Even as bank consolidation reduces the number of U.S. banks, Chattanooga continues to attract the interest of regional banks eager to tap into the area’s growing economy. Despite the pandemic and near record-low interest rate yields, deposits in Chattanooga’s commercial banks last year swelled to a record $12.1 billion as of June 30, according to the Federal Deposit Insurance Corp.
“Chattanooga has been a reasonably healthy financial market, and I don’t see any slowdown in the number of financial institutions trying to break into the market,” says Jim Vaughn, market president for Truist Bank in Chattanooga, which was created in 2019 by the merger of SunTrust and BB&T. “The Chattanooga market, in general, has been very resilient. A lot of our companies are pivoting and changing their models to adapt, and in doing so, they are benefiting by some of these changes and softening the blow from this pandemic.”
Chattanoogans curtailed their spending and used their share of federal stimulus funds to collectively put away more than $2 billion of additional deposits in their bank accounts last spring, boosting bank deposits in the six-county metro area by nearly 12% from a year earlier.
Across Tennessee, bank deposits grew even faster than in Chattanooga, rising by nearly 20.5% to top $193.1 billion.
Colin Barrett, president of the Tennessee Bankers Association, says the June 30, 2020, figures reflect both the influx of nearly $9 billion of Paycheck Protection Program loans from banks to small businesses last spring, plus moves by many businesses to initially preserve cash and limit spending when the pandemic hit.