Turner: Pinnacle ready to speed up TARP talks

Coming off a Q1 earnings beat, Pinnacle Financial Partners President and CEO Terry Turner said Tuesday that Nashville’s biggest hometown bank is “in a position to accelerate our dialog” with regulators about paying its way out of the Troubled Assets Relief Program.

Pinnacle’s first-quarter profits of $7.2 million [2] helped pad its capital ratios and should smooth the path toward repaying the roughly $70 million stake still held by the U.S. Treasury. Pinnacle in December cut the Treasury a $23.9 million check [3] to cut its TARP obligations by about a quarter.

Speaking to analysts and investors, Turner also said his optimism stems from the expectation that the rest of 2012 should produce even bigger profits at 12-year-old Pinnacle. That will help the bank get out of TARP with minimal or no dilution to common stockholders. CFO Harold Carpenter said regulators at both the Office of the Comptroller of the Currency and the Federal Reserve have been receptive to Pinnacle’s plans.

“They seem willing to consider a host of strategies or transactions to help us achieve what we want to achieve,” Carpenter said. “There is a sense that a bank dividend [to the holding company], too, is fair game.”

At the end of Q1, Pinnacle National Bank had the capacity to pay Pinnacle Financial about $30 million. If regulators deem that money to still be off limits to the holding company, Turner said he would be willing to continue steadily improving Pinnacle’s asset quality.

Shares of Pinnacle (Ticker: PNFP [4]) climbed steadily on Tuesday and were changing hands at about $17.80, up more than 6 percent on the day. Year to date, the stock is up 10 percent.

Elsewhere on the call, Turner and CFO Harold Carpenter addressed the following issues and questions:

• Pinnacle plans to open another office in Knoxville, where its loan balance finished Q1 at $544 million. The branch will be Pinnacle’s fourth in East Tennessee.

• Fresh from hiring a veteran C&I lender from Bank of America, Pinnacle’s leaders are still recruiting veteran bankers around town to join the team. Pressed by an analyst to put up another target beyond the dozen or so who have come on board since last summer, Turner demurred, saying only Pinnacle “will definitely hire more.”

• While Pinnacle has the balance sheet ammunition to fund loan growth in upcoming quarters, Turner said his group has been drawing up plans to continue to gather deposits in future years, when overall loan demand should pick up. “Those are not burning issues today, but those are going to be burning issues for this bank and others in the pretty near future.”