First Tennessee Bank plans to open as many as eight new branches in the next 18 months despite the nasty credit crunch tormenting regional banks.
Nashville Regional President Tony Thompson said the latest expansion spurt – First Tennessee has nearly doubled its local office count since 2003 to more than 45 – will focus on filling gaps in the bank’s footprint in areas like Nolensville and Goodlettsville. Other branches are slated for Murfreesboro and Wilson County.
Already in 2008, First Tennessee has opened two offices in Rutherford County. Locations in MetroCenter, Murfreesboro and Mt. Juliet’s Providence development are on tap for later this year and Thompson said he wants to identify up potential sites for next year’s expansion by the end of August.
Those additions will leave First Tennessee’s local network trailing only Regions Bank and SunTrust Bank in the Nashville area. By deposits, the bank ranks fourth locally with about 6 percent of the market, according to FDIC numbers released last fall – although Pinnacle Financial Partners’ leaders claim they have since passed First Tennessee.
Thompson says his team’s growth plans show that the bank’s core local business is still in decent shape even though the sector is wrestling mightily with the housing bust and other credit issues. At the end of May, he said, First Tennessee’s loan portfolio was up about 10 percent from a year earlier, with growth spread evenly across commercial and consumer customers.
“The headlines have an impact when it comes to our stock price and those of our peers, but we have been executing and continue to execute where the rubber meets the road,” Thompson said.
Like many of its peers, First Horizon has been wrestling with bad mortgage and development loans since last fall. The company also has retreated from its national expansion plans, recently selling $20 billion in mortgages to MetLife.
Fifth Third Bank, another regional player with credit problems, also hasn’t backed away from expanding its brick-and-mortar network — a model that was proclaimed to be on its deathbed a decade ago.
Despite a 70-percent slide in its stock price over the past year, the Cincinnati-based bank has more than tripled its area network in the past few years and this spring filed papers for another office in South Nashville. Bank officials could not be reached for comment.
In all, banks have opened about 150 new offices in Middle Tennessee in the past five years.
Start-up banks and new out-of-state players account for a good number of those, but First Tennessee and Fifth Third have been most aggressive of the regional players, combining for some 40 new branches since 2003.