After its stock has dropped nearly 20 percent in value so far this year, Pinnacle Financial Partners announced Tuesday it plans to repurchase up to $100 million of the company's common stock.
Pinnacle CEO Terry Turner said the Nashville-based bank, which acquired the former CapitalMark Bank in Chattanooga in 2015, remains committed to growing by aggressively hiring experienced bankers across Tennessee, Virginia and the Carolinas where Pinnacle now operates. But Turner said the drop in Pinnacle's stock, which has declined 19.4 percent so far in 2018, has led management to take a different approach to some of its capital allocation.
"We believe in the effectiveness of our business model and that our strategy should lead to outsized growth in tangible book value and earnings," Turner said. "Consequently, we have long held a bias against a repurchase program. However, given the current market dynamics, this provides us an effective tool as we continue to focus on delivering value for our shareholders."
The company said repurchases of Pinnacle's stock may be made at management's discretion from time to time in the open market, through privately negotiated transactions or otherwise. The board authorized the repurchase program to remain in effect through Dec. 31, 2019, unless the entire repurchase amount has been acquired before that date. The Company intends to fund the program with a combination of cash on hand, cash generated from operations and borrowings under the company's $75 million line of credit, under which there were no borrowings as of Sept. 30.
With nearly $17.3 billion in deposits as of June 30, Pinnacle is the biggest bank in metro Nashville and is the fourth biggest bank in metro Chattanooga.