Rates and Resiliency: Leaders discuss financial landscape and key Nashville characteristics

Rates and Resiliency: Leaders discuss financial landscape and key Nashville characteristics

2023-03-15T12:36:13-04:00March 15th, 2023|Banking & Finance, Economy, Nashville|

Writer: Ryan Gandolfo

3 min read March 2023 — With the changing landscape in Nashville and Middle Tennessee, financial leaders weighed in at the recent Invest: Nashville 2022-2023 Launch Conference to discuss the shifting interest rate environment and how businesses are adapting. 

Moderated by Ryan McLaughlin Wood, south central market head at UBS Wealth Management, the second panel, titled “Financial Fortitude: How Nashville’s financial leaders are responding to regional growth in a shifting landscape,” featured Johnny Moore Jr., regional president of Truist, ServisFirst Bank Executive Vice President and Regional CEO Bradford Vieira and Regions Bank Market Executive Lee Blank. 

The panel kicked off with a topic continuing to make headlines this year: interest rates. “Everyone needs to understand the Fed is always in a reactive mode. The only thing about that approach is you’re never going to be perfect. It’s more of a shotgun approach instead of a rifle,” said Moore. While concerns loom over the rising rates and an economy looking to stabilize, Moore pointed out that recent jobs reports have remained strong. The Labor Department reported that nonfarm payrolls rose by 311,000 in February, a deceleration in job creation from previous months but still stronger than expected. “To really calm down the economy, you have to see some job loss which takes off the pressure of inflation. Until you see that, the Fed is going to keep their foot on the pedal.”

Vieira also noted the pivot from historically low interest rates to a more normalized market, while keeping it all relative. “We’re not talking about 10 to 12% interest rates, it’s still in the single digits,” Vieira pointed out. According to Trading Economics, interest rates averaged 5.42% from 1971 to 2023 — and reached an all-time high of 20% in March 1980. “I’m biased with Nashville — it’s the greatest place on earth and it is a resilient market. We may have some correction but nothing major,” said Vieira.

Blank added that smart business decisions can override corrections in the market. “First thing you learn is you don’t fight the Fed. When you’re in a rising interest rate environment, you don’t know how to react but once you start to see a little stabilization people can factor that in and look at their business plans,” he said.

The panel also shifted toward the characteristics that make Nashville an attractive market for businesses and investment. “Nashville is a destination spot which generates additional growth and new employment. Because of the influx of people from the East and West Coast, Nashville has a different dynamic,” said Moore. While newcomers may look to the pandemic as the catalyst for the influx of residents and businesses to the region, the larger trend dates back three decades where residents have experienced a 208% growth in per capita income. For the banking sector, that meant new entrants and increased competition. “When I started my career, there were principally three banks and now there’s almost 80 operating here,” said Blank. “We’ve got a lot of great competitors in this market. While being based in Nashville, I have worked in other markets and here is one of the most competitive, which is a great benefit to consumers,” he added.

An additional component of Nashville’s banking sector has been the intentionality to serve customers across communities. Studio Bank, founded in Nashville in 2018 with offices in Franklin and Clarksville, has a special focus on helping creators and entrepreneurs scale their businesses. “We use the term creators instead of creatives because what makes humans unique is our ability to create. We can dream up something and make it happen and that includes nonprofit executives who are creating social change, healthcare executives who are creating a more streamlined healthcare system and even parents who want to create a better way of life for their families. We are all creators and, as bankers, we want to enable collaboration and partnerships to make what they’ve imagined real,” said co-founder and chief relationship officer Harry Allen in a separate interview with Invest:. Studio grew from $470.2 million to $769 million in total assets from June 2021 to June 2022, as cited by Nashville Business Journal.

As the panel wrapped up, leaders looked to the future challenges and opportunities in the region, citing areas that Nashville will need to improve upon to accommodate its growth. “From an infrastructure and mass transit standpoint, we have to start thinking about that yesterday,” said Vieira. In a recent interview, mayoral candidate Matt Willshire highlighted the need to “build a skeleton on which our city can grow” from dedicated-lane mass transit from the airport to downtown to affordable housing at transit stops.

Moore painted an exciting picture of the region’s growth trajectory, mentioning the newly proposed Titan’s indoor stadium, which is expected to have a direct spending impact of $20.9 billion over the next 30 years. “You got to look at the growth — it’s not going to stop. You’ve got this indoor arena for the Titans, and now you become a top tier city across the board.”

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