Pinnacle is ready to get back in the M&A game, but don't look for President and CEO Terry Turner to buy other banks anytime soon.
Instead, the largest bank headquartered in Middle Tennessee is looking to bring into the fold debit card and interchange businesses that generate steady fees based in transaction volumes. CFO Harold Carpenter told analysts and investors on the company's third-quarter conference call today that Pinnacle's senior executives are scouting the market looking to buy companies with "a meaningful presence" in such lines of business.
"Terry has challenged us to look all over the landscape … to see what might be out there that we could use or that we might acquire," Carpenter said.
Any such moves would lift Pinnacle's fee income growth rate, which was 3.5 percent in the third quarter but more than 7 percent during the first nine months of 2012. Fee revenues account for a fifth of Pinnacle's top line before loan loss provisions.
The renewed emphasis on buying comes after 15 months in which Pinnacle added 11 senior bankers from regional competitors — Turner announced the push in July of last year — that execs think will over time enable them to add more than $1 billion in assets to their balance sheet. Pinnacle finished its third quarter with an asset base of almost $4.9 billion.
Other topics mentioned on Pinnacle's call Wednesday morning:
• About two-thirds of Pinnacle's mortgage activity these days is coming from refinancings.
• The bank expects to open its fourth Knoxville-area office early next year.
• Much of the construction loan growth Pinnacle has posted of late has come in the form of new stores for blue-chip names such as Target and Wal-Mart.
Pinnacle's strong Q3 numbers got investors excited Wednesday. They pushed the company's stock (Ticker: PNFP) up more than 10 percent to above $20.20. Volume was heavy, with the daily average being passed in the first 50 minutes of trading and growing to more than four times the norm.