Pinnacle Financial Partners has no plans to payback $95 million from the U.S. Treasury in the near future. Nashville’s largest locally-owned bank reported 4th quarter earnings and said the economic outlook remains uncertain.
Pinnacle’s future was more unpredictable this time last year, shortly after receiving funds from the Troubled Asset Relief Program. But CEO Terry Turner says the bank continues to see good loans go bad.
“We’re not interested in repaying the TARP until we’re confident that the economic landscape is on solid footing and heading north and that our loan portfolio and specifically our non performing or problem loan trends are also headed north.”
Pinnacle foreclosed on $34 million of loans in the fourth quarter. Loan losses grew from 1% of the bank’s total loans at the end of 2008 to more than 2.5% at the end of 2009.
Turner says economic uncertainty remains, and the bank can’t predict that the flood of bad loans has peaked, though he’s hopeful they have.
However, Pinnacle’s chief financial officer Harold Carpenter told analysts the bank will back off reserve building because problem loans are becoming more predictable.
“Right now we think our loan grades are good. We think our officers are focused on that and that we’ve got a pretty good understanding of where the credit quality of this book exists as of the end of the year.”
At the same time, Pinnacle has been able to grow its deposits by 8%. The bank also continues expanding in Tennessee, though less rapidly than in the past decade. It plans to hire 50 new employees this year.
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