Total revenues increased 32.1 percent
linked-quarter annualized and 6.6 percent year-over-year
Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported
net income per diluted common share of $1.57 for the quarter ended
March 31, 2024, compared to net income per diluted common share of
$1.76 for the quarter ended March 31, 2023, a decrease of 10.8
percent.
Several meaningful items impacted first quarter 2024 results.
The firm’s allowance for credit losses increased to 1.12 percent of
total loans at March 31, 2024, compared to 1.08 percent at Dec. 31,
2023. Although, key loan quality metrics like the potential problem
loans to total loans ratio and the classified asset ratio remain
better than many of the firm's peers and lower than where the firm
has historically operated over the longer term, the firm determined
additional reserves were needed to account for incremental weakness
of one previously disclosed problem borrower and to better position
the firm to navigate the credit implications of a higher-for-longer
interest rate environment. Additionally, the firm recognized a
mortgage servicing asset associated with its Freddie Mac Small
Business Lending (SBL) platform of approximately $11.8 million,
which has been reflected in other noninterest income. Lastly, in
response to information provided by the FDIC during the quarter,
the firm increased its other noninterest expense by $7.3 million
for a FDIC special assessment. This is in addition to the $29.0
million that the company recognized in the fourth quarter of
2023.
"Inflation appears to be more difficult to tame than the Fed had
predicted," said M. Terry Turner, Pinnacle's President and Chief
Executive Officer. "Regardless of the economic landscape, our focus
continues to be on strengthening our balance sheet and growing our
earnings and tangible book value, while continuing to take steps
that we believe will position our firm for long-term growth.
"We continued to execute our unique business model during the
first quarter. We are reporting strong core earnings inclusive of a
meaningful provision for credit losses. We recruited 37 new revenue
producers during the quarter, including 14 in our newer markets of
Atlanta, Washington D.C., Birmingham and Jacksonville. And as
another demonstration of why we are so successful in hiring the
best bankers in our markets, FORTUNE and Great Place to Work®
recognized our firm as No. 11 on their list of the 100 Best
Companies to Work For in the United States. We have been on
FORTUNE’s top 100 list for the last eight years, but this is our
highest ranking, further demonstrating the staying power of our
culture, even as we have become a larger, high-growth bank.
"Our firm is uniquely positioned in what we believe are many of
the best banking markets in the Southeast. As a result, combined
with our distinctive operating model, we remain confident in our
ability to generate long-term sustainable growth in loans, deposits
and earnings in spite of the current economic volatility."
BALANCE SHEET GROWTH AND LIQUIDITY:
Total assets at March 31, 2024, were $48.9 billion, an increase
of approximately $934.3 million from Dec. 31, 2023, and $3.8
billion from March 31, 2023, reflecting a year-over-year increase
of 8.4 percent and a linked-quarter annualized increase of 7.8
percent, respectively. A further analysis of select balance sheet
trends follows:
Balances at
Linked- Quarter
Annualized % Change
Balances at
Year-over-Year %
Change
(dollars in thousands)
March 31, 2024
December 31, 2023
March 31, 2023
Loans
$
33,162,873
$
32,676,091
6.0
%
$
30,297,871
9.5
%
Securities
7,371,847
7,323,887
2.6
%
6,878,831
7.2
%
Other interest-earning assets
3,195,211
2,673,235
78.1
%
3,201,938
(0.2
)%
Total interest-earning assets
$
43,729,931
$
42,673,213
9.9
%
$
40,378,640
8.3
%
Core deposits:
Noninterest-bearing deposits
$
7,958,739
$
7,906,502
2.6
%
$
9,018,439
(11.8
)%
Interest-bearing core deposits(1)
26,679,871
25,832,415
13.1
%
23,035,672
15.8
%
Noncore deposits and other funding(2)
7,506,409
7,573,489
(3.5
)%
6,865,003
9.3
%
Total funding
$
42,145,019
$
41,312,406
8.1
%
$
38,919,114
8.3
%
(1):
Interest-bearing core deposits are
interest-bearing deposits, money market accounts and time deposits
less than $250,000 including reciprocating time and money market
deposits.
(2):
Noncore deposits and other funding
consists of time deposits greater than $250,000, securities sold
under agreements to repurchase, public funds, brokered deposits,
FHLB advances and subordinated debt.
Three months ended
March 31, 2024
December 31, 2023
March 31, 2023
Average loan to deposit ratio
84.73
%
84.05
%
83.97
%
Uninsured/uncollateralized deposits to
total deposits(1)
30.48
%
31.32
%
33.23
%
(1):
Includes the effect of placement of
deposits through the IntraFi network.
- Approximately 46.5 percent of first quarter 2024 loan growth
was related to commercial and industrial and owner-occupied
commercial real estate categories, two segments the firm intends to
continue to emphasize throughout the remainder of 2024.
- On-balance sheet liquidity, defined as cash and cash
equivalents plus unpledged securities, remained strong, totaling
$7.6 billion as of March 31, 2024, representing a $646.7 million
increase from the on-balance sheet liquidity level of $6.9 billion
as of Dec. 31, 2023. Increased deposit inflows during the quarter
contributed to the increase in other interest earning assets and
are expected to be used to fund future loan growth of the
firm.
- Noninterest bearing deposits increased 2.6 percent on a
linked-quarter annualized basis as of March 31, 2024, when compared
to Dec. 31, 2023. In comparison to March 31, 2023, noninterest
bearing deposits decreased by 11.8 percent. The average balance of
the firm’s noninterest bearing accounts was $31,353 at March 31,
2024, compared to $31,603 at Dec. 31, 2023.
"We are particularly pleased with our strong deposit growth
during the first quarter, which grew $862.2 million in the quarter,
a 9.0 percent linked-quarter annualized growth rate," Turner said.
"Importantly, our end-of-period noninterest-bearing demand deposit
accounts grew 2.6 percent linked-quarter annualized after having
experienced declining demand deposit volumes for several quarters.
During the first quarter, our loans grew at an annualized rate of
6.0 percent, which is slightly below what we expect for all of
2024. While we are benefited by operating in several of the best
banking markets in the Southeast, our loan and deposit growth is
primarily a result of the market share movement associated with our
ongoing hiring in those markets over the last several years."
PRE-TAX, PRE-PROVISION NET REVENUE (PPNR) GROWTH:
Pre-tax, pre-provision net revenues (PPNR) for the three months
ended March 31, 2024, were $185.8 million, a decrease of 2.2
percent from the $190.0 million recognized in the three months
ended March 31, 2023.
Three months ended
March 31,
(dollars in thousands)
2024
2023
% change
Revenues:
Net interest income
$
318,034
$
312,231
1.9
%
Noninterest income
110,103
89,529
23.0
%
Total revenues
428,137
401,760
6.6
%
Noninterest expense
242,365
211,727
14.5
%
Pre-tax, pre-provision net revenue
(PPNR)
185,772
190,033
(2.2
)%
Adjustments:
ORE expense (benefit)
84
99
(15.2
)%
FDIC special assessment
7,250
—
NM
Recognition of mortgage servicing
asset
(11,812
)
—
NM
Adjusted PPNR
$
181,294
$
190,132
(4.6
)%
Three months ended
March 31, 2024
December 31, 2023
March 31, 2023
Net interest margin
3.04
%
3.06
%
3.40
%
Efficiency ratio
56.61
%
63.37
%
52.70
%
Return on average assets
1.00
%
0.76
%
1.26
%
Return on average tangible common equity
(TCE)
12.11
%
9.53
%
15.43
%
Average loan to deposit ratio
84.73
%
84.05
%
83.97
%
- Revenue per fully diluted common share was $5.60 for the first
quarter of 2024, compared to $5.16 for the fourth quarter of 2023
and $5.28 for the first quarter of 2023, an increase of 6.1 percent
year-over-year.
- Net interest income for the first quarter of 2024, was $318.0
million, compared to $317.3 million for the fourth quarter of 2023
and $312.2 million for the first quarter of 2023, a year-over-year
growth rate of 1.9 percent. Net interest margin was 3.04 percent
for the first quarter of 2024, compared to 3.06 percent for the
fourth quarter of 2023 and 3.40 percent for the first quarter of
2023.
- Noninterest income for the first quarter of 2024, was $110.1
million, compared to $79.1 million for the fourth quarter of 2023
and $89.5 million for the first quarter of 2023, a year-over-year
increase of 23.0 percent.
- Wealth management revenues, which include investment, trust and
insurance services, were $26.0 million for the first quarter of
2024, compared to $23.5 million for the fourth quarter of 2023 and
$22.5 million for the first quarter of 2023, a year-over-year
increase of 15.7 percent. The increase in wealth management
revenues was attributable to several factors, but primarily is the
result of an increase in capacity with more revenue producers and
the placement of those producers in Pinnacle’s newer markets like
Washington D.C., Birmingham and others.
- During the first quarter of 2024, net gains from mortgage loans
sold were $2.9 million, compared to $879,000 in the fourth quarter
of 2023 and $2.1 million in the first quarter of 2023. Similar to
wealth management, the increase in mortgage fee income was
primarily attributable to increases in capacity with more
originators in Pinnacle's newer markets.
- Income from the firm's investment in Banker's Healthcare Group
(BHG) was $16.0 million for the first quarter of 2024, compared to
$14.4 million for the fourth quarter of 2023 and $19.1 million for
the first quarter of 2023, a year-over-year decline of 16.0
percent.
- BHG's loan originations decreased to $692 million in the first
quarter of 2024, compared to $786 million in the fourth quarter of
2023 and $1.0 billion in the first quarter of 2023.
- Loans sold to BHG's community bank partners were approximately
$533 million in the first quarter of 2024, compared to
approximately $446 million in the fourth quarter of 2023 and $704
million in the first quarter of 2023.
- BHG increased its reserves for on-balance sheet loan losses to
$306 million, or 10.3 percent of loans held for investment at March
31, 2024, compared to 9.3 percent at Dec. 31, 2023 and 5.2 percent
at March 31, 2023. The year-over-year increase in reserves as a
percentage of loans held for investment was impacted by BHG's
adoption for lifetime credit losses associated with its
implementation of the current expected credit loss (CECL)
methodology on Oct. 1, 2023.
- BHG increased its accrual for estimated losses attributable to
loan substitutions and prepayments to $391 million, or 5.7 percent
of the unpaid loan balances that were previously purchased by BHG's
community bank network, at March 31, 2024, compared to 5.4 percent,
or $357 million, at Dec. 31, 2023 and 5.81 percent, or $350
million, at March 31, 2023.
- Other noninterest income increased $24.1 million between the
first quarter of 2024 and the fourth quarter of 2023 and $17.6
million from the first quarter of 2023. Impacting other noninterest
income was approximately $11.8 million associated with the
aforementioned recognition of the SBL mortgage servicing asset, as
well as increased income from the firm’s Bank Owned Life Insurance
(BOLI) policies compared to the first quarter of 2023. In the
fourth quarter of 2023, the firm incurred approximately $7.2
million in policy surrender charges and $9.1 million in tax
penalties attributable to restructuring BOLI policies. The firm
believes the reimbursement ("payback") period from the date of the
restructuring should approximate 18 months.
- Noninterest expense for the quarter ended March 31, 2024, was
$242.4 million, compared to $251.2 million in the fourth quarter of
2023 and $211.7 million in the first quarter of 2023, reflecting a
year-over-year increase of 14.5 percent.
- Salaries and employee benefits were $146.0 million in the first
quarter of 2024, compared to $133.3 million in the fourth quarter
of 2023 and $135.7 million in the first quarter of 2023, reflecting
a year-over-year increase of 7.6 percent.
- Full-time equivalent associates increased to 3,386.5 at March
31, 2024 from 3,357.0 at Dec. 31, 2023 and 3,281.5 at March 31,
2023, a year-over-year increase of 3.2 percent.
- Incentive costs in the first quarter of 2024 were approximately
$1.7 million higher than the fourth quarter of 2023 and $1.1
million higher than the amounts recorded in the first quarter of
2023.
- Employee benefits costs reflect the seasonality of payroll
taxes, medical deductibles, and other benefits costs. Benefit costs
in the first quarter of 2024 were approximately $5.5 million higher
than the fourth quarter of 2023 and $898,000 higher than the
amounts recorded in the first quarter of 2023.
- Equipment and occupancy costs were $39.6 million in the first
quarter of 2024, compared to $38.0 million in the fourth quarter of
2023 and $30.4 million in the first quarter of 2023, reflecting a
year-over-year increase of 30.6 percent. Impacting the quarterly
changes in equipment and occupancy expense between the first
quarter of 2024 compared to the fourth quarter of 2023 was the
impact of new equipment and facilities annual rent escalators on
various properties and equipment that have been placed into
service. Compared to the first quarter of 2023, several factors
contributed to the increase of equipment and occupancy costs,
including new equipment and facilities, rent escalators on various
properties and the previously disclosed sale-leaseback transaction
executed in the second quarter of 2023.
- Noninterest expense categories, other than those specifically
noted above, were $56.7 million in the first quarter of 2024,
compared to $79.8 million in the fourth quarter of 2023 and $45.7
million in the first quarter of 2023, reflecting a year-over-year
increase of 24.2 percent. Primarily impacting the quarterly changes
in other noninterest expense between the fourth quarter of 2023 and
first quarter of 2024 was the impact of a reduction in the amount
of FDIC special assessment charges in the first quarter of 2024
compared to the fourth quarter of 2023. The special assessment also
impacted the comparison of other noninterest expense to the first
quarter of 2023, given there was no special assessment last
year.
"With the most recent CPI release, we have adjusted our forecast
for Fed funds rate decreases from four to two with the first of
those starting late in the third quarter of this year,” said Harold
R. Carpenter, Pinnacle's Chief Financial Officer. "Therefore, we
are modifying our net interest income outlook slightly for the
year. Our belief is that we will experience 8 to 10 percent growth
in net interest income for this year. As to fee income, we believe
the strong start in the first quarter means our core fee revenues
should be higher than originally anticipated for 2024. Accordingly,
excluding the impact of BHG, the recognition of the $11.8 million
of mortgage servicing rights in the first quarter of this year and,
in the case of 2023, the $85.7 million gain on the sale of fixed
assets as a result of the sale-leaseback transaction, $19.7 million
in losses on sale of investments securities and $7.2 million in
BOLI restructuring charges, we believe our growth in fee revenues
should approximate 10 to 14 percent in 2024 over 2023.
"We continue to estimate that BHG fee income should approximate
a mid-single digit percentage increase in 2024 over the $85.4
million in 2023. BHG's first quarter was impacted by the successful
completion of their ninth securitization issuance of approximately
$300 million. This securitization was comprised completely of
consumer loans with a yield difference between the borrower's
coupon rate and the securitization borrowing rate of approximately
10.1 percent, one of the highest spreads for a securitization by
BHG in its history, reflective of the significant amount of
interest BHG received for the transaction. BHG's ability to access
the capital markets to secure incremental funding through
securitizations of its held-for-investment loan portfolio has
contributed to additional flexibility for BHG to fund its
operations.
"Excluding the additional FDIC special assessment in the first
quarter of 2024, our operating expense was in line with our
expectations. We did reduce our anticipated incentive costs for the
first quarter primarily as a result of increased provision expense
triggered largely by the increase in our allowance for credit
losses. We currently are accruing for payout on our annual cash
incentive plan at approximately 80 percent of target, less than we
had originally planned. Even through all of these matters, we are
maintaining our expense outlook at $950 million to $975 million for
the year, exclusive of the impact of the FDIC special assessments
we incurred in the first quarter and any additional assessments the
FDIC may decide to impose this year."
CAPITAL AND SOUNDNESS:
As of
March 31, 2024
December 31, 2023
March 31, 2023
Shareholders' equity to total assets
12.5
%
12.6
%
12.6
%
Tangible common equity to tangible
assets
8.5
%
8.6
%
8.3
%
Book value per common share
$
76.23
$
75.80
$
71.24
Tangible book value per common share
$
51.98
$
51.38
$
46.75
Annualized net loan charge-offs to avg.
loans (1)
0.20
%
0.17
%
0.10
%
Nonperforming assets to total loans, ORE
and other nonperforming assets (NPAs)
0.33
%
0.27
%
0.15
%
Classified asset ratio (Pinnacle Bank)
(2)
4.94
%
5.22
%
2.71
%
Construction and land development loans as
a percentage of total capital(3)
77.50
%
84.20
%
88.50
%
Construction and land development,
non-owner occupied commercial real estate and multi-family loans as
a percentage of total capital(3)
258.00
%
259.00
%
261.10
%
Allowance for credit losses (ACL) to total
loans
1.12
%
1.08
%
1.04
%
(1):
Annualized net loan charge-offs to average
loans ratios are computed by annualizing quarterly net loan
charge-offs and dividing the result by average loans for the
quarter.
(2):
Classified assets as a percentage of Tier
1 capital plus allowance for credit losses.
(3):
Calculated using the same guidelines as
are used in the Federal Financial Institutions Examination
Council's Uniform Bank Performance Report.
- The allowance and provision for credit losses both increased at
March 31, 2024, over Dec. 31, 2023, and March 31, 2023, to account
for incremental weakness of a certain borrower as well as better
position the firm to navigate the credit implications of a
higher-for-longer interest rate environment.
- Nonperforming assets increased at March 31, 2024, over Dec. 31,
2023, and March 31, 2023, primarily as a result of downgrading of
two loans, one in the Company's construction portfolio and another
in its C&I portfolio, each experiencing cash flow challenges at
this time.
- Both of the firm’s ratios associated with construction and land
development and CRE loans in comparison to total capital decreased
from the prior quarter. Importantly, and consistent with the firm’s
target of achieving a threshold of below 70 percent, the firm’s
ratio of construction and land development in relation to total
capital at March 31, 2024 showed continued progress and decreased
to 77.5 percent.
"Net charge-offs to average loans for the first quarter of 2024
increased during the quarter to 0.20 percent from 0.17 percent in
the prior quarter," Carpenter said. "We also experienced modest
increases in nonperforming loans in relation to total loans and,
conversely, we experienced improvement in similar ratios for past
dues and potential problem loans. Net charge-offs at 0.20 percent
compare favorably to longer-term historical levels, as do our
ratios for nonperforming assets, past dues and potential problem
loans. That said, we strive to be diligent with respect to
monitoring our entire loan portfolio. A higher-for-longer rate
environment coupled with stubborn inflation has required banks to
maintain a higher level of caution with respect to credit.
Accordingly, we now estimate net charge-offs for the firm may range
between 0.20 percent and 0.25 percent of average loans for
2024.
"Also, during the quarter, we experienced an increase in book
value per common share from $75.80 to $76.23, an annualized
linked-quarter increase of 2.3 percent and an increase in tangible
book value per common share from $51.38 at Dec. 31, 2023 to $51.98
at March 31, 2024, an annualized linked-quarter increase of 4.7
percent. As we've previously communicated, increasing our tangible
book value per common share remains an important priority for our
firm’s leadership."
WEBCAST AND CONFERENCE CALL INFORMATION
Pinnacle will host a webcast and conference call at 8:30 a.m.
CDT on April 23, 2024, to discuss first quarter 2024 results and
other matters. To access the call for audio only, please call
1-877-209-7255. For the presentation and streaming audio, please
access the webcast on the investor relations page of Pinnacle's
website at www.pnfp.com.
For those unable to participate in the webcast, it will be
archived on the investor relations page of Pinnacle's website at
www.pnfp.com for 90 days following the presentation.
Pinnacle Financial Partners provides a full range of banking,
investment, trust, mortgage and insurance products and services
designed for businesses and their owners and individuals interested
in a comprehensive relationship with their financial institution.
The firm is the No. 1 and fastest growing bank in the
Nashville-Murfreesboro-Franklin MSA, according to 2023 deposit data
from the FDIC. Pinnacle is No. 11 on the 2024 list of 100 Best
Companies to Work For® in the U.S., its eighth consecutive
appearance and was recognized by American Banker as one of
America's Best Banks to Work For 11 years in a row and No. 1 among
banks with more than $10 billion in assets in 2023.
Pinnacle Bank owns a 49 percent interest in Bankers Healthcare
Group (BHG), which provides innovative, hassle-free financial
solutions to healthcare practitioners and other professionals.
Great Place to Work and FORTUNE ranked BHG No. 4 on its 2021 list
of Best Workplaces in New York State in the small/medium business
category.
The firm began operations in a single location in downtown
Nashville, TN in October 2000 and has since grown to approximately
$48.9 billion in assets as of March 31, 2024. As the second-largest
bank holding company in Tennessee, Pinnacle operates in several
primarily urban markets across the Southeast.
Additional information concerning Pinnacle, which is included in
the Nasdaq Financial-100 Index, can be accessed at
www.pnfp.com.
Forward-Looking Statements
All statements, other than statements of historical fact,
included in this press release, are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. The words "expect,"
"anticipate," "intend," "may," "should," "plan," "believe," "seek,"
"estimate" and similar expressions are intended to identify such
forward-looking statements, but other statements not based on
historical information may also be considered forward-looking
statements. These forward-looking statements are subject to known
and unknown risks, uncertainties and other factors that could cause
the actual results to differ materially from the statements,
including, but not limited to: (i) deterioration in the financial
condition of borrowers of Pinnacle Bank and its subsidiaries or
BHG, including as a result of the negative impact of inflationary
pressures and challenging economic conditions on our and BHG's
customers and their businesses, resulting in significant increases
in loan losses and provisions for those losses and, in the case of
BHG, substitutions; (ii) fluctuations or differences in interest
rates on loans or deposits from those that Pinnacle Financial is
modeling or anticipating, including as a result of Pinnacle Bank's
inability to better match deposit rates with the changes in the
short-term rate environment, or that affect the yield curve; (iii)
the sale of investment securities in a loss position before their
value recovers, including as a result of asset liability management
strategies or in response to liquidity needs; (iv) adverse
conditions in the national or local economies including in Pinnacle
Financial's markets throughout the Southeast region of the United
States, particularly in commercial and residential real estate
markets; (v) the inability of Pinnacle Financial, or entities in
which it has significant investments, like BHG, to maintain the
long-term historical growth rate of its, or such entities', loan
portfolio; (vi) the ability to grow and retain low-cost core
deposits and retain large, uninsured deposits, including during
times when Pinnacle Bank is seeking to limit the rates it pays on
deposits or uncertainty exists in the financial services sector;
(vii) changes in loan underwriting, credit review or loss reserve
policies associated with economic conditions, examination
conclusions, or regulatory developments; (viii) effectiveness of
Pinnacle Financial's asset management activities in improving,
resolving or liquidating lower-quality assets; (ix) the impact of
competition with other financial institutions, including pricing
pressures and the resulting impact on Pinnacle Financial’s results,
including as a result of the negative impact to net interest margin
from rising deposit and other funding costs; (x) the results of
regulatory examinations of Pinnacle Financial, Pinnacle Bank or
BHG, or companies with whom they do business; (xi) BHG's ability to
profitably grow its business and successfully execute on its
business plans; (xii) risks of expansion into new geographic or
product markets; (xiii) any matter that would cause Pinnacle
Financial to conclude that there was impairment of any asset,
including goodwill or other intangible assets; (xiv) the
ineffectiveness of Pinnacle Bank's hedging strategies, or the
unexpected counterparty failure or hedge failure of the underlying
hedges; (xv) reduced ability to attract additional financial
advisors (or failure of such advisors to cause their clients to
switch to Pinnacle Bank), to retain financial advisors (including
as a result of the competitive environment for associates) or
otherwise to attract customers from other financial institutions;
(xvi) deterioration in the valuation of other real estate owned and
increased expenses associated therewith; (xvii) inability to comply
with regulatory capital requirements, including those resulting
from changes to capital calculation methodologies, required capital
maintenance levels or regulatory requests or directives,
particularly if Pinnacle Bank's level of applicable commercial real
estate loans were to exceed percentage levels of total capital in
guidelines recommended by its regulators; (xviii) approval of the
declaration of any dividend by Pinnacle Financial's board of
directors; (xix) the vulnerability of Pinnacle Bank's network and
online banking portals, and the systems of parties with whom
Pinnacle Bank contracts, to unauthorized access, computer viruses,
phishing schemes, spam attacks, human error, natural disasters,
power loss and other security breaches; (xx) the possibility of
increased compliance and operational costs as a result of increased
regulatory oversight (including by the Consumer Financial
Protection Bureau), including oversight of companies in which
Pinnacle Financial or Pinnacle Bank have significant investments,
like BHG, and the development of additional banking products for
Pinnacle Bank's corporate and consumer clients; (xxi) Pinnacle
Financial's ability to identify potential candidates for,
consummate, and achieve synergies from, potential future
acquisitions; (xxii) difficulties and delays in integrating
acquired businesses or fully realizing costs savings and other
benefits from acquisitions; (xxiii) the risks associated with
Pinnacle Bank being a minority investor in BHG, including the risk
that the owners of a majority of the equity interests in BHG decide
to sell the company or all or a portion of their ownership
interests in BHG (triggering a similar sale by Pinnacle Bank);
(xxiv) changes in state and federal legislation, regulations or
policies applicable to banks and other financial service providers,
like BHG, including regulatory or legislative developments; (xxv)
fluctuations in the valuations of Pinnacle Financial's equity
investments and the ultimate success of such investments; (xxvi)
the availability of and access to capital; (xxvii) adverse results
(including costs, fines, reputational harm, inability to obtain
necessary approvals and/or other negative effects) from current or
future litigation, regulatory examinations or other legal and/or
regulatory actions involving Pinnacle Financial, Pinnacle Bank or
BHG; and (xxviii) general competitive, economic, political and
market conditions. Additional factors which could affect the
forward looking statements can be found in Pinnacle Financial's
Annual Report on Form 10-K for the year ended December 31, 2023,
and subsequently filed Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K filed with the SEC and available on the SEC's
website at http://www.sec.gov. Pinnacle Financial disclaims any
obligation to update or revise any forward-looking statements
contained in this press release, which speak only as of the date
hereof, whether as a result of new information, future events or
otherwise.
Non-GAAP Financial Matters
This release contains certain non-GAAP financial measures,
including, without limitation, total revenues, net income to common
shareholders, earnings per diluted common share, revenue per
diluted common share, PPNR, efficiency ratio, noninterest expense,
noninterest income and the ratio of noninterest expense to average
assets, excluding in certain instances the impact of expenses
related to other real estate owned, gains or losses on sale of
investment securities, gains associated with the sale-leaseback
transaction completed in the second quarter of 2023, losses on the
restructuring of certain BOLI contracts, charges related to the
FDIC special assessment, income associated with the recognition of
a mortgage servicing asset in the first quarter of 2024 and other
matters for the accounting periods presented. This release may also
contain certain other non-GAAP capital ratios and performance
measures that exclude the impact of goodwill and core deposit
intangibles associated with Pinnacle Financial's acquisitions of
BNC, Avenue Bank, Magna Bank, CapitalMark Bank & Trust,
Mid-America Bancshares, Inc., Cavalry Bancorp, Inc. and other
acquisitions which collectively are less material to the non-GAAP
measure as well as the impact of Pinnacle Financial's Series B
Preferred Stock. The presentation of the non-GAAP financial
information is not intended to be considered in isolation or as a
substitute for any measure prepared in accordance with GAAP.
Because non-GAAP financial measures presented in this release are
not measurements determined in accordance with GAAP and are
susceptible to varying calculations, these non-GAAP financial
measures, as presented, may not be comparable to other similarly
titled measures presented by other companies.
Pinnacle Financial believes that these non-GAAP financial
measures facilitate making period-to-period comparisons and are
meaningful indications of its operating performance. In addition,
because intangible assets such as goodwill and the core deposit
intangible, and the other items excluded each vary extensively from
company to company, Pinnacle Financial believes that the
presentation of this information allows investors to more easily
compare Pinnacle Financial's results to the results of other
companies. Pinnacle Financial's management utilizes this non-GAAP
financial information to compare Pinnacle Financial's operating
performance for 2024 versus certain periods in 2023 and to
internally prepared projections.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS –
UNAUDITED
(dollars in thousands, except for share
and per share data)
March 31, 2024
December 31, 2023
March 31, 2023
ASSETS
Cash and noninterest-bearing due from
banks
$
175,826
$
228,620
$
209,255
Restricted cash
58,285
86,873
13,049
Interest-bearing due from banks
2,472,250
1,914,856
2,597,172
Cash and cash equivalents
2,706,361
2,230,349
2,819,476
Securities purchased with agreement to
resell
554,022
558,009
509,872
Securities available-for-sale, at fair
value
4,378,718
4,317,530
3,825,203
Securities held-to-maturity (fair value of
$2.7 billion, $2.8 billion, and $2.8 billion, net of allowance for
credit losses of $1.7 million, $1.7 million, and $1.9 million at
March 31, 2024, Dec. 31, 2023, and March 31, 2023,
respectively)
2,993,129
3,006,357
3,053,628
Consumer loans held-for-sale
104,586
104,217
58,758
Commercial loans held-for-sale
6,068
9,280
23,087
Loans
33,162,873
32,676,091
30,297,871
Less allowance for credit losses
(371,337
)
(353,055
)
(313,841
)
Loans, net
32,791,536
32,323,036
29,984,030
Premises and equipment, net
265,579
256,877
354,713
Equity method investment
457,657
445,223
438,303
Accrued interest receivable
219,887
217,491
143,965
Goodwill
1,846,973
1,846,973
1,846,973
Core deposits and other intangible
assets
25,881
27,465
32,761
Other real estate owned
2,766
3,937
7,802
Other assets
2,541,033
2,613,139
2,021,016
Total assets
$
48,894,196
$
47,959,883
$
45,119,587
LIABILITIES AND SHAREHOLDERS'
EQUITY
Deposits:
Noninterest-bearing
$
7,958,739
$
7,906,502
$
9,018,439
Interest-bearing
12,178,471
11,365,349
8,944,353
Savings and money market accounts
14,761,573
14,427,206
14,136,850
Time
4,503,242
4,840,753
4,078,911
Total deposits
39,402,025
38,539,810
36,178,553
Securities sold under agreements to
repurchase
201,418
209,489
149,777
Federal Home Loan Bank advances
2,116,417
2,138,169
2,166,508
Subordinated debt and other borrowings
425,159
424,938
424,276
Accrued interest payable
58,069
66,967
31,728
Other liabilities
587,257
544,722
484,617
Total liabilities
42,790,345
41,924,095
39,435,459
Preferred stock, no par value, 10.0
million shares authorized; 225,000 shares non-cumulative perpetual
preferred stock, Series B, liquidation preference $225.0 million,
issued and outstanding at March 31, 2024, Dec. 31, 2023, and March
31, 2023, respectively
217,126
217,126
217,126
Common stock, par value $1.00; 180.0
million shares authorized; 77.2 million, 76.8 million and 76.7
million shares issued and outstanding at March 31, 2024, Dec. 31,
2023, and March 31, 2023, respectively
77,219
76,767
76,739
Additional paid-in capital
3,100,817
3,109,493
3,079,020
Retained earnings
2,887,804
2,784,927
2,458,006
Accumulated other comprehensive loss, net
of taxes
(179,115
)
(152,525
)
(146,763
)
Total shareholders' equity
6,103,851
6,035,788
5,684,128
Total liabilities and shareholders'
equity
$
48,894,196
$
47,959,883
$
45,119,587
This information is preliminary
and based on company data available at the time of the
presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME –
UNAUDITED
(dollars in thousands, except for share
and per share data)
Three months ended
March 31, 2024
December 31, 2023
March 31, 2023
Interest income:
Loans, including fees
$
541,199
$
530,604
$
431,902
Securities
Taxable
44,470
42,458
29,358
Tax-exempt
24,600
25,035
23,802
Federal funds sold and other
40,214
46,699
20,977
Total interest income
650,483
644,796
506,039
Interest expense:
Deposits
300,968
297,556
176,589
Securities sold under agreements to
repurchase
1,399
1,295
595
FHLB advances and other borrowings
30,082
28,693
16,624
Total interest expense
332,449
327,544
193,808
Net interest income
318,034
317,252
312,231
Provision for credit losses
34,497
16,314
18,767
Net interest income after provision for
credit losses
283,537
300,938
293,464
Noninterest income:
Service charges on deposit accounts
13,439
12,660
11,718
Investment services
14,751
13,410
11,595
Insurance sales commissions
3,852
3,072
4,464
Gains on mortgage loans sold, net
2,879
879
2,053
Investment gains on sales, net
—
14
—
Trust fees
7,415
6,987
6,429
Income from equity method investment
16,035
14,432
19,079
Gain on sale of fixed assets
58
102
135
Other noninterest income
51,674
27,532
34,056
Total noninterest income
110,103
79,088
89,529
Noninterest expense:
Salaries and employee benefits
146,010
133,333
135,708
Equipment and occupancy
39,646
38,021
30,353
Other real estate, net
84
125
99
Marketing and other business
development
6,125
6,829
5,942
Postage and supplies
2,771
2,840
2,819
Amortization of intangibles
1,584
1,751
1,794
Other noninterest expense
46,145
68,269
35,012
Total noninterest expense
242,365
251,168
211,727
Income before income taxes
151,275
128,858
171,266
Income tax expense
27,331
33,879
33,995
Net income
123,944
94,979
137,271
Preferred stock dividends
(3,798
)
(3,798
)
(3,798
)
Net income available to common
shareholders
$
120,146
$
91,181
$
133,473
Per share information:
Basic net income per common share
$
1.58
$
1.20
$
1.76
Diluted net income per common share
$
1.57
$
1.19
$
1.76
Weighted average common shares
outstanding:
Basic
76,278,453
76,068,016
75,921,282
Diluted
76,428,885
76,823,991
76,042,328
This information is preliminary
and based on company data available at the time of the
presentation.
PINNACLE FINANCIAL PARTNERS,
INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
SHAREHOLDERS' EQUITY
(Unaudited)
(dollars and shares in thousands)
Preferred
Stock
Amount
Common Stock
Additional Paid-in
Capital
Retained Earnings
Accumulated Other Comp. Income
(Loss), net
Total Shareholders'
Equity
Shares
Amounts
Balance at December 31, 2022
$
217,126
76,454
$
76,454
$
3,074,867
$
2,341,706
$
(190,761
)
$
5,519,392
Exercise of employee common stock options
& related tax benefits
—
40
40
920
—
—
960
Preferred dividends paid ($16.88 per
share)
—
—
—
—
(3,798
)
—
(3,798
)
Common dividends paid ($0.22 per
share)
—
—
—
—
(17,173
)
(17,173
)
Issuance of restricted common shares, net
of forfeitures
—
193
193
(193
)
—
—
—
Restricted shares withheld for taxes &
related tax benefits
—
(41
)
(41
)
(3,035
)
—
—
(3,076
)
Issuance of common stock pursuant to
restricted stock unit (RSU) and performance stock unit (PSU)
agreements, net of shares withheld for taxes & related tax
benefits
—
93
93
(3,738
)
—
—
(3,645
)
Compensation expense for restricted shares
& performance stock units
—
—
—
10,199
—
—
10,199
Net income
—
—
—
—
137,271
—
137,271
Other comprehensive gain
—
—
—
—
—
43,998
43,998
Balance at March 31, 2023
$
217,126
76,739
$
76,739
$
3,079,020
$
2,458,006
$
(146,763
)
$
5,684,128
Balance at December 31, 2023
$
217,126
76,767
$
76,767
$
3,109,493
$
2,784,927
$
(152,525
)
$
6,035,788
Exercise of employee common stock options
& related tax benefits
—
—
—
—
—
—
—
Preferred dividends paid ($16.88 per
share)
—
—
—
—
(3,798
)
—
(3,798
)
Common dividends paid ($0.22 per
share)
—
—
—
—
(17,269
)
—
(17,269
)
Issuance of restricted common shares, net
of forfeitures
—
190
190
(190
)
—
—
—
Restricted shares withheld for taxes &
related tax benefits
—
(49
)
(49
)
(4,088
)
—
—
(4,137
)
Issuance of common stock pursuant to RSU
and PSU agreements, net of shares withheld for taxes & related
tax benefits
—
311
311
(14,738
)
—
—
(14,427
)
Compensation expense for restricted shares
& performance stock units
—
—
—
10,340
—
—
10,340
Net income
—
—
—
—
123,944
—
123,944
Other comprehensive loss
—
—
—
—
—
(26,590
)
(26,590
)
Balance at March 31, 2024
$
217,126
77,219
$
77,219
$
3,100,817
$
2,887,804
$
(179,115
)
$
6,103,851
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA –
UNAUDITED
(dollars in thousands)
March
December
September
June
March
December
2024
2023
2023
2023
2023
2022
Balance sheet data, at quarter
end:
Commercial and industrial loans
$
11,893,198
11,666,691
11,307,611
10,983,911
10,723,327
10,241,362
Commercial real estate - owner occupied
loans
4,044,973
4,044,896
3,944,616
3,845,359
3,686,796
3,587,257
Commercial real estate - investment
loans
6,138,711
5,929,595
5,957,426
5,682,652
5,556,484
5,277,454
Commercial real estate - multifamily and
other loans
1,924,931
1,605,899
1,490,184
1,488,236
1,331,249
1,265,165
Consumer real estate - mortgage loans
4,828,416
4,851,531
4,768,780
4,692,673
4,531,285
4,435,046
Construction and land development
loans
3,818,334
4,041,081
3,942,143
3,904,774
3,909,024
3,679,498
Consumer and other loans
514,310
536,398
532,524
555,685
559,706
555,823
Total loans
33,162,873
32,676,091
31,943,284
31,153,290
30,297,871
29,041,605
Allowance for credit losses
(371,337
)
(353,055
)
(346,192
)
(337,459
)
(313,841
)
(300,665
)
Securities
7,371,847
7,323,887
6,882,276
6,623,457
6,878,831
6,637,920
Total assets
48,894,196
47,959,883
47,523,790
46,875,982
45,119,587
41,970,021
Noninterest-bearing deposits
7,958,739
7,906,502
8,324,325
8,436,799
9,018,439
9,812,744
Total deposits
39,402,025
38,539,810
38,295,809
37,722,661
36,178,553
34,961,238
Securities sold under agreements to
repurchase
201,418
209,489
195,999
163,774
149,777
194,910
FHLB advances
2,116,417
2,138,169
2,110,598
2,200,917
2,166,508
464,436
Subordinated debt and other borrowings
425,159
424,938
424,718
424,497
424,276
424,055
Total shareholders' equity
6,103,851
6,035,788
5,837,641
5,843,759
5,684,128
5,519,392
Balance sheet data, quarterly
averages:
Total loans
$
33,041,954
32,371,506
31,529,854
30,882,205
29,633,640
28,402,197
Securities
7,307,201
6,967,488
6,801,285
6,722,247
6,765,126
6,537,262
Federal funds sold and other
3,274,062
3,615,908
4,292,956
3,350,705
2,100,757
1,828,588
Total earning assets
43,623,217
42,954,902
42,624,095
40,955,157
38,499,523
36,768,047
Total assets
48,311,260
47,668,519
47,266,199
45,411,961
42,983,854
41,324,251
Noninterest-bearing deposits
7,962,217
8,342,572
8,515,733
8,599,781
9,332,317
10,486,233
Total deposits
38,995,709
38,515,560
38,078,665
36,355,859
35,291,775
34,177,281
Securities sold under agreements to
repurchase
210,888
202,601
184,681
162,429
219,082
199,610
FHLB advances
2,214,489
2,112,809
2,132,638
2,352,045
1,130,356
701,813
Subordinated debt and other borrowings
428,281
426,999
426,855
426,712
426,564
427,503
Total shareholders' equity
6,082,616
5,889,075
5,898,196
5,782,239
5,605,604
5,433,274
Statement of operations data, for the
three months ended:
Interest income
$
650,483
644,796
627,294
575,239
506,039
451,178
Interest expense
332,449
327,544
310,052
259,846
193,808
131,718
Net interest income
318,034
317,252
317,242
315,393
312,231
319,460
Provision for credit losses
34,497
16,314
26,826
31,689
18,767
24,805
Net interest income after provision for
credit losses
283,537
300,938
290,416
283,704
293,464
294,655
Noninterest income
110,103
79,088
90,797
173,839
89,529
82,321
Noninterest expense
242,365
251,168
213,233
211,641
211,727
202,047
Income before income taxes
151,275
128,858
167,980
245,902
171,266
174,929
Income tax expense
27,331
33,879
35,377
48,603
33,995
37,082
Net income
123,944
94,979
132,603
197,299
137,271
137,847
Preferred stock dividends
(3,798
)
(3,798
)
(3,798
)
(3,798
)
(3,798
)
(3,798
)
Net income available to common
shareholders
$
120,146
91,181
128,805
193,501
133,473
134,049
Profitability and other ratios:
Return on avg. assets (1)
1.00
%
0.76
%
1.08
%
1.71
%
1.26
%
1.29
%
Return on avg. equity (1)
7.94
%
6.14
%
8.66
%
13.42
%
9.66
%
9.79
%
Return on avg. common equity (1)
8.24
%
6.38
%
9.00
%
13.95
%
10.05
%
10.20
%
Return on avg. tangible common equity
(1)
12.11
%
9.53
%
13.43
%
21.06
%
15.43
%
15.95
%
Common stock dividend payout ratio
(14)
12.59
%
12.26
%
11.35
%
11.04
%
12.07
%
12.26
%
Net interest margin (2)
3.04
%
3.06
%
3.06
%
3.20
%
3.40
%
3.60
%
Noninterest income to total revenue
(3)
25.72
%
19.95
%
22.25
%
35.53
%
22.28
%
20.49
%
Noninterest income to avg. assets (1)
0.92
%
0.66
%
0.76
%
1.54
%
0.84
%
0.79
%
Noninterest exp. to avg. assets (1)
2.02
%
2.09
%
1.79
%
1.87
%
2.00
%
1.94
%
Efficiency ratio (4)
56.61
%
63.37
%
52.26
%
43.26
%
52.70
%
50.29
%
Avg. loans to avg. deposits
84.73
%
84.05
%
82.80
%
84.94
%
83.97
%
83.10
%
Securities to total assets
15.08
%
15.27
%
14.48
%
14.13
%
15.25
%
15.82
%
This information is preliminary
and based on company data available at the time of the
presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND
EXPENSE, RATES AND YIELDS-UNAUDITED
(dollars in thousands)
Three months ended
Three months ended
March 31, 2024
March 31, 2023
Average Balances
Interest
Rates/ Yields
Average Balances
Interest
Rates/ Yields
Interest-earning assets
Loans (1) (2)
$
33,041,954
$
541,199
6.67
%
$
29,633,640
$
431,902
6.00
%
Securities
Taxable
3,919,534
44,470
4.56
%
3,508,946
29,358
3.39
%
Tax-exempt (2)
3,387,667
24,600
3.48
%
3,256,180
23,802
3.54
%
Interest-bearing due from banks
2,476,800
32,753
5.32
%
1,392,492
15,941
4.64
%
Resell agreements
543,788
3,858
2.85
%
512,660
3,329
2.63
%
Federal funds sold
—
—
—
%
—
(9
)
—
%
Other
253,474
3,603
5.72
%
195,605
1,716
3.56
%
Total interest-earning assets
43,623,217
$
650,483
6.11
%
38,499,523
$
506,039
5.45
%
Nonearning assets
Intangible assets
1,873,871
1,880,890
Other nonearning assets
2,814,172
2,603,441
Total assets
$
48,311,260
$
42,983,854
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking
11,567,773
112,728
3.92
%
7,793,823
52,474
2.73
%
Savings and money market
14,608,687
134,752
3.71
%
14,377,996
97,519
2.75
%
Time
4,857,032
53,488
4.43
%
3,787,639
26,596
2.85
%
Total interest-bearing deposits
31,033,492
300,968
3.90
%
25,959,458
176,589
2.76
%
Securities sold under agreements to
repurchase
210,888
1,399
2.67
%
219,082
595
1.10
%
Federal Home Loan Bank advances
2,214,489
24,120
4.38
%
1,130,356
10,970
3.94
%
Subordinated debt and other borrowings
428,281
5,962
5.60
%
426,564
5,654
5.38
%
Total interest-bearing liabilities
33,887,150
332,449
3.95
%
27,735,460
193,808
2.83
%
Noninterest-bearing deposits
7,962,217
—
—
9,332,317
—
—
Total deposits and interest-bearing
liabilities
41,849,367
$
332,449
3.20
%
37,067,777
$
193,808
2.12
%
Other liabilities
379,277
310,473
Shareholders' equity
6,082,616
5,605,604
Total liabilities and shareholders'
equity
$
48,311,260
$
42,983,854
Net interest
income
$
318,034
$
312,231
Net interest spread (3)
2.16
%
2.61
%
Net interest margin (4)
3.04
%
3.40
%
(1) Average balances of nonperforming
loans are included in the above amounts.
(2) Yields computed on tax-exempt
instruments on a tax equivalent basis and included $11.8 million of
taxable equivalent income for the three months ended March 31, 2024
compared to $10.9 million for the three months ended March 31,
2023. The tax-exempt benefit has been reduced by the projected
impact of tax-exempt income that will be disallowed pursuant to IRS
Regulations as of and for the then current period presented.
(3) Yields realized on interest-bearing
assets less the rates paid on interest-bearing liabilities. The net
interest spread calculation excludes the impact of demand deposits.
Had the impact of demand deposits been included, the net interest
spread for the three months ended March 31, 2024 would have been
2.91% compared to a net interest spread of 3.32% for the three
months ended March 31, 2023.
(4) Net interest margin is the result of
annualized net interest income calculated on a tax equivalent basis
divided by average interest-earning assets for the period.
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA –
UNAUDITED
(dollars in thousands)
March
December
September
June
March
December
2024
2023
2023
2023
2023
2022
Asset quality information and
ratios:
Nonperforming assets:
Nonaccrual loans
$
108,325
82,288
42,950
44,289
36,988
38,116
ORE and other nonperforming assets
(NPAs)
2,766
4,347
3,019
3,105
7,802
7,952
Total nonperforming assets
$
111,091
86,635
45,969
47,394
44,790
46,068
Past due loans over 90 days and still
accruing interest
$
5,273
6,004
4,969
5,257
5,284
4,406
Accruing purchase credit deteriorated
loans
$
6,222
6,501
7,010
7,415
7,684
8,060
Net loan charge-offs
$
16,215
13,451
18,093
9,771
7,291
11,729
Allowance for credit losses to nonaccrual
loans
342.8
%
429.0
%
806.0
%
762.0
%
848.5
%
788.8
%
As a percentage of total loans:
Past due accruing loans over 30 days
0.17
%
0.23
%
0.16
%
0.14
%
0.14
%
0.15
%
Potential problem loans
0.28
%
0.39
%
0.42
%
0.32
%
0.22
%
0.19
%
Allowance for credit losses
1.12
%
1.08
%
1.08
%
1.08
%
1.04
%
1.04
%
Nonperforming assets to total loans, ORE
and other NPAs
0.33
%
0.27
%
0.14
%
0.15
%
0.15
%
0.16
%
Classified asset ratio (Pinnacle Bank)
(6)
4.9
%
5.2
%
4.6
%
3.3
%
2.7
%
2.4
%
Annualized net loan charge-offs to avg.
loans (5)
0.20
%
0.17
%
0.23
%
0.13
%
0.10
%
0.17
%
Interest rates and yields:
Loans
6.67
%
6.62
%
6.50
%
6.30
%
6.00
%
5.54
%
Securities
4.06
%
4.12
%
3.81
%
3.66
%
3.47
%
3.19
%
Total earning assets
6.11
%
6.09
%
5.95
%
5.74
%
5.45
%
5.02
%
Total deposits, including non-interest
bearing
3.10
%
3.07
%
2.92
%
2.52
%
2.03
%
1.40
%
Securities sold under agreements to
repurchase
2.67
%
2.54
%
2.30
%
1.93
%
1.10
%
0.94
%
FHLB advances
4.38
%
4.26
%
4.22
%
4.20
%
3.94
%
3.04
%
Subordinated debt and other borrowings
5.60
%
5.59
%
5.54
%
5.44
%
5.38
%
4.98
%
Total deposits and interest-bearing
liabilities
3.20
%
3.15
%
3.01
%
2.65
%
2.12
%
1.47
%
Capital and other ratios (6):
Pinnacle Financial ratios:
Shareholders' equity to total assets
12.5
%
12.6
%
12.3
%
12.5
%
12.6
%
13.2
%
Common equity Tier one
10.4
%
10.3
%
10.3
%
10.2
%
9.9
%
10.0
%
Tier one risk-based
10.9
%
10.8
%
10.9
%
10.8
%
10.5
%
10.5
%
Total risk-based
12.9
%
12.7
%
12.8
%
12.7
%
12.4
%
12.4
%
Leverage
9.5
%
9.4
%
9.4
%
9.5
%
9.6
%
9.7
%
Tangible common equity to tangible
assets
8.5
%
8.6
%
8.2
%
8.3
%
8.3
%
8.5
%
Pinnacle Bank ratios:
Common equity Tier one
11.3
%
11.1
%
11.2
%
11.1
%
10.8
%
10.9
%
Tier one risk-based
11.3
%
11.1
%
11.2
%
11.1
%
10.8
%
10.9
%
Total risk-based
12.2
%
12.0
%
12.0
%
11.9
%
11.6
%
11.6
%
Leverage
9.7
%
9.7
%
9.7
%
9.8
%
9.9
%
10.1
%
Construction and land development
loans
as a percentage of total capital (17)
77.5
%
84.2
%
83.1
%
84.5
%
88.5
%
85.9
%
Non-owner occupied commercial real estate
and
multi-family as a percentage of total
capital (17)
258.0
%
259.0
%
256.4
%
256.7
%
261.1
%
249.6
%
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA –
UNAUDITED
(dollars in thousands, except per share
data)
March
December
September
June
March
December
2024
2023
2023
2023
2023
2022
Per share data:
Earnings per common share – basic
$
1.58
1.20
1.69
2.55
1.76
1.77
Earnings per common share - basic,
excluding non-GAAP adjustments
$
1.54
1.70
1.79
1.80
1.76
1.77
Earnings per common share – diluted
$
1.57
1.19
1.69
2.54
1.76
1.76
Earnings per common share - diluted,
excluding non-GAAP adjustments
$
1.53
1.68
1.79
1.79
1.76
1.76
Common dividends per share
$
0.22
0.22
0.22
0.22
0.22
0.22
Book value per common share at quarter end
(7)
$
76.23
75.80
73.23
73.32
71.24
69.35
Tangible book value per common share at
quarter end (7)
$
51.98
51.38
48.78
48.85
46.75
44.74
Revenue per diluted common share
$
5.60
5.16
5.35
6.43
5.28
5.27
Revenue per diluted common share,
excluding non-GAAP adjustments
$
5.45
5.25
5.48
5.43
5.28
5.27
Investor information:
Closing sales price of common stock on
last trading day of quarter
$
85.88
87.22
67.04
56.65
55.16
73.40
High closing sales price of common stock
during quarter
$
91.82
89.34
75.95
57.93
82.79
87.81
Low closing sales price of common stock
during quarter
$
79.26
60.77
56.41
46.17
52.51
70.74
Closing sales price of depositary shares
on last trading day of quarter
$
23.62
22.60
22.70
23.75
24.15
25.35
High closing sales price of depositary
shares during quarter
$
24.44
23.65
23.85
24.90
25.71
25.60
Low closing sales price of depositary
shares during quarter
$
22.71
21.00
21.54
19.95
20.77
23.11
Other information:
Residential mortgage loan sales:
Gross loans sold
$
148,576
142,556
198,247
192,948
120,146
134,514
Gross fees (8)
$
3,540
3,191
4,350
4,133
2,795
3,149
Gross fees as a percentage of loans
originated
2.38
%
2.24
%
2.19
%
2.14
%
2.33
%
2.34
%
Net gain (loss) on residential mortgage
loans sold
$
2,879
879
2,012
1,567
2,053
(65
)
Investment gains (losses) on sales of
securities, net (13)
$
—
14
(9,727
)
(9,961
)
—
—
Brokerage account assets, at quarter end
(9)
$
10,756,108
9,810,457
9,041,716
9,007,230
8,634,339
8,049,125
Trust account managed assets, at quarter
end
$
6,297,887
5,530,495
5,047,128
5,084,592
4,855,951
4,560,752
Core deposits (10)
$
34,638,610
33,738,917
33,606,783
32,780,767
32,054,111
31,301,077
Core deposits to total funding (10)
82.2
%
81.7
%
81.9
%
80.9
%
82.4
%
86.8
%
Risk-weighted assets
$
40,531,311
40,205,295
39,527,086
38,853,588
38,117,659
36,216,901
Number of offices
128
128
128
127
126
123
Total core deposits per office
$
270,614
263,585
262,553
258,116
254,398
254,480
Total assets per full-time equivalent
employee
$
14,438
14,287
14,274
14,166
13,750
12,948
Annualized revenues per full-time
equivalent employee
$
508.5
468.4
486.2
593.0
496.5
491.8
Annualized expenses per full-time
equivalent employee
$
287.8
296.8
254.1
256.5
261.7
247.3
Number of employees (full-time
equivalent)
3,386.5
3,357.0
3,329.5
3,309.0
3,281.5
3,241.5
Associate retention rate (11)
94.2
%
94.2
%
93.6
%
94.1
%
93.8
%
93.8
%
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED
QUARTERLY FINANCIAL DATA – UNAUDITED
Three months ended
(dollars in thousands, except per share
data)
March
December
March
2024
2023
2023
Net interest income
$
318,034
317,252
312,231
Noninterest income
110,103
79,088
89,529
Total revenues
428,137
396,340
401,760
Less: Investment losses (gains) on sales
of securities, net
—
(14
)
—
Loss on BOLI restructuring
—
7,166
—
Recognition of mortgage servicing
asset
(11,812
)
—
—
Total revenues excluding the impact of
adjustments noted above
$
416,325
403,492
401,760
Noninterest expense
$
242,365
251,168
211,727
Less: ORE expense (benefit)
84
125
99
FDIC special assessment
7,250
29,000
—
Noninterest expense excluding the impact
of adjustments noted above
$
235,031
222,043
211,628
Pre-tax income
$
151,275
128,858
171,266
Provision for credit losses
34,497
16,314
18,767
Pre-tax pre-provision net revenue
185,772
145,172
190,033
Less: Adjustments noted above
(4,478
)
36,277
99
Adjusted pre-tax pre-provision net revenue
(12)
$
181,294
181,449
190,132
Noninterest income
$
110,103
79,088
89,529
Less: Adjustments noted above
(11,812
)
7,152
—
Noninterest income excluding the impact of
adjustments noted above
$
98,291
86,240
89,529
Efficiency ratio (4)
56.61
%
63.37
%
52.70
%
Adjustments noted above
(0.16
)%
(8.34
)%
(0.02
)%
Efficiency ratio excluding adjustments
noted above (4)
56.45
%
55.03
%
52.68
%
Total average assets
$
48,311,260
47,668,519
42,983,854
Noninterest income to average assets
(1)
0.92
%
0.66
%
0.84
%
Less: Adjustments noted above
(0.10
)%
0.06
%
—
%
Noninterest income (excluding adjustments
noted above) to average assets (1)
0.82
%
0.72
%
0.84
%
Noninterest expense to average assets
(1)
2.02
%
2.09
%
2.00
%
Adjustments as noted above
(0.06
)%
(0.24
)%
—
%
Noninterest expense (excluding adjustments
noted above) to average assets (1)
1.96
%
1.85
%
2.00
%
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED
QUARTERLY FINANCIAL DATA – UNAUDITED
Three months ended
(dollars in thousands, except per share
data)
March
December
September
June
March
December
2024
2023
2023
2023
2023
2022
Net income available to common
shareholders
$
120,146
91,181
128,805
193,501
133,473
134,049
Investment (gains) losses on sales of
securities, net
—
(14
)
9,727
9,961
—
—
Gain on sale of fixed assets as a result
of sale-leaseback transaction
—
—
—
(85,692
)
—
—
Loss on BOLI restructuring
—
16,252
—
—
—
—
FDIC special assessment
7,250
29,000
—
—
—
—
ORE expense (benefit)
84
125
33
58
99
179
Recognition of mortgage servicing
asset
(11,812
)
—
—
—
—
—
Tax effect on above noted adjustments
(16)
1,120
(7,278
)
(2,440
)
18,918
(25
)
(47
)
Net income available to common
shareholders excluding adjustments noted above
$
116,788
129,266
136,125
136,746
133,547
134,181
Basic earnings per common share
$
1.58
1.20
1.69
2.55
1.76
1.77
Less:
Investment (gains) losses on sales of
securities, net
—
—
0.13
0.13
—
—
Gain on sale of fixed assets as a result
of sale-leaseback transaction
—
—
—
(1.13
)
—
—
Loss on BOLI restructuring
—
0.21
—
—
—
—
FDIC special assessment
0.10
0.38
—
—
—
—
ORE expense (benefit)
—
—
—
—
—
—
Recognition of mortgage servicing
asset
(0.15
)
—
—
—
—
—
Tax effect on above noted adjustments
(16)
0.01
(0.10
)
(0.03
)
0.25
—
—
Basic earnings per common share excluding
adjustments noted above
$
1.54
1.70
1.79
1.80
1.76
1.77
Diluted earnings per common share
$
1.57
1.19
1.69
2.54
1.76
1.76
Less:
Investment (gains) losses on sales of
securities, net
—
—
0.13
0.13
—
—
Gain on sale of fixed assets as a result
of sale-leaseback transaction
—
—
—
(1.13
)
—
—
Loss on BOLI restructuring
—
0.21
—
—
—
—
FDIC special assessment
0.10
0.38
—
—
—
—
ORE expense (benefit)
—
—
—
—
—
—
Recognition of mortgage servicing
asset
(0.15
)
—
—
—
—
—
Tax effect on above noted adjustments
(16)
0.01
(0.09
)
(0.03
)
0.25
—
—
Diluted earnings per common share
excluding the adjustments noted above
$
1.53
1.68
1.79
1.80
1.76
1.76
Revenue per diluted common share
$
5.60
5.16
5.35
6.43
5.28
5.27
Adjustments due to revenue-impacting items
as noted above
(0.15
)
0.09
0.13
(1.00
)
—
—
Revenue per diluted common share excluding
adjustments due to revenue-impacting items as noted above
$
5.45
5.25
5.48
5.43
5.28
5.27
Book value per common share at quarter end
(7)
$
76.23
75.80
73.23
73.32
71.24
69.35
Adjustment due to goodwill, core deposit
and other intangible assets
(24.25
)
(24.42
)
(24.45
)
(24.47
)
(24.49
)
(24.61
)
Tangible book value per common share at
quarter end (7)
$
51.98
51.38
48.78
48.85
46.75
44.74
Equity method investment (15)
Fee income from BHG, net of
amortization
$
16,035
14,432
24,967
26,924
19,079
21,005
Funding cost to support investment
5,974
5,803
6,546
6,005
5,768
5,438
Pre-tax impact of BHG
10,061
8,629
18,421
20,919
13,311
15,567
Income tax expense at statutory rates
(16)
2,515
2,157
4,605
5,230
3,328
4,069
Earnings attributable to BHG
$
7,546
6,472
13,816
15,689
9,983
11,498
Basic earnings per common share
attributable to BHG
$
0.10
0.09
0.18
0.21
0.13
0.15
Diluted earnings per common share
attributable to BHG
$
0.10
0.08
0.18
0.21
0.13
0.15
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED
QUARTERLY FINANCIAL DATA – UNAUDITED
Three months ended
(dollars in thousands, except per share
data)
March
December
March
2024
2023
2023
Return on average assets (1)
1.00
%
0.76
%
1.26
%
Adjustments as noted above
(0.03
)%
0.32
%
—
%
Return on average assets excluding
adjustments noted above (1)
0.97
%
1.08
%
1.26
%
Tangible assets:
Total assets
$
48,894,196
47,959,883
45,119,587
Less: Goodwill
(1,846,973
)
(1,846,973
)
(1,846,973
)
Core deposit and other intangible
assets
(25,881
)
(27,465
)
(32,761
)
Net tangible assets
$
47,021,342
46,085,445
43,239,853
Tangible common equity:
Total shareholders' equity
$
6,103,851
6,035,788
5,684,128
Less: Preferred shareholders' equity
(217,126
)
(217,126
)
(217,126
)
Total common shareholders' equity
5,886,725
5,818,662
5,467,002
Less: Goodwill
(1,846,973
)
(1,846,973
)
(1,846,973
)
Core deposit and other intangible
assets
(25,881
)
(27,465
)
(32,761
)
Net tangible common equity
$
4,013,871
3,944,224
3,587,268
Ratio of tangible common equity to
tangible assets
8.54
%
8.56
%
8.30
%
Average tangible assets:
Average assets
$
48,311,260
47,668,519
42,983,854
Less: Average goodwill
(1,846,973
)
(1,846,973
)
(1,846,973
)
Average core deposit and other intangible
assets
(26,898
)
(28,573
)
(33,917
)
Net average tangible assets
$
46,437,389
45,792,973
41,102,964
Return on average assets (1)
1.00
%
0.76
%
1.26
%
Adjustment due to goodwill, core deposit
and other intangible assets
0.04
%
0.03
%
0.06
%
Return on average tangible assets (1)
1.04
%
0.79
%
1.32
%
Adjustments as noted above
(0.03
)%
0.33
%
—
%
Return on average tangible assets
excluding adjustments noted above (1)
1.01
%
1.12
%
1.32
%
Average tangible common equity:
Average shareholders' equity
$
6,082,616
5,889,075
5,605,604
Less: Average preferred equity
(217,126
)
(217,126
)
(217,126
)
Average common equity
5,865,490
5,671,949
5,388,478
Less: Average goodwill
(1,846,973
)
(1,846,973
)
(1,846,973
)
Average core deposit and other intangible
assets
(26,898
)
(28,573
)
(33,917
)
Net average tangible common equity
$
3,991,619
3,796,403
3,507,588
Return on average equity (1)
7.94
%
6.14
%
9.66
%
Adjustment due to average preferred
shareholders' equity
0.30
%
0.24
%
0.39
%
Return on average common equity (1)
8.24
%
6.38
%
10.05
%
Adjustment due to goodwill, core deposit
and other intangible assets
3.87
%
3.15
%
5.38
%
Return on average tangible common equity
(1)
12.11
%
9.53
%
15.43
%
Adjustments as noted above
(0.34
)%
3.98
%
0.01
%
Return on average tangible common equity
excluding adjustments noted above (1)
11.77
%
13.51
%
15.44
%
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA –
UNAUDITED
1. Ratios are presented on an annualized
basis.
2. Net interest margin is the result of
net interest income on a tax equivalent basis divided by average
interest earning assets.
3. Total revenue is equal to the sum of
net interest income and noninterest income.
4. Efficiency ratios are calculated by
dividing noninterest expense by the sum of net interest income and
noninterest income.
5. Annualized net loan charge-offs to
average loans ratios are computed by annualizing quarter-to-date
net loan charge-offs and dividing the result by average loans for
the quarter-to-date period.
6. Capital ratios are calculated using
regulatory reporting regulations enacted for such period and are
defined as follows:
Equity to total assets – End of period
total shareholders' equity as a percentage of end of period
assets.
Tangible common equity to tangible assets
- End of period total shareholders' equity less end of period
preferred stock, goodwill, core deposit and other intangibles as a
percentage of end of period assets less end of period goodwill,
core deposit and other intangibles.
Leverage – Tier I capital (pursuant to
risk-based capital guidelines) as a percentage of adjusted average
assets.
Tier I risk-based – Tier I capital
(pursuant to risk-based capital guidelines) as a percentage of
total risk-weighted assets.
Total risk-based – Total capital (pursuant
to risk-based capital guidelines) as a percentage of total
risk-weighted assets.
Classified asset - Classified assets as a
percentage of Tier 1 capital plus allowance for credit losses.
Tier I common equity to risk weighted
assets - Tier 1 capital (pursuant to risk-based capital guidelines)
less the amount of any preferred stock or subordinated indebtedness
that is considered as a component of Tier 1 capital as a percentage
of total risk-weighted assets.
7. Book value per common share computed by
dividing total common shareholders' equity by common shares
outstanding. Tangible book value per common share computed by
dividing total common shareholders' equity, less goodwill, core
deposit and other intangibles by common shares outstanding.
8. Amounts are included in the statement
of income in "Gains on mortgage loans sold, net", net of
commissions paid on such amounts.
9. At fair value, based on information
obtained from Pinnacle's third party broker/dealer for non-FDIC
insured financial products and services.
10. Core deposits include all transaction
deposit accounts, money market and savings accounts and all
certificates of deposit issued in a denomination of less than
$250,000. The ratio noted above represents total core deposits
divided by total funding, which includes total deposits, FHLB
advances, securities sold under agreements to repurchase,
subordinated indebtedness and all other interest-bearing
liabilities.
11. Associate retention rate is computed
by dividing the number of associates employed at quarter end less
the number of associates that have resigned in the last 12 months
by the number of associates employed at quarter end.
12. Adjusted pre-tax, pre-provision net
revenue excludes the impact of ORE expenses and income, investment
gains and losses on sales of securities, the impact of BOLI
restructuring, the impact of the FDIC special assessment and the
recognition of the mortgage servicing asset.
13. Represents investment gains (losses)
on sales and impairments, net occurring as a result of gains or
losses incurred as the result of a change in management's intention
to sell a bond prior to the recovery of its amortized cost
basis.
14. The dividend payout ratio is
calculated as the sum of the annualized dividend rate for dividends
paid on common shares divided by the trailing 12-months fully
diluted earnings per common share as of the dividend declaration
date.
15. Earnings from equity method investment
includes the impact of the funding costs of the overall franchise
calculated using the firm's subordinated and other borrowing rates.
Income tax expense is calculated using statutory tax rates.
16. Tax effect calculated using the
blended statutory rate of 25.00 percent for all periods in 2024 and
2023. For periods prior to 2023, tax effect calculated using the
blended statutory rate of 26.14 percent.
17. Calculated using the same guidelines
as are used in the Federal Financial Institutions Examination
Council's Uniform Bank Performance Report.
pnfp-earnings
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240422464324/en/
MEDIA CONTACT: Joe Bass, 615-743-8219 FINANCIAL
CONTACT: Harold Carpenter, 615-744-3742 WEBSITE:
www.pnfp.com
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