Despite the coronavirus pandemic, a pair of Chattanooga banks reported strong growth in deposits over the past year and improved credit performance since the spring shutdown of many businesses.
Pinnacle Financial Partners, Inc., the Nashville-based parent company of the fourth biggest bank in Chattanooga, reported net income of $1.42 per share in the quarter ended Sept. 30 with average deposits in the quarter up 24.9% from a year ago to a record $26.4 billion.
Although Pinnacle profits were down 1.4% from a year ago, the results topped Wall Street estimates by 32 cents per share. In response to the earnings report, shares of Pinnacle Bank, which had dropped by more than a third so far this year, rose Wednesday by $2.18 per share, or 5.4%, to $42.55 per share.
"Late in the first quarter, we transitioned our firm from an offensive to a defensive posture, which entailed things like allocating significant resources to the re-risk grading of a significant portion of our loan portfolio and limiting the continuous recruitment and hiring of revenue producers, which has been a key driver historically in our outsized growth," said M. Terry Turner, Pinnacle's president and chief executive officer. "Subsequently, we also altered our internal communications and annual cash incentive plan to encourage associates to aggressively identify and deal with any problem credits while continuing to focus on growing pre-tax, pre-provision net revenues for the remainder of 2020 as we seek to better position our firm to grow earnings per share at the conclusion of the economic disruption resulting from the pandemic."
Another Tennessee-based bank with operations in Chattanooga improved its third quarter earnings this year. SmartFinancial Inc., the Knoxville-based parent company of SmartBank, reported net income in the third quarter of $6.4 million, or 42 cents per share. In the same period a year ago, SmartBank earned $6.2 million, or 41 cents per share.
SmartBank said its deposits increased by $604.8 million, or 29.5%, from the end of 2019.
"The quarter was, once again, strong and right on plan for SmartFinancial," SmartFinancial Chairman Miller Welborn said. "2020 has certainly been a challenge, but our team has executed superbly."
Despite the improved results, shares of SmartFinancial fell Wednesday by 20 cents per share, or 1,4%, to close at $14.06 in trading on the Nasdaq Exchange. The stock value of SmartFinancial has dropped nearly 40% so far this year.
Contact Dave Flessner at email@example.com or at 757-6340