Staff Photo by Robin Rudd / First Horizon Bank's Chattanooga offices are located at 701 Market Street.

Chattanoogans curtailed their spending and used their share of record-high federal stimulus funds to collectively put away more than $2 billion of additional deposits in their bank accounts this spring.

The Federal Deposit Insurance Corp. reported this week that total deposits in Chattanooga's 27 commercial banks as of June 30, 2020, were up nearly 12% from a year earlier to a record high of more than $12.1 billion.

Across Tennessee, bank deposits grew even faster than in Chattanooga, rising by nearly 20.5% to top $193.1 billion.

"This has been a very unusual year and some of this growth is probably just a temporary thing due to the unprecedented stimulus measures from the government and the cautious attitude toward spending and many activities until we get a vaccine for this virus," said Collin Barrett, president of the Tennessee Bankers Association. "These numbers are somewhat artificially inflated this year and they will go back down."

Bank deposits swelled with the aid of $2.2 trillion of extra federal aid granted this spring to employers, consumers and unemployed Americans from the CARES (The Coronavirus Aid, Relief, and Economic Security) Act approved by Congress in March to help offset the economic slowdown triggered by the coronavirus pandemic.

Chattanooga's biggest banks

Among the 27 commercial banks operating in the 6-county Chattanooga metropolitan area, total deposits grew by nearly 12% in the past year. The biggest banks in Chattanooga by deposits are:

1. First Horizon, $2.8 billion in deposits, or 23.2% of the market

2. Truist Bank, $2 billion in deposits, or 16.5% of the market

3. Regions Bank, $1.5 billion in deposits, or 12.5% of the market

4. Pinnacle Bank, $1.3 billion in deposits, or 10.6% of the market

5. FirstBank, $740 million in deposits, or 6.1% of the market

6. Bank of America, $643.7 million in deposits, or 5.3% of the market

7. First Volunteer, $541.1 million in deposits, or 4.4% of the market

8. Citizens Tri-County, $429.1 million in deposits, or 3.5% of the market

9. SmartBank, $403.1 million in deposits, or 3.3% of the market

10. Bank of Lafayette, $256 million in deposits, or 2.1% of the market

Source: Federal Deposit Insurance Corp., Deposit Market Share Report as of June 30, 2020.

"The stimulus checks for individuals and the Paycheck Protection Program and other relief measures for small businesses and other targeted industries provided more money and liquidity for employers," said Jay Dale, market president for First Horizon Bank, the biggest bank in Tennessee and in Chattanooga. "At the same time, many individuals who are worried about the uncertainty in the economy are simply saving more money this year."

Chattanooga's unemployment rate jumped to a record high of 13.3% in April, but overall personal income has still grown due to richer jobless benefits for laid-off workers, extra stimulus checks and loans from the federal government, and near record-low interest rates pushed by the Federal Reserve Board to curb borrowing expenses for many home and car buyers.

Unemployment has since fallen nearly in half from its springtime peak as more businesses have reopened and the economy has begun to bounce back. But as extra jobless benefits and business loans and aid expire, millions of Americans whose jobs or income has been cut are now facing tighter budgets. Congress is now debating extra stimulus measures to help sustain income and growth while the virus continues to hurt many leisure and travel-related industries.

Barrett said even with the sluggish economy, Tennessee's banks are well capitalized and faring well, for the most part, during 2020. But the banking industry is still pushing for more federal aid to help prop up more businesses suffering from the pandemic.

In Chattanooga, the biggest banks held their market-leading positions over the past year even with the virus and even taking on new names.

First Horizon Bank, formerly First Tennessee, remained the biggest bank in Chattanooga with more than 23% of the deposits in the market at its 17 offices. Truist Bank, formerly SunTrust, ranked No. 2 with nearly 16.5% of the market's deposits at its 26 local branches.

Regions Bank, another regional banking powerhouse, has over 12.5 % of the market's deposits at its 16 branches.

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Collin Barrett / Photo by Donn Jones Photography

The fastest-growing bank in Chattanooga over the past year was the Nashville-based Pinnacle Bank, which grew its deposits in the Chattanooga market by more than 50% to top $1.2 billion. Pinnacle acquired the former CapitalMark Bank in Chattanooga in 2015 and has grown steadily since.

"We never stop working for our clients, especially in times of financial uncertainty," said Craig Holley, Pinnacle's Chattanooga chairman. "This year has brought a lot of changes for local families and businesses, and our team's commitment to helping them is stronger than ever."

Statewide in Tennessee, Pinnace grew deposits by $5.1 billion, or 37.5 percent, for a total of $18.6 billion. In Chattanooga, Pinnacle added another branch in the past year, one of the few banks to add another office to its branch network.

From the 2009 peak of 179 bank offices, Chattanooga area banks have pruned their branches in the past 11 years by more than 18%, according to the latest FDIC figures released this week.

"We continue to see bank consolidation and a move toward more online and electronic banking services,"Barrett said.

Dale said brick-and-mortar branches remain the No. 1 reason for why consumers initially pick a bank, but he said online banking has helped handle a growing number of services previously done only in the office.

Since the 2009 peak for the most number of Chattanooga bank offices, deposits in Chattanooga have jumped by more than $4 billion even with 33 fewer bank offices operating in the market.

Contact Dave Flessner at or at 423-757-6340.

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Staff Photo by Robin Rudd/ Jay Dale, First Horizon Market President Southeast Tennessee, talks about the banking industry with the Times Free Press at the bank's offices on Market Street on November 13, 2019.