Pinnacle Financial Partners' Terry Turner made the announcement following a late Tuesday earnings report in which the bank said it lost $4.85 million in the third quarter, or 15 cents per share.
The bank also postponed the buy-back of about $95 million worth of shares from the federal government that it had sold as part of the Treasury's bank rescue program last year. Pinnacle had raised about $109 million in common stock this summer with the possibility of paying back the federal government late in the third quarter or early in the fourth.
Peyton Green, a managing partner and bank analyst at Sterne, Agee & Leach in Nashville, said the delay was probably a good move for the bank.
"That would be like dropping your wind insurance in August when you live in a hurricane area and everyone knows the storms come in September," he said.
Turner explained that the bank's business customers aren't seeing much growth in revenue, and if their financial situations are improving, it's probably because they have cut expenses, mostly jobs.
"It takes job growth to affect consumer spending," he said. "Most people would readily acknowledge that they don't see strength in their company's financials."
However, he said real estate values appear to be stabilizing, because appraisals aren't as low as they were six months ago.
Pinnacle's nonperforming assets rose 21 percent between the second and third quarters of this year to $144.5 million. A year ago in the third quarter, the bank made $8.8 million in profits.
Pinnacle attributed its most recent quarterly results to an increase in the allowance for loan losses as it prepares for the possibility of future bad loans, particularly in land development and residential construction loans. The allowance for loan losses was $82.9 million at the end of the third quarter, up from $66 million during the second quarter.
Also, the bank paid $1.21 million to the federal government in preferred stock dividends in the third quarter.
On the other hand, Pinnacle, which has $5 billion in assets and is the Nashville area's fourth-largest bank, continues to grow deposits and profit margins. Core deposits grew 16 percent from the third quarter a year ago, to $2.2 billion.
The bank also recently signed a six-year marketing agreement with the Tennessee Titans to replace Regions Financial Corp. as the team's bank. Despite the 0-6 losing season this year, Turner said the deal, which includes marketing Titans-themed checking accounts and debit cards to fans, was attractive to the bank because of the fans' loyalty to the team.
Pinnacle's stock price rose 62 cents in trading Wednesday on the Nasdaq, to $12.50 per share, in part because of the strong growth in deposits and the fact that investors already had been expecting losses in the quarter, Green said.
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