In the wake of Pinnacle Financial Partners' big Memphis news, Kevin Reynolds at Wunderlich Securities has upgraded shares of the largest bank headquartered in Nashville to 'buy' from 'hold.' Reynolds, who earlier this month hiked his Pinnacle price targe to $48 from $40, now has the stock climbing to $54 in the coming year. Pinnacle (Ticker: PNFP) finished Wednesday trading at $48.60.
Shareholders of Pinnacle Financial Partners last week voted to declassify the bank holding company's board of directors, a process that will completed two years from now. Investors also approved by very wide margins the other items of business put before them.
Keefe Bruyette & Woods analyst Jefferson Harralson still really likes the prospects for shares of Pinnacle Financial Partners. On the heels of the bank holding company's strong first-quarter earnings report, he has reiterated his 'outperform' rating but lifted his price target to $54 from $48. Less than a month ago, Harralson took his target from $40 to $48, just above where the stock (Ticker: PNFP) now trades. That $48 level is where Stephens analyst Matt Olney now sees Pinnacle heading. His previous target was $45.
Wunderlich Securities analyst Kevin Reynolds has lifted his price target for shares of Pinnacle Financial Partners to $48 from $40 but is keeping his 'hold' rating. The largest bank headquartered in Nashville (Ticker: PNFP) got a lift this week from the news that is plans to buy Chattanooga's CapitalMark Bank & Trust. In Friday morning trading, they're down slightly to $44.65.
Over at Bank of America Merrill Lynch, analysts have taken Louisiana-Pacific down a notch to 'neutral' from 'buy' and trimmed their price target to $17 from $18. Shares of downtown-based LP (Ticker: LPX) are off about 0.5 percent to $16 today and down about 3 percent year to date.
Look for Pinnacle Financial Partners' leaders to quickly deploy its treasury management and wealth management resources at CapitalMark Bank & Trust once they complete their acquisition of Chattanooga's fourth-largest bank this fall.
On a call with analysts and investors Wednesday morning, Turner and CFO Harold Carpenter outlined more details of their $187 million deal, which will lift the company's assets to more than $7 billion. (Check out Pinnacle's slide presentation here.) Among them is the opportunity ramp up fee income at eight-year-old CapitalMark, which last year pulled in noninterest income — the "NII" next to the red oval in the image below — at less than half the rate of Pinnacle, which also has a robust insurance business courtesy of its acquisitions last decade of two brokerages that now do business as Miller Loughry Beach.
Another growth path for the CapitalMark business is building out a Chattanooga-area branch network. Looking ahead to his long-term goal of building Pinnacle into a bank with up to $15 billion in assets, Turner said he could see The Scenic City being home to around five offices versus the two it has now in downtown Chattanooga and in nearby Cleveland. That, he said, would suppose that Pinnacle's asset base in southeast Tennessee will grow to between $2 billion and $2.5 billion.
On the call, Turner also spent a good bit of time answering questions about the potential timing of future deals, including one that would take it into Memphis to complete its Tennessee major-market puzzle. There's no change to report there, he said, pointing out that he has been clear over the years that his team's hunt is about finding just the right partner — à la CapitalMark — much more than it is about timing.
Investors seem to be OK with the relatively rich price — more than two times book value — that Pinnacle is paying for CapitalMark. At about 2:20 p.m., the company's stock (Ticker: PNFP) was up 2.2 percent to $45.59, just off the all-time high it reached earlier in the day.
POSTDATA: WARRANTY DEEDS