TRIUMPH’S CAPITAL GROWTH PLANS FEATURED
In an article published in The Daily News, Triumph Bank was featured as an example of positive growth efforts on the part of Memphis area banks, including quotes from Triumph President/CEO Will Chase.
BANKS RAISING CAPITAL TO FINANCE GROWTH
August 16, 2010, The Daily News
Banks in the Memphis area are raising tens of millions of dollars in new capital to finance growth plans, to support a boost in lending and to make sure they’re in prime position to handle an acquisition.
It’s a reversal of the motivation some bankers elsewhere at larger and more systemically important institutions have to raise capital, which for them sometimes equates to piling sandbags while they hunker down. Yet the impetus here still comes from the same place, with both realities driven by the same environment.
Regulators also seem to be finding any reason at all to wag their fingers these days, and capital levels are one reason to do so. There’s almost no such thing as too much, according to some industry observers.
In Memphis, Triumph Bank is almost done with a $4.5 million preferred stock offering that should wrap by the end of August. Renasant Bank by the end of July had issued and sold about 3.9 million share of common stock, netting almost $55 million.
Bank of Bartlett and The Bank of Fayette County are both still in the process of capital raises that began a few months ago.
Metropolitan Bank has pulled in $10.6 million in new capital, which CEO Curt Gabardi said would be put to work in support of an aggressive growth strategy.
“For Metropolitan, this is an offensive capital raise that will allow us to significantly increase our lending capacity, continue to attract key talent and support our market expansion efforts,” Gabardi said about his bank, which has co-headquarters in Mississippi and in Memphis.
Metropolitan, which has assets of about $450 million, says it’s operating ahead of its profitability projections for the 28-month-old private client and commercial bank.
Triumph Bank is in a similar position. Triumph CEO Will Chase said his bank doesn’t necessarily “need” the new capital it’s raising, but that applies only to today.
The new money is part of a multi-year plan for Triumph that includes growing by another $70 million in loans by the end of next year.
The new money Triumph is raising “also provides us the capital that would be required in case an acquisition of a large loan portfolio or a smaller institution became available,” Chase said. “Because we have been blessed during these difficult times, we have options others may not have.”
Renasant’s most recent notification from the Federal Deposit Insurance Corp. characterized the Tupelo, Miss.-based bank as “well-capitalized under the regulatory framework for prompt corrective action.”.
Renasant, like Triumph Bank, was among the few Memphis-area banks that did not get federal capital as part of the taxpayer-funded bank bailout program of 2008. The bank said in its recent regulatory filing after having raised new capital on its own that the board continues to believe turning down the federal money was the right decision.
The moves by banks here like Renasant and others to round up new capital amid an increasingly uncertain economy and marketplace where consumers and borrowers continue to struggle are a reflection of what’s happening around the country. That’s according to Philip Smith, president of Gerrish McCreary Smith PC.
“It is my opinion that practically every bank can utilize more capital currently,” Smith said. “If the bank is struggling, continuing to fight asset quality problems, and deal with the regulators, additional capital will provide some level of comfort to the regulators and will protect against future loan losses.
“If the institution is healthy and looking for opportunities, additional capital will allow them to move quickly when an opportunity presents itself to make an acquisition or expand their operations.”