Fees, branches highlight Pinnacle's opportunities to juice CapitalMark contributions

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.


Apr 8, 2015 2:49 PM

Pinnacle buying Chattanooga bank for $187M

Deal to add almost $1B in assets; LaunchTN CEO to join board
Apr 7, 2015 5:47 PM

Pinnacle recruits SunTrust CRE exec

Group VP third notable commercial property hire this year for downtown bank
Apr 7, 2015 7:18 AM

Analyst action: HCA, AAC, Pinnacle

Shares of HCA Holdings are on the list of 10 catalyst-driven picks for the second quarter at BofA Merrill Lynch. The firm's analysts say a favorable Supreme Court ruling in King vs. Burwell — which is expected by late June — will give the country's largest private hospital operator "plenty of upside possibility with little downside." HCA shares (Ticker: HCA) are up slightly so far this year.

Raymond James analysts have added AAC Holdings to their list of must-own health care stocks for the coming months. AAC (Ticker: AAC), which went public late last year, is down just a bit so far in 2015.

Our playbook for 2015 encompasses four key themes to invest behind: above-average growth (relative to peer groups), reform (which has been strong on the exchange front and could see a bump in Medicaid enrollment as more states expand Medicaid), capital deployment optionality, and free cash flow generation (the last two provide downside support and can act as incremental growth drivers).

And lastly for now, Sandler O'Neil analyst Stephen Scouten has lowered his rating on shares of Pinnacle Financial Partners (Ticker: PNFP) to 'hold' from 'buy' after they hit his $44 target. However, he has tweaked that target to $47.

Apr 2, 2015 9:49 AM

KBW hikes Pinnacle target 20%

Shares of Pinnacle Financial Partners hit a record high $45.29 on Friday — they ended the day 10 cents below that peak — but Keefe Bruyette & Woods analyst Jefferson Harralson sees them climbing a bit more. He has raised his target for the largest bank based in Nashville (Ticker: PNFP) to $48 from $40 and continues to rate it at 'outperform.'

Mar 23, 2015 7:14 AM

Second CRE hire for Pinnacle

NAIOP board member makes move from Regions
Mar 17, 2015 7:25 AM

Pinnacle suing PGM Properties principals

Bank says developers owe more than $1M
Mar 16, 2015 6:01 AM

Pinnacle recruits two small biz SVPs

Division manager, others come over from First Tennessee
Mar 13, 2015 9:42 AM

Pinnacle adds compliance exec for investment units

Former TrustCore leader also will work with new capital markets group
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Pinnacle brings on US Bank CRE exec

Market manager to lead big growth initiative
Mar 3, 2015 7:10 AM