Though still struggling in an economic climate that has yet to bounce back, things are beginning to look up for the Tennessee banking industry, analysts say.
“It’s been a challenge, I think, from one end of the state to the other,” said Brad Barrett, president of the Tennessee Bankers Association. “Everyone has faced their own set of challenges. I think some good news is the fact that first quarter performance by Tennessee banks was an improvement over performance last year.”
Just 18 percent of banks were unprofitable in the first quarter of 2010, Mr. Barrett said, a decrease from last year’s roughly one-third that were losing money.
Though he said that number doesn’t indicate success necessarily, it is “a sign that maybe the economy is starting to perk up a little bit.”
And part of that perk could include new names in banking popping up in the area.
Glen Kelley, Wells Fargo community bank president for greater North Georgia, said though the company never discusses future plans, it is always exploring new opportunities for growth.
Wells Fargo acquired Wachovia, which has a strong presence in North Georgia, more than a year and a half ago and has steadily been adding staff across the Southeast, Mr. Kelley said.
That’s a move that could be beneficial for a company that relies heavily on its California-based assets, said Dr. Paul Irvine, an associate professor of banking and finance at the University of Georgia. The company’s challenge as it moves forward is dealing with the unhealthy assets it still owns and searching for an area with high loan demand, he said.
Wells Fargo Advisors, a financial advising service that is one of the many businesses under the Wells Fargo umbrella, has one branch in Chattanooga. Company spokeswoman Teresa Dougherty said though its presence here is minimal, it’s important for it to be “in every state and every city that has a sizable population with people who need investing advice.”
Wells Fargo is still a new name in the Tennessee banking scene, with Wachovia entering the Memphis and Nashville markets when it merged with SouthTrust in 2004, said Jamie Dexter, a Wells Fargo spokeswoman.
But for banks with strongholds in the state, attention is being turned to fighting the results of high unemployment levels, Mr. Barrett said.
“People are still having difficulty making their home payments and their loan payments,” he said. “And that’s going to be a challenge as long as unemployment remains high.”
ABOUT SUNTRUST
With a strong presence in the Chattanooga area, SunTrust Banks reported positive first-quarter results, with improved asset quality and a decrease in credit-related costs.
The Atlanta-based bank is one of the country’s largest financial services holding companies, with $171.8 billion in total assets as of March 31.
Retail branches are scattered throughout the Southeast, and nearly 30 are located in the Chattanooga area.
SunTrust is continuing to weather the economic climate, as other banks throughout the nation are, but its leaders say operating trends are positioning the company to hurdle past uncertain obstacles.
“We certainly see some of the negative impact of the nationwide recession,” said Michael Butler, president for the Eastern Tennessee region. “The impact hasn’t been as deep in this part of the country as it has been in others….It’s an area that hadn’t experienced the sharp up and down cycles.”
Mr. Butler said he sees a bright future for the bank in the Chattanooga region, where recently a branch location opened in Ooltewah — a testament that the company is investing in the market, he said.
“We’re excited about our prospects for success,” he said.
Compiled by Brittany Cofer
ABOUT FIRST TENNESSEE
As the largest bank headquartered in the state, First Tennessee Bank is also the oldest name in the Chattanooga banking scene.
“This part of the state is to our advantage,” said Frank Schriner, president of First Tennessee’s Southeast market. “We have seen more activity here than in any other part of the state. This is a great place to be right now.”
First Horizon National Corp., First Tennessee’s parent company, decreased its loan loss provision for the fourth consecutive quarter in the first quarter of this year, from $135 million in the fourth quarter of 2009 to $105 million.
Mr. Schriner said the bank is keeping a watchful eye on the economy, which is steadily improving, and it’s taking measures to prepare for when the turnaround is complete.
“We have been on a very aggressive mode this year of hiring the best talent in the market right now,” he said. “We are fully staffed up and ready for this economy to make a big turn for the better. We’re not expecting the worst, we’re expecting the best.”
Compiled by Brittany Cofer
ABOUT REGIONS BANK
Accounts and deposits continue to grow for Regions Bank, but the company still is dealing with the after effects of a sluggish loan market, officials say.
Loan demand is down across the country, but Regions, ranked third nationally in small business lending by the Small Business Association, considers itself an active lender to businesses and consumers, with new or renewed loan commitments totaling about $11.6 billion for the first quarter.
“We grew our household selling measure approximately 11 percent in this market last year,” said Michael Mathis, Regions Bank city president. “So really, Regions, through the downturn, has been viewed as a place of stability for consumers.”
This year, Tennesseans will begin to see new image-enabled ATMs that will allow customers to make deposits at all hours without using deposit slips.
For now, said company spokeswoman Evelyn Mitchell, the ATMs are slated just for the Nashville and Memphis markets, but Regions eventually plans to transition all of its ATMs, which would include those in the Chattanooga market.
Compiled by Brittany Cofer