Nashville’s largest locally owned bank is dipping its toes back into loans for home builders. Pinnacle Financial Partners got out of construction lending during the recession, but now it wants to be part of Nashville’s resurgent housing market.
Three years ago, Pinnacle CEO Terry Turner said people weren’t asking to borrow money. The bank wouldn’t have lent it anyway, at least to home builders. Pinnacle posted big losses in 2009 and 2010, mostly due to bad loans. Now, new housing permits in Nashville are up more than 12 percent. But Turner says the bank is being selective in who it lends to.
“What we did is sit down and make a list of the folks we want to target, most of whom already bank with us on the deposit side, Turner said on an earnings call Wednesday. “And we said ‘alright, we’re going to focus on this group of builders because they’ve weathered the storm and done well through the cycle.’”
Construction loans are still a small part of Pinnacle’s lending to businesses, about two percent. That number is growing, but Turner says it’s not moving at a pace he would like. He attributed that to a still-sluggish economy and uncertainty in Washington.