Chattanooga’s fastest growing bank gets new name, plans more branches

When Allison Roberson joined CapitalMark as its third employee in 2006, her desk was at a folding table in a makeshift office in the former Republic Centre where two other bank organizers were doing the paperwork and fundraising to open the bank the next year.

A decade later, Roberson pulled the strings Monday to unveil a new name above what is now Chattanooga’s fastest growing bank owned by Tennessee’s second biggest bank holding company.

As of Monday, CapitalMark became Pinnacle Bank following a weekend conversion of everything from customer debit cards and back office software to business cards and corporate logos.

“There were a thousand little things involved in a change like this and they all went remarkably well to get us to this point,” said Craig Holley, the former CEO of CapitalMark who is now chairman of the Pinnacle Bank in Chattanooga.

One of the biggest challenges came for Roberson trying to remove the old CapitalMark banner from the new Pinnacle sign at the bank’s downtown office at 8th and Broad Street during a morning ceremony where nearly 100 employees, shareholders and clients gathered to celebrate the new name. The banner with the old name clung to the “L” in Pinnacle before bank workers climbed a ladder to fully reveal the new bank identity.

The slowdown in the sign change during Monday’s ceremony was one of the few setbacks in the growth of both CapitalMark, which grew to nearly $1 billion in assets with only four offices in nine years, or Pinnacle Financial Partners, which has grown in only a decade and a half to the second biggest banking firm in Tennessee (behind only First Tennessee) and one of the highest valued banks of its size in the country.

Pinnacle, which trades at nearly three times its book value because of its strong growth and earnings record, bought both Capital- Mark in Chattanooga and Magna Bank in Memphis last year to give the Nashville-based bank one of the top market positions in each of the four biggest metro areas of the state. Pinnacle now has assets of $8.7 billion and company CEO Terry Turner said Pinnacle wants to soon grow to $15 billion in assets by gaining dominant positions in each of Tennessee’s major markets.

“Our strategy is to be a foot wide and a yard deep and really control these markets,” he said. “If we’re successful in becoming a $15 billion [asset] bank, we think we’ll be No. 1 in Nashville, No. 1 in Chattanooga, No. 3 in Knoxville and No. 3 in Memphis.”

Holley, who led Capital- Mark with the state’s biggest capital start of any bank in 2007 when investors oversubscribed an initial $35 million stock offering, said CapitalMark grew to nearly $1 billion in assets and consistent profits with only a single office in Chattanooga, Cleveland, Oak Ridge and Knoxville

“Our model served us well here in Chattanooga to grow as we did as Chattanooga’s fastest growing bank with just a single office,” Holley said. “But as we move forward, we’re going to find some strategic locations around town where we can pick up additional business in the market with some additional branches.”

Pinnacle announced plans Monday to add a second Chattanooga branch at Shallowford and Shepherd Roads. The new 4,000-square-foot office, which is the first of a handful of new branches Pinnacle may add over the next five to seven years in the Chattanooga area, will be staffed by two new bankers hired for the expansion.

Lawrence M. “Larry” Vinyard will serve as office leader of Pinnacle’s second Chattanooga office, and Scottie Neil will serve as a financial advisor.

“Larry and Scottie will be excellent additions to the Pinnacle team as we continue to grow in Chattanooga,” said R. Ryan Murphy, area manager for Pinnacle’s client services group. “I am confident they will bring innovative and efficient banking solutions to their clients along with distinctive service and effective advice.”

Vinyard brings 13 years of banking experience to Pinnacle and most recently served at FSGBank as a business banker. Prior to FSG, he worked at Regions and Wells Fargo. Neil has 16 years of banking experience, most recently at Bank of America as a senior small business banker.

Vinyard and Neil will work out of Pinnacle’s downtown office until the new office is completed.

“We look forward to serving businesses and individuals in the Chattanooga community with the added convenience of a larger footprint as we prepare to open one new office per year over the next four to five years,” Murphy said.

Pinnacle, which already operated six offices in Knoxville, took over the deposits and business operations of the former Capital- Mark bank in Knoxville but recently closed that branch. Another former CapitalMark office in Oak Ridge is being put under the Knoxville market operation, Turner said.

The merger of CapitalMark into Pinnacle will end up cutting about 46 jobs, Holley said, including about 20 workers who are working through the merger. The consolidation of back office operations and software systems, a shared HR and payroll department and the closing of the consolidation of the Knoxville offices reduced the overall headcount for the bank.

“A large of group of those [displaced] associates have already found other jobs,” Holley said. “All of the client-facing associates are still with us and over the next few years we anticipate adding more employees as we add more branches.”

Holley said the sale of CapitalMark will not only help the bank staff with new opportunities. It will enhance the lending limit and treasury services available for clients and provide a healthy return to shareholders. Those who bought into CapitalMark when it began nine years ago received more than four times their initial investment in stock or cash with the Pinnacle purchase.

“It was a great deal for us and for our clients,” said Grady Williams, a certified public accountant and CapitalMark director who helped organize the bank a decade ago.

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.