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VOL. 37 | NO. 35 | Friday, August 30, 2013

First Tennessee recovers, finds new markets

By Linda Bryant

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Doyle Rippee, as First Tennessee market president for Middle Tennessee

Doyle Rippee, a veteran banker with more than three decades of experience, took over as First Tennessee’s market president for Middle Tennessee at the height of the recession.

With more than $2.5 billion in deposits, First Tennessee – owned by parent company First Horizon National Corporation of Memphis – is big enough to be considered a strong regional bank in the state and in a handful of other nearby states.

Rippee says the strength of Middle Tennessee’s economy and branch locations in the region help to bolster the entire franchise. Case in point: First Tennessee announced earlier this year an expansion into commercial markets in North Carolina, South Carolina and Virginia. The bank acquired Mountain National Bank in East Tennessee this summer.

Rippee also touts the recent launch of three “concierge banking” pilot programs in the state, one of which is at the First Tennessee Bank on Northfield Boulevard in Murfreesboro.

The design of the bank shifts the focal point inside a bank away from the traditional image of a branch experience in which static lines of customers form at teller’s stations.

At a concierge bank employees don’t necessarily have assigned desks. There are imaginary “zones” in which different activities are taking place. In the first zone a customer is greeted by a concierge banker who stays with them throughout all transactions.

First Tennessee is trying out a new kind of personal “concierge’’ banking service at some of its branches, including this one in Memphis and at the Northfield Boulevard branch in Murfreesboro.

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“Instead of having bankers trained to do one thing, they will have knowledge about tellers, customer service and loans,” Rippee says. “The idea is to elevate the customer service and re-imagine the customer experience.”

Rippee recently answered questions about the bank’s past, its future and its slow and steady recovering since the recession.

Q: Can you explain the history of First Tennessee and how it came into being?

A: “First Tennessee is an unusual and historic company. It began in 1864 as the First National Bank of Memphis. The bank managed to survive the Civil War. We’re the top share bank in all Tennessee markets with the exception of Middle Tennessee. But there’s a strong growth in Middle Tennessee and a strong loyalty to the bank.

“We came into this market in 1972 with the purchase of Whites Creek Bank. Previously banks were subject to so much regulation that opportunities to expand were very limited.

“We began by acquiring a number of smaller banks in Franklin, Murfreesboro, Lebanon, and Gallatin. We’ve never really bought a major Nashville bank. We had a lot of catching up to do, which led to growth and the eventual addition of many branches in the area.’’

Q: You built so many bricks-and-mortar branches in Middle Tennessee in the 2000s. Have you had to shut any down or consolidate?

A: “Not much at this point. We have closed about a dozen of roughly 190 banks. It will change over time. Five years ago 85 percent [of customers] went to a bank at least once a month. Now that number is down to 46 percent. Over half of our customers rarely come to the bank. It’s a very important trend to take into account.

“I was in Europe recently and paid attention to the banks. You don’t see extensive branches there like you see them in this country. Their (in person) banking happens more in concentrated financial centers.

“We try to do what the customer wants us to do. At this point we need both branches and a heavy emphasis on technology. I think you’ll start to see a lot of experimentation going on, and eventually, there will likely be more financial centers and fewer branches. We may end up being a little more like Europe.’’

Q: How has First Tennessee/First Horizon recovered from the recession? Where do you feel like you are in the recovery process?

A: “We changed CEOs in late 2007, and it was a decision that began to drive all other decisions. Our biggest problem was our mortgage business. It was disproportionate to our size. We took a hit, but the bank was healthier than our numbers indicated.

“We attacked our problem assets and loans and became aggressive. We got hired specialists to help us work them out. This was about the time I joined the bank. We were starting to grow our balance sheet, starting to play offense. We took major steps to revitalize.

“Since 2009, [we’ve had] steady growth of consumer and commercial loans – mortgage and home equity loans, auto loans, credit cards, personal loans. Many people wanted to refinance their homes, so we were able to take advantage.

“Since then it’s been all about proving best value and service to our customers. We’ve had to deal with the avalanche of banks that have hit town in the past three years. Middle Tennessee and Nashville has been good for the bank because it’s such a great economic engine. Our strong economy here has helped First Horizon.’’

Q: What are the biggest challenges of being a regional bank?

A: “We literally compete with everyone – the giants, community banks, wealth managers, etc. You need to maintain a certain size with adequate branches. We have worked with the smallest deposits and most modest customers to some of Nashville’s largest companies to managing wealth for millionaires.

“We also have the opportunity to reach out to new markets such as the unbanked or underbanked, customers with modest incomes. It’s all about product, service and location and maintaining a very broad appeal.’’

Q: It seems like there’s always been chatter about First Tennessee being an undervalued bank that would be a good target for acquisition. The bank has consistently resisted acquisition. Has that changed since the recession?

A: “Our position hasn’t changed. Every bank is on somebody’s target list, but we don’t plan to be a seller. We recently acquired a new bank with about $370 million in deposits – First Mountain National. We think we can grow in other markets. We are very desirous of growing and acquiring banks where it makes geographic and economic sense.’’

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