10 years of experience.
Knoxville's population is expected to grow 11% by 2011, to more than 712,000. Its unemployment rate of 3.3% remains well below the national average of 4.6%. Given these demographics, Pinnacle is predicting it will have more than $500 million of assets in Knoxville within five years.
Its assets have increased an average of 66% a year over the last five years, and it has been steadily been gaining share in the Nashville market. According to Federal Deposit Insurance Corp. data, it had the sixth-largest deposit share there, 5.34%, as of June 30, versus 0.43% five years earlier.
J. Corey Shipman, an analyst at Stanford Financial Group, said that Pinnacle's "phenomenal growth" has come "largely from taking business away" from some larger companies in the region.
"Pinnacle has done it in Nashville. There's no reason to think they can't do it in Knoxville," Mr. Shipman said
The possibility of expanding into Knoxville has been on the table at Pinnacle for a long time, he said. "By making it now, they're telling me that they have the right people, and this will be a successful move."
