Pinnacle bids adieu to TARP [1]
Pinnacle Financial Partners has exited the U.S. Treasury's TARP program after cutting a $71.6 million check and redeeming the federal agency's preferred shares.
Pinnacle President and CEO Terry Turner said the funds to step out of TARP after three and a half years — he bought back a quarter of the Treasury stake in December [2] — came from cash on hand, a dividend from Pinnacle National Bank and borrowings under a new $25 million senior debt facility [3] funded by U.S. Bank. As had been Turner's goal all along, Pinnacle did not issue new shares to fund its TARP exit.
“We are pleased to finalize the redemption of the preferred stock the Company issued to the Treasury,” Turner said. “We can now dedicate our resources to growing our franchise in two great banking markets, Nashville and Knoxville.”
The Treasury payoff, which will result in Pinnacle taking a $1.7 million non-cash charge during the second quarter, is a sign that Pinnacle's recovery from the Great Recession remains on track. In April, Turner and CFO Harold Carpenter said they had stepped up their discussions [4] with regulators about a TARP payout, in part because of their confidence in the company's operations and growth.
Pinnacle becomes the second prominent local lender to shed its TARP obligations. Last September [5], Avenue Bank paid off its TARP tab of $7.4 million with the help of almost $19 million from the Treasury's Small Business Lending Fund.
Pinnacle shares (Ticker: PNFP [6]) closed Wednesday at $18.09, down slightly on the day. Year to date, they're up about 12 percent.
- Area Stocks [7]
- Finance [8]
- Pinnacle Financial Partners Inc. [9]
- U.S. Bank [10]
- bank capital [11]
- TARP [12]
- Troubled Assets Relief Program [13]
- U.S. Treasury [14]
- M. Terry Turner [15]
- Banking [16]