Pinnacle bank continues its expansion strategy. Since my last blog post, the company has announced that it has added 17 bank officers to its locations in the Chattanooga regions.

https://www.pnfp.com/about-pinnacle/media-room/pnfp-in-the-news/pinnacle-adds-17-bank-officers-since-buying-capitalmark

Approximately two years ago, the company purchased one of its smaller competitors, which is Capitalmark and now Pinnacle wants to continue to expand by adding bank officers who can bring in new business. 

According to a company press release...

     "Chattanooga has been one of our better performing markets and we see a lot of opportunity here for more growth," McCabe said in an address to the Chattanooga Rotary Club. "We started targeting this area in 2013, and we were very fortunate the acquire CapitalMark with its great people and market knowledge."

Pinnacle had less than 6.6 percent of the deposits in the Chattanooga metropolitan market in the latest FDIC report for last year. But McCabe said by hiring experienced bankers — all of whom have at least 10 years of proven experience— Pinnacle has succeeded in growing market share. He boldly predicted Thursday that Pinnacle will eventually displace at least one of the three top regional banks in Chattanooga.

"Our goal is to be No. 1, 2 or 3 in each of the markets where we operate," McCabe said. "We will probably add about one office a year (in the Chattanooga market), but we will grow primarily by having great bankers focus on their customers."

 

Chapter 10 is about vertical integration. Pinnacle has in house brokers who handle investments in-house rather than outsourcing to an investment firm. This is an example of vertical integration because the bank in participating in a new area along its value chain.   

I believe Pinnacle’s relationship with Avenue Bank in Nashville was an example of Tacit collusion. When Pinnacle purchased Avenue Bank, one of the founders of Avenue Bank was given a seat on Pinnacle’s board of directors.  After the sale, Pinnacle continued to grow the Avenue Bank brand before changing the name to Pinnacle. See links below.

http://www.businesswire.com/news/home/20160128006576/en/Pinnacle-Financial-Partners-Announces-Agreement-Merge-Avenue

http://www.bizjournals.com/nashville/blog/2016/01/why-ron-samuels-sold-his-10-yearold-avenue-bank-to.html

 

Pinnacle has both real assets and financial assets. The company is undergoing a growth strategy. Flexibility and real options are a source of sustained competitive advantage for Pinnacle. The company is trying to develop signature tools and customer service options that can’t be duplicated. The company has entered into a strategic alliance with Starbucks to offer a Starbucks within some of the bank’s branches.

 

http://www.bizjournals.com/memphis/news/2017/02/17/see-inside-starbucks-to-debut-inside-bank-branch.html

 

Pinnacle has used the concept of product differential, specifically distribution of service channels to stand out among its competitors. The company allows its customers to use any ATM machine in the nation free of charge for deposits and withdrawals. This is a great service to customers because they don't have to drive out of their way to use an ATM. This makes Pinnacle stand out tremendously among competitors because its an added customer convenience other banks do no offer.