At Pinnacle, we begin with the end in mind. And the ultimate goal for any public company is to ensure returns for shareholders. We have determined that focusing on the happiness and well-being of our associates is the most important part of the formula. Associates who are excited to come to work every day are what causes clients to come and stay with us year after year, and that drives outsized shareholder returns.
This focus on creating a great workplace becomes even more critical when merging multiple cultures into one. In 2016, Chattanooga-based CapitalMark Bank & Trust changed its name and identity to Pinnacle, and we completed the cultural conversion of Magna Bank in Memphis. We conducted six orientation sessions—four that included associates of the acquired Avenue Bank in Nashville—to give all of our new associates three dedicated days to learn about Pinnacle’s mission, vision and values directly from our leadership team. The power of our orientation is that it changes their mindset from thinking like employees to thinking like owners.
Our new associates from Avenue Financial Holdings work together during the team-building activities on the third day of Orientation.
Nothing inspires and elevates a job like ownership. Pinnacle awards restricted stock shares to 100 percent of associates upon employment and annually after the first year, literally making every associate an owner in the firm. We do something else that’s virtually unheard of in the financial service industry: All non-commissioned associates participate in annual cash incentives based entirely on meeting the firm’s financial targets. There are no individual bonuses, which could lead to in-fighting or pushing products on clients who don’t need them. The most powerful driver of our culture is that we win together and lose together.
Showing appreciation for extra effort goes a long way, so our leaders look for opportunities to praise and recognize associates for a job well done. We have found that spontaneous thank you notes or gifts are the most effective recognitions, and each associate is empowered to use our WOW budget to purchase something meaningful for a fellow associate who went above and beyond.
Getting to know one another outside of the office is also critical to fostering camaraderie and teamwork. Our associates organize fun outings like zoo days, family picnics and minor league baseball games throughout the year. Our wellness program also motivates everyone to get active and make healthy choices. During 2016, 44 percent of associates who participated in our wellness screening improved their overall health score.
Because the research shows a strong link between work environment and financial performance, we believe these practices are absolutely necessary to attract and retain the best financial services professionals in our markets, who then deliver distinctive service to clients and produce outstanding results for shareholders.
The Great Place to Work® Institute, the global authority on high-performance workplace cultures, surveyed our associates in 2016 and found that:
A whopping 100 percent agree that Pinnacle has great communication and great bosses.
The financial services industry’s leading trade publication, American Banker, ranked Pinnacle No. 6 on its “Best Banks to Work For” list and No. 2 in our asset-size category, $3-10 billion. Before our firms merged, Avenue Bank was No. 5 on the 2015 list and No. 4 on the 2014 list.
In addition, Great Place to Work® and FORTUNE magazine named Pinnacle one of the country’s 30 Best Workplaces to Retire From after reviewing the 401(k) plans, health insurance, phased retirement offerings, defined pension benefits and internal promotion rates at more than 600 employers across the country.
Associates with “milestone” anniversaries (have worked at Pinnacle for 5, 10, 15 or more years) took a Segway tour of downtown Nashville.
For the second consecutive year, our Memphis team was named a finalist in the Memphis Business Journal’s “Best Places to Work” competition, this time in the 100-149 employees category. After winning the Nashville Business Journal’s “Best Places to Work” award every year for 10 consecutive years, we earned a permanent spot in the Hall of Fame and have taken a lead role in presenting the awards competition. We also hosted a free panel discussion of past winners to give small business owners insight into how they can take their work environment to the next level.
We are very proud of these awards, but we don’t rely on them to measure our effectiveness in building a remarkable culture. Every year we conduct our own work environment survey to get feedback from associates and determine engagement levels. Despite the challenges of merging several different cultures, our scores remain extremely high.
We focus on retaining all-stars because turnover is a major irritant for clients. Our associate retention rate shows that our focus on engaging and keeping associates is working. Our 2016 rate was an extraordinary 92.7 percent when merger-related position eliminations were excluded, compared to the industry average of 76.6 percent.
At Pinnacle, supporting the community is an important part of who we are. When making our contribution decisions, we first look at the organizations in which our associates are involved because we want to support the causes that they put so much time and energy into.
Our associates donated 28,000 hours to over 560 not-for-profits in 2016. The full list of volunteer projects is too numerous to list here, so we update our Facebook page regularly with photos of community involvement, associate awards and partner events throughout the year.
Here are examples of a key community project that we undertook in each market.
Community members picked up cans at our offices to fill with change for the Ms. Cheap Penny Drive for Second Harvest Food Bank of Middle Tennessee. Our clients collected $7,552. On top of that, Pinnacle also contributed another $22,500 to Second Harvest in 2016.
Pinnacle contributed $25,000 to help with immediate and ongoing needs of those affected by the Great Smoky Mountain wildfires that burned more than 500 acres, damaged or destroyed more than 1,000 structures and killed at least 14.
Pinnacle served as a sponsor of Habitat for Humanity’s 2016 Jimmy & Rosalynn Carter Work Project in Memphis. Our associates volunteered on the build, which included 19 new homes in Bearwater Park.
Our mortgage team accepted the Charity Award$ Challenge issued by Envoy Mortgage. By participating in the challenge, Pinnacle secured a $7,500 donation for Children’s Advocacy Center of Hamilton County, which helps local children who are victims of abuse.
We designated April 21, 2016 as Pinnacle’s Make a Difference Day, where teams throughout the firm chose a project ranging from helping a client during a difficult situation or teaming up with a local non-profit organization to meet a specific need.
We are also proud of our track record of financial support. We give in four priority categories: education; health and human services; arts; and economic development. In recognition of our efforts, the Nashville Business Journal named us a winner of its 2016 Corporate Giving Awards.
Our Memphis associates volunteered on Habitat for Humanity’s 2016 Jimmy & Rosalynn Carter Work Project, which included 19 new homes in Bearwater Park.
Striving to ensure affordable housing in our markets is a cornerstone of our community involvement. Highlights of Pinnacle’s long-term involvement with the Federal Home Loan Bank of Cincinnati (FHLB) include helping secure nearly $13.6 million in grants since 2003, which we used to:
Pinnacle also has a long-standing relationship with Habitat for Humanity. Our current involvement consists of servicing 971 Habitat for Humanity loans with a total value of more than $38.4 million at no cost to Habitat or the homeowner.
In 2013, Pinnacle began an Individual Development Account program to match clients’ down payment funds. The clients must be referred to Pinnacle by one of our affordable housing partners and have contributed regularly to a savings account for at least six months. To date Pinnacle has matched up to $1,000 for 83 clients.