The total deposits in the 27 banks with operations in the Chattanooga area rose by 5.1 percent last year to $9.7 billion. The biggest banks by deposits in metro Chattanooga in 2017 were:
1. First Tennessee, $2.48 billion, up 7.4 percent from a year ago
2. SunTrust, $1.69 billion, no change from previous year
3. Regions, $1.28 billion, up 6.8 percent from previous year
4. Pinnacle, $648.5 million, up 5.4 percent from previous year
5. First Volunteer, $456.2 million, up 6.1 percent from the previous year
6. Bank of America, $439.5 million, up 7.9 percent from the previous year
7. FirstBank, $336.3 million, up 4.2 percent from the previous year
8. Citizens Tri-County Bank, $333.9 million, up 7.9 percent from the previous year
9. SmartBank, $301.3 million, down 4.1 percent from the previous year
10. The Bank of LaFayette, $208.5 million, up 2.3 percent from the previous year.
Source: Federal Deposit Insurance Corp. call reports as of June 30, 2017 compared with June 30, 2016.
The bank branch in your neighborhood or close to where you work may not be there any longer.
As digital technology and mobile banking transform the way consumers transact their financial business, banks are relying more on mobile services and less on bricks-and-mortar facilities.
At its peak in 2009, Chattanooga banks operated 179 branches. By last year, even with new banks entering the market, the total number of branches in metro Chattanooga had shrunk by nearly 18 percent to 147 office locations and experts expect more banks will close branches, although other bank offices are still expected in high-growth areas.
Antony Jenkins, a former CEO of Barclays bank, has predicted that another 20 to 50 percent of bank branches may close in the next decade as banks respond to customer demands for automation and cheaper services.
"I have no doubt that the financial industry will face a series of Uber moments," he says, referring to the way that Uber and other ride-hailing companies have rapidly unsettled the taxi industry.
But banks in Chattanooga are still growing and, in most instances, were more profitable last year with gains in deposits and loans. And while banks are limiting some of their physical retail networks and consolidating operations, there are still new entrants in the market and the region's biggest credit union is still adding offices.
Last year, bank deposits in metro Chattanooga grew by nearly $500 million in the biggest gain in deposits in three years.
"We continue to see good loan demand as the economy improves," SunTrust Bank Market Leader J.V. Vaughn says.
First Tennessee Bank, the biggest bank in Chattanooga, reported a 17 percent jump in first quarter profits this year across its footprint in Tennessee and North Carolina, including Chattanooga.
"This is an exciting time for First Tennessee and we continue to be so grateful for the trust our customers have placed in us," First Tennessee Market President Jeff Jackson says.
First Tennessee and SunTrust are the biggest banks in Chattanooga and together the two banks have closed nearly a dozen bank branches from the peak a decade ago.
Growth and consolidation
The Chattanooga banking market also consolidated more in the past year with SmartBank's purchase of Southern Community Bank in April. Southern Community Banks will take on the SmartBank name by August as the two banks combine and the overlapping downtown branches are consolidated.
"As an organization, we continue to improve on our efficiency as we capture further economies of scale," SmartBank CEO Billy Carroll says in reporting record net income in the first quarter, more than double what it earned a year ago.
Even with the merger, 26 banks still operate full-service banks in metropolitan Chattanooga and others are entering the market. In 2017, Southern Heritage Bank, based in Cleveland, Tennessee, opened the first of several branches it plans in Hamilton County. Another bank, Reliant Bank based in Franklin, Tennessee, opened a loan origination office in Chattanooga in 2017 with plans to eventually add a full-service bank in Chattanooga.
"We love this market and see it as a real area of growth," Jeff Agee, CEO of Southern Heritage's parent company, First Citizens National Bank, said last fall when the bank expanded into the metro Chattanooga market.
Growing more branches
Although most financial institutions are pruning their branches, some are still expanding. Tennessee Valley Federal Credit Union (TVFCU), Chattanooga's biggest credit union which relocated its headquarters into a larger downtown facility on Chestnut Street in early 2018, has expanded its branch network to 17 branches, including the addition of three interactive teller machines in local grocery stores.
"A lot of people still want to go to a branch and talk with real people and I think our growth demonstrates that," TVFCU President Todd Fortner says. In 2017, the credit union added more than 8,000 members, topping 133,000 members and $1.3 billion in assets for the first time.
Pinnacle Bank, the Nashville-based bank that acquired CapitalMark in Chattanooga in 2015, opened a second office in Chattanooga last summer on Shallowford Road. But even with only two Chattanooga offices, Pinnacle is the fourth biggest bank in the market and last year grew its loan volume in the Chattanooga by nearly 35 percent to top $1 billion for the first time.
"We've built our business on being easy to deal with, and we've also created a bank that is a great place to work, " says Craig Holley, market chairman for Pinnacle in Chattanooga who helped start CapitalMark Bank in 2007. "We've also benefited by hiring experienced bankers and giving them the ability to work with their clients."
The leadership team at Pinnacle has more than a century of banking experience and includes Holley, a former market president for AmSouth Bank; Kenny Dyer, a former president of Pioneer for First American Bank, and Ryan Murphy, a former executive vice president of CapitalMark.
Pinnacle has only a fraction of the number of offices of other Tennessee banks for its size, but the bank has expanded the number of revenue producers in Chattanooga by 16 persons, or nearly 50 percent, since buying CapitalMark three years ago.
"With today's mobile technology, we can provide more services without so many branches," Holley says. "But having the right people and the right products is still critical for success."