Pinnacle Financial Partners to acquire CapitalMark Bank and Trust

 

David Bradshaw will continue to serve as Oak Ridge president

Pinnacle Financial Partners Inc., the second-largest bank based in Tennessee, on Tuesday announced an agreement to acquire CapitalMark Bank and Trust, which has a location in Oak Ridge. The merger is expected to close late in the third quarter or early in the fourth quarter of 2015.

David Bradshaw, CapitalMark’s Oak Ridge president, will become Pinnacle’s city president for Oak Ridge. CapitalMark clients will continue to work with their banker teams, which in Oak Ridge includes Bradshaw and Andy Boyer.

“CapitalMark is excited to partner with an organization that shares our commitment to excellent client service and has demonstrated strong operating performance and a long-term track record of growth,” said R. Craig Holley, CapitalMark’s chairman, president, and chief executive officer. “I strongly believe that, collectively, the two franchises can accomplish more, grow more efficiently, and realize more value for our shareholders together than independently. Since CapitalMark’s founding in 2007, we have focused on businesses and their owners, and we will continue that tradition with Pinnacle.”

CapitalMark reported $968 million in total assets and $840 million in deposits as of March 31 and currently operates four offices in Tennessee, one each in Chattanooga, Cleveland, Knoxville, and Oak Ridge. During the first quarter of 2015, CapitalMark reported loan growth of $48 million and deposit growth of $60 million.

“CapitalMark has built a very successful firm in Chattanooga and the Knoxville market, including Oak Ridge,” said M. Terry Turner, Pinnacle’s president and chief executive officer. “This acquisition is consistent with Pinnacle’s strategy to grow rapidly while operating in all of Tennessee’s four urban markets.”

Pinnacle, with 29 offices in eight Middle Tennessee counties and five offices in Knox County, reported total assets of $6.0 billion and total deposits of nearly $4.8 billion as of December 31.

At the time of closing, the combined companies are projected to have total assets of more than $7 billion, with Pinnacle operating 37 offices in 12 counties, including three high-growth counties new to the Pinnacle footprint.

Pinnacle plans to consolidate CapitalMark’s Knoxville office into nearby Pinnacle locations in Knox County and to redeploy the staff from these offices to other nearby offices. The combined institution will have the No. 4 market share in the Nashville MSA (metropolitan statistical area), the No. 4 market share in the Chattanooga MSA, and the No. 6 share position in the Knoxville MSA.

When the merger is complete, CapitalMark director Charles E. Brock, president and CEO of Launch Tennessee, is expected to become a director of Pinnacle’s board. CapitalMark CEO Holley will be named Chattanooga chairman for Pinnacle. Additionally, Kenneth C. Dyer III, CapitalMark’s banking group president, will become Pinnacle’s Chattanooga president and a member of its Leadership Team. R. Ryan Murphy III, CapitalMark’s business unit group head, will be responsible for Pinnacle’s client services group in Chattanooga and also will join its Leadership Team.

“CapitalMark is an impressive franchise that has been built in a manner similar to Pinnacle: by attracting the best financial services professionals and providing them a platform to serve their clients in a distinctive way,” Pinnacle Chairman Robert A. McCabe Jr. said. “Pinnacle is excited about investing in Oak Ridge by contributing to the organizations that make a positive difference here.”

Systems conversions are scheduled to be completed during the second quarter of 2016. Until that time, CapitalMark will continue to operate under its current brand as a division of Pinnacle Bank.