PNFP Reports 3Q24 Diluted EPS of $1.86 and Net Interest Margin of 3.22 Percent

Barchart · 10/15 16:00

Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.86 for the quarter ended Sept. 30, 2024, compared to net income per diluted common share of $1.69 for the quarter ended Sept. 30, 2023, an increase of approximately 10.1 percent. Net income per diluted common share was $4.08 for the nine months ended Sept. 30, 2024, compared to $5.99 for the nine months ended Sept. 30, 2023, a decrease of approximately 31.9 percent.

After considering the adjustments noted in the table below, net income per diluted common share was $1.86 for the three months ended Sept. 30, 2024, compared to $1.79 for the three months ended Sept. 30, 2023, and $1.63 for the three months ended June 30, 2024, an annualized linked-quarter growth rate of 56.4 percent. Net income per diluted common share adjusted for the items noted in the table below was $5.02 for the nine months ended Sept. 30, 2024, compared to $5.34 for the nine months ended Sept. 30, 2023.

 

 

Three months ended

 

Nine months ended

 

 

Sept. 30,

2024

 

June 30,

2024

 

Sept. 30,

2023

 

Sept. 30,

2024

 

Sept. 30,

2023

Diluted earnings per common share

 

$

1.86

 

$

0.64

 

$

1.69

 

$

4.08

 

 

$

5.99

 

Adjustments, net of tax (1):

 

 

 

 

 

 

 

 

 

 

Investment losses on sales of securities, net

 

 

 

 

0.71

 

 

0.10

 

 

0.71

 

 

 

0.19

 

Gain on sale of fixed assets as a result of sale-leaseback transaction

 

 

 

 

 

 

 

 

 

 

 

(0.84

)

Recognition of mortgage servicing asset

 

 

 

 

 

 

 

 

(0.12

)

 

 

 

FDIC special assessment

 

 

 

 

 

 

 

0.07

 

 

 

 

Fees related to terminating agreement to resell securities previously purchased and professional fees associated with capital optimization initiatives

 

 

 

 

0.28

 

 

 

 

0.28

 

 

 

 

Diluted earnings per common share after adjustments

 

$

1.86

 

$

1.63

 

$

1.79

 

$

5.02

 

 

$

5.34

 

(1): Adjustments include tax effect calculated using a marginal tax rate of 25.00 percent for all periods presented.

"The third quarter was another outstanding quarter for our firm, highlighted by double-digit linked-quarter annualized growth in earning assets, nearly double-digit linked-quarter annualized core deposit growth, and an expanding net interest margin,” said M. Terry Turner, Pinnacle's President and Chief Executive Officer. "Not only am I excited that we grew diluted earnings per share to $1.86 in the quarter, but this growth has also been largely built on our longstanding ability to leverage our differentiated service levels to take market share in our advantaged Southeastern markets. The recently released 2024 FDIC deposit rankings again show that our firm continues to gain market share across our footprint and our client satisfaction scores continue to outperform our larger competitors in virtually every category according to Coalition Greenwich. Lastly, and importantly, Forbes recently reported that our firm was ranked the third best place to work among financial services and insurance firms in the United States, which is ultimately the foundation of all our success.

"Our robust hiring continues, as we have added 126 new revenue producers thus far this year. Our hiring pipelines remain very active heading into the last quarter of 2024, and we fully expect 2025 to yield double-digit growth as well. I also believe we are well positioned to capitalize on what appears to be a declining interest rate environment. Should the yield curve find its way to a more favorable slope in the coming quarters, this could result in an even better 2025 revenue outlook for our firm."

BALANCE SHEET GROWTH AND LIQUIDITY:

Total assets at Sept. 30, 2024, were $50.7 billion, an increase of approximately $1.3 billion from June 30, 2024, and $3.2 billion from Sept. 30, 2023, reflecting a linked-quarter annualized increase of 10.8 percent and a year-over-year increase of 6.7 percent. A further analysis of select balance sheet trends follows:

 

 

Balances at

 

Linked

Quarter

Annualized

% Change

 

Balances at

 

Year-over-Year

% Change

(dollars in thousands)

 

Sept. 30,

2024

 

June 30,

2024

   

Sept. 30,

2023

 

Loans

 

$

34,308,310

 

$

33,769,150

 

6.4

%

 

$

31,943,284

 

7.4

%

Securities

 

 

8,293,241

 

 

7,882,891

 

20.8

%

 

 

6,882,276

 

20.5

%

Other interest-earning assets

 

 

2,810,283

 

 

2,433,910

 

61.9

%

 

 

3,512,452

 

(20.0

)%

Total interest-earning assets

 

$

45,411,834

 

$

44,085,951

 

12.0

%

 

$

42,338,012

 

7.3

%

 

 

 

 

 

 

 

 

 

 

 

Core deposits:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

8,229,394

 

$

7,932,882

 

15.0

%

 

$

8,324,325

 

(1.1

)%

Interest-bearing core deposits(1)

 

 

27,535,246

 

 

27,024,945

 

7.6

%

 

 

25,282,458

 

8.9

%

Noncore deposits and other funding(2)

 

 

7,972,199

 

 

7,569,703

 

21.3

%

 

 

7,420,341

 

7.4

%

Total funding

 

$

43,736,839

 

$

42,527,530

 

11.4

%

 

$

41,027,124

 

6.6

%

(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.

"Loan growth was approximately $539.2 million in the third quarter," Turner said. "We continue to be optimistic that we will see increases in the pace of loan growth as we close out 2024 and enter 2025. Importantly, our C&I and owner-occupied commercial real estate loan portfolios grew by $705.6 million, while our non-owner occupied commercial real estate portfolio decreased by $186.9 million. We are pleased to report that our exposure to construction and land development loans in relation to our total risk-based capital decreased to 68.2 percent, which is now below our target of 70 percent. It is our intent to continue reducing our exposure to non-owner occupied commercial real estate, multifamily and construction and land development loans from its level at Sept. 30, 2024 of 243.3 percent of total risk-based capital to below 225 percent. We believe this target will also be achieved within the next few quarters. As a result, we are beginning to consider new projects with our high-quality developers in our markets. During this time of reducing our exposure to non-owner occupied CRE, our credit experience in these segments has been remarkable and a great tribute to our client selection and credit underwriting process.

"A real highlight for 2024 has been our focus on growing core deposits. Our core deposits are up more than $2.0 billion so far this year, and our pipelines point toward expected continued growth in the fourth quarter. Additionally, we have seen our noninterest bearing deposits grow, with end-of-period growth at Sept. 30, 2024 up $296.5 million over the previous quarter end, a linked-quarter annualized growth rate of 15.0 percent. Over the last two years, we have invested in 16 new office locations, representing a 13.3 percent increase in outlets. So, we expect this significant investment in new people and facilities should enable us to continue to grow our core funding."

PRE-TAX, PRE-PROVISION NET REVENUE (PPNR) GROWTH:

Pre-tax, pre-provision net revenues (PPNR) for the three and nine months ended Sept. 30, 2024, were $207.4 million and $488.4 million, respectively, an increase of 6.5 percent and a decrease of 26.3 percent, respectively, from the $194.8 million and $662.4 million recognized in the three and nine months ended Sept. 30, 2023, respectively.

 

 

Three months ended

 

Nine months ended

 

 

Sept. 30,

 

Sept. 30,

(dollars in thousands)

 

2024

 

2023

 

% change

 

2024

 

2023

 

% change

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

351,504

 

$

317,242

 

10.8

%

 

$

1,001,800

 

 

$

944,866

 

 

6.0

%

Noninterest income

 

 

115,242

 

 

90,797

 

26.9

%

 

 

259,633

 

 

 

354,165

 

 

(26.7

)%

Total revenues

 

 

466,746

 

 

408,039

 

14.4

%

 

 

1,261,433

 

 

 

1,299,031

 

 

(2.9

)%

Noninterest expense

 

 

259,319

 

 

213,233

 

21.6

%

 

 

773,073

 

 

 

636,601

 

 

21.4

%

Pre-tax, pre-provision net revenue (PPNR)

 

 

207,427

 

 

194,806

 

6.5

%

 

 

488,360

 

 

 

662,430

 

 

(26.3

)%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Investment losses on sales of securities, net

 

 

 

 

9,727

 

100.0

%

 

 

72,103

 

 

 

19,688

 

 

>100%

Gain on the sale of fixed assets as a result of sale leaseback

 

 

 

 

 

NA

 

 

 

 

 

(85,692

)

 

(100.0

)%

Recognition of mortgage servicing asset

 

 

 

 

 

NA

 

 

(11,812

)

 

 

 

 

100.0

%

ORE expense

 

 

56

 

 

33

 

69.7

%

 

 

162

 

 

 

190

 

 

(14.7

)%

FDIC special assessment

 

 

 

 

 

NA

 

 

7,250

 

 

 

 

 

100.0

%

Fees related to terminating agreement to resell securities previously purchased and professional fees associated with capital optimization initiatives

 

 

 

 

 

NA

 

 

28,400

 

 

 

 

 

100.0

%

Adjusted PPNR

 

$

207,483

 

$

204,566

 

1.4

%

 

$

584,463

 

 

$

596,616

 

 

(2.0

)%

 

 

Three months ended

 

Nine months ended

 

 

Sept. 30, 2024

 

June 30, 2024

 

Sept. 30, 2023

 

Sept. 30, 2024

 

Sept. 30, 2023

Net interest margin

 

3.22

%

 

3.14

%

 

3.06

%

 

3.14

%

 

3.22

%

Efficiency ratio

 

55.56

%

 

74.04

%

 

52.26

%

 

61.29

%

 

49.01

%

Return on average assets

 

1.15

%

 

0.41

%

 

1.08

%

 

0.85

%

 

1.35

%

Return on average tangible common equity (TCE)

 

13.61

%

 

4.90

%

 

13.43

%

 

10.24

%

 

16.62

%

Average loan to deposit ratio

 

84.99

%

 

84.95

%

 

82.80

%

 

84.89

%

 

83.88

%

Net interest income for the third quarter of 2024 was $351.5 million, compared to $332.3 million for the second quarter of 2024 and $317.2 million for the third quarter of 2023, a year-over-year growth rate of 10.8 percent. Net interest margin was 3.22 percent for the third quarter of 2024, compared to 3.14 percent for the second quarter of 2024 and 3.06 percent for the third quarter of 2023.

Noninterest income for the third quarter of 2024 was $115.2 million, compared to $34.3 million for the second quarter of 2024 and $90.8 million for the third quarter of 2023.

 

 

Three months ended

 

Linked-quarter

Annualized %

Change

 

Three months ended

 

Yr-over-Yr

% Change

(dollars in thousands)

 

Sept. 30, 2024

 

June 30, 2024

   

Sept. 30, 2023

 

Noninterest income

 

$

115,242

 

$

34,288

 

>100

%

 

$

90,797

 

26.9

%

Less:

 

 

 

 

 

 

 

 

 

 

Investment losses on sales of securities, net

 

 

 

 

72,103

 

(100.0

)%

 

 

9,727

 

(100.0

)%

Adjusted noninterest income

 

$

115,242

 

$

106,391

 

33.3

%

 

$

100,524

 

14.6

%

  • Wealth management revenues, which include investment, trust and insurance services, were $29.5 million for the third quarter of 2024, compared to $27.8 million for the second quarter of 2024 and $22.8 million for the third quarter of 2023, a year-over-year increase of 29.7 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 the areas of the firm's most recent strategic market expansions.
  • Income from the firm's investment in Banker's Healthcare Group (BHG) was $16.4 million for the third quarter of 2024, compared to $18.7 million for the second quarter of 2024 and $25.0 million for the third quarter of 2023, a year-over-year decline of 34.4 percent.
    • BHG's loan originations were $989 million in the third quarter of 2024, compared to $871 million in the second quarter of 2024 and $1.0 billion in the third quarter of 2023.
    • Loans sold to BHG's community bank partners were approximately $521 million in the third quarter of 2024, compared to approximately $467 million in the second quarter of 2024 and $435 million in the third quarter of 2023.
    • BHG reserves for on-balance sheet loan losses were $237 million, or 9.1 percent of loans held for investment at Sept. 30, 2024, compared to 9.9 percent at June 30, 2024 and 6.4 percent at Sept. 30, 2023.
    • BHG increased its accrual for estimated losses attributable to loan substitutions and prepayments to $454 million, or 6.2 percent of the unpaid balances on loans that were previously purchased by BHG's community bank network, at Sept. 30, 2024, compared to $415 million, or 5.9 percent, at June 30, 2024 and $350.3 million, or 5.5 percent, at Sept. 30, 2023.
  • Other noninterest income was $48.6 million for the quarter ended Sept. 30, 2024, an increase of $6.8 million from the second quarter of 2024 and $10.6 million from the third quarter of 2023. Third quarter 2024 other noninterest income was positively impacted by increased bank-owned life insurance revenues attributable to restructuring activities initiated last year, increased customer swap revenues and fair value adjustments related to the firm’s interest in other equity investments.

Noninterest expense for the third quarter of 2024 was $259.3 million, compared to $271.4 million for the second quarter of 2024 and $213.2 million for the third quarter of 2023.

 

 

Three months ended

 

Linked-quarter

Annualized %

Change

 

Three months ended

 

Yr-over-Yr

% Change

(dollars in thousands)

 

Sept. 30, 2024

 

June 30, 2024

   

Sept. 30, 2023

 

Noninterest expense

 

$

259,319

 

$

271,389

 

(17.8

)%

 

$

213,233

 

21.6

%

Less:

 

 

 

 

 

 

 

 

 

 

ORE expense

 

 

56

 

 

22

 

>100

%

 

 

33

 

69.7

%

Fees related to terminating agreement to resell securities previously purchased and professional fees associated with capital optimization initiatives

 

 

 

 

28,400

 

(100.0

)%

 

 

 

NA

Adjusted noninterest expense

 

$

259,263

 

$

242,967

 

26.8

%

 

$

213,200

 

21.6

%

  • Salaries and employee benefits were $160.2 million in the third quarter of 2024, compared to $150.1 million in the second quarter of 2024 and $130.3 million in the third quarter of 2023, reflecting a year-over-year increase of 22.9 percent.
    • Full-time equivalent associates increased to 3,516.5 at Sept. 30, 2024 from 3,469.0 at June 30, 2024 and 3,329.5 at Sept. 30, 2023, a year-over-year increase of 5.6 percent.
    • Cash and equity incentive costs in the third quarter of 2024 were approximately $5.2 million higher than the second quarter of 2024 due to the firm anticipating an increased payout percentage for its cash incentive plan than was anticipated at June 30, 2024 and $15.0 million higher than the amounts recorded in the third quarter of 2023 due to an increased number of personnel and the anticipated payout percentage for 2024 being higher than what was anticipated for the 2023 award at Sept. 30, 2023.
  • Equipment and occupancy costs were $42.6 million in the third quarter of 2024, compared to $41.0 million in the second quarter of 2024, reflecting an increase of 3.7 percent, and $36.9 million in the third quarter of 2023, reflecting a year-over-year increase of 15.3 percent. Comparing the third quarter of 2024 to the third quarter of 2023, several factors contributed to the increase of equipment and occupancy costs, including new equipment and facilities and rent escalators on various properties.
  • Noninterest expense categories, other than those specifically noted above, were $56.5 million in the third quarter of 2024, compared to $80.2 million in the second quarter of 2024, reflecting a decrease of 29.6 percent, and $46.0 million in the third quarter of 2023, reflecting a year-over-year increase of 22.9 percent. Several factors contributed to the decrease in other noninterest expense in the third quarter of 2024 compared to the second quarter of 2024, including recognition of the $28.4 million fee related to terminating an agreement to resell securities previously purchased and professional fees associated with the firm's capital optimization initiatives completed in the second quarter of 2024 partially offset by increased lending-related expenses associated with the loss protection fee for the credit default swap which was also entered into in the second quarter of 2024.

"We anticipated margin expansion in the third quarter, due primarily to the securities portfolio restructuring initiatives we executed during the second quarter," said Harold R. Carpenter, Pinnacle's Chief Financial Officer. "Also during the third quarter, our relationship managers focused on mitigating the impact of the recent reduction in the Federal funds rate. We are pleased to report that our deposit pricing was well contained throughout the quarter, aided by the stability of our noninterest bearing deposit balances. Furthermore, from Aug. 31, 2024, a few weeks prior to the FOMC meeting, through Oct. 11, 2024, our deposit pricing has decreased by 28 basis points, while our loan yields have dropped by 24 basis points, signaling to us that we are doing quite well in managing our net interest spreads here in the initial stages of this new interest rate environment.

"We are again very excited about our core fee performance during the third quarter. Expanding our fee revenues has been a key initiative for us this year, with many of our business lines experiencing the best performance in the history of our firm, particularly with respect to our wealth management unit. Fee revenues from BHG were less in the third quarter than we anticipated at the end of the second quarter, with BHG’s contribution now representing approximately 8 percent of our third quarter pre-tax, pre-provision revenues.

"Our expense results for the third quarter came in slightly higher than we originally anticipated at the beginning of the quarter, with most of this attributable to personnel costs. Our hiring has been better than anticipated as it continues to be a strong recruiting year for our firm, which should serve to bolster revenues in future periods. Another contributor to increased expense for the third quarter was that we increased our accrual for annual cash incentive plan payouts to approximately 90 percent of target level payouts as of the end of the third quarter."

CAPITAL, SOUNDNESS AND TAXES:

 

 

As of

 

 

 

Sept. 30, 2024

 

Dec. 31, 2023

 

Sept. 30, 2023

 

Shareholders' equity to total assets

 

 

12.5

%

 

 

12.6

%

 

 

12.3

%

 

Tangible common equity to tangible assets

 

 

8.7

%

 

 

8.6

%

 

 

8.2

%

 

Book value per common share

 

$

79.33

 

 

$

75.80

 

 

$

73.23

 

 

Tangible book value per common share

 

$

55.12

 

 

$

51.38

 

 

$

48.78

 

 

Annualized net loan charge-offs to avg. loans (1)

 

 

0.21

%

 

 

0.17

%

 

 

0.23

%

 

Nonperforming assets to total loans, ORE and other nonperforming assets (NPAs)

 

 

0.35

%

 

 

0.27

%

 

 

0.14

%

 

Classified asset ratio (Pinnacle Bank) (2)

 

 

3.92

%

 

 

5.22

%

 

 

4.59

%

 

Construction and land development loans as a percentage of total capital (3)

 

 

68.20

%

 

 

84.20

%

 

 

83.10

%

 

Construction and land development, non-owner occupied commercial real estate and multi-family loans as a percentage of total capital (3)

 

 

243.30

%

 

 

259.00

%

 

 

256.40

%

 

Allowance for credit losses (ACL) to total loans

 

 

1.14

%

 

 

1.08

%

 

 

1.08

%

 

(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.

"Net charge-offs to average loans for the third quarter of 2024 were 0.21 percent, down from 0.27 percent in the prior quarter," Carpenter said. "Net charge-offs in the third quarter included a partial charge-off of a commercial and industrial loan of approximately $9.0 million. The remaining balance on this loan, which was previously classified, was downgraded to nonaccrual during the third quarter, which was the primary reason for the increase in nonaccrual loans and nonperforming assets from the second quarter. In summary, from a credit perspective, thus far this year, we believe our credit performance has remained strong all year long.

"Lastly, our book value per common share increased during the quarter from $77.15 to $79.33, an annualized linked-quarter increase of 11.3 percent. Concurrently, our tangible book value per common share increased from $52.92 to $55.12 during the third quarter, a linked-quarter annualized increase of 16.6 percent. Additionally, the firm's common equity Tier one risk-based capital ratio increased to 10.8 percent at Sept. 30, 2024 from 10.3 percent at Dec. 31, 2023, which we also consider a great accomplishment."

BOARD OF DIRECTORS DECLARES DIVIDENDS

On Oct. 15, 2024, Pinnacle Financial's Board of Directors approved a quarterly cash dividend of $0.22 per common share to be paid on Nov. 29, 2024 to common shareholders of record as of the close of business on Nov. 1, 2024. Additionally, the Board of Directors approved a quarterly cash dividend of approximately $3.8 million, or $16.88 per share (or $0.422 per depositary share), on Pinnacle Financial's 6.75 percent Series B Non-Cumulative Perpetual Preferred Stock payable on Dec. 1, 2024 to shareholders of record at the close of business on Nov. 16, 2024. The amount and timing of any future dividend payments to both preferred and common shareholders will be subject to the approval of Pinnacle's Board of Directors.

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. CDT on Oct. 16, 2024, to discuss third 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 June 30, 2024 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 $50.7 billion in assets as of Sept. 30, 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 persistent elevated interest rates, 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 elevated 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 bank owned life insurance (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, fees related to terminating an agreement to resell securities previously purchased and professional fees associated with capital optimization initiatives in the second 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)

Sept. 30, 2024

Dec. 31, 2023

Sept. 30, 2023

ASSETS

 

 

 

Cash and noninterest-bearing due from banks

$

276,578

 

$

228,620

 

$

279,652

 

Restricted cash

 

193,758

 

 

86,873

 

 

17,356

 

Interest-bearing due from banks

 

2,362,828

 

 

1,914,856

 

 

2,855,094

 

Cash and cash equivalents

 

2,833,164

 

 

2,230,349

 

 

3,152,102

 

Securities purchased with agreement to resell

 

66,480

 

 

558,009

 

 

500,000

 

Securities available-for-sale, at fair value

 

5,390,988

 

 

4,317,530

 

 

3,863,697

 

Securities held-to-maturity (fair value of $2.7 billion, $2.8 billion, and $2.6 billion, net of allowance for credit losses of $1.7 million, $1.7 million, and $1.7 million at Sept. 30, 2024, Dec. 31, 2023, and Sept. 30, 2023, respectively)

 

2,902,253

 

 

3,006,357

 

 

3,018,579

 

Consumer loans held-for-sale

 

178,600

 

 

104,217

 

 

119,489

 

Commercial loans held-for-sale

 

8,617

 

 

9,280

 

 

20,513

 

Loans

 

34,308,310

 

 

32,676,091

 

 

31,943,284

 

Less allowance for credit losses

 

(391,534

)

 

(353,055

)

 

(346,192

)

Loans, net

 

33,916,776

 

 

32,323,036

 

 

31,597,092

 

Premises and equipment, net

 

295,348

 

 

256,877

 

 

252,669

 

Equity method investment

 

424,637

 

 

445,223

 

 

480,996

 

Accrued interest receivable

 

226,178

 

 

217,491

 

 

177,390

 

Goodwill

 

1,846,973

 

 

1,846,973

 

 

1,846,973

 

Core deposits and other intangible assets

 

22,755

 

 

27,465

 

 

29,216

 

Other real estate owned

 

750

 

 

3,937

 

 

2,555

 

Other assets

 

2,588,369

 

 

2,613,139

 

 

2,462,519

 

Total assets

$

50,701,888

 

$

47,959,883

 

$

47,523,790

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Deposits:

 

 

 

Noninterest-bearing

$

8,229,394

 

$

7,906,502

 

$

8,324,325

 

Interest-bearing

 

12,615,993

 

 

11,365,349

 

 

10,852,086

 

Savings and money market accounts

 

15,188,270

 

 

14,427,206

 

 

14,306,359

 

Time

 

4,921,231

 

 

4,840,753

 

 

4,813,039

 

Total deposits

 

40,954,888

 

 

38,539,810

 

 

38,295,809

 

Securities sold under agreements to repurchase

 

209,956

 

 

209,489

 

 

195,999

 

Federal Home Loan Bank advances

 

2,146,395

 

 

2,138,169

 

 

2,110,598

 

Subordinated debt and other borrowings

 

425,600

 

 

424,938

 

 

424,718

 

Accrued interest payable

 

59,285

 

 

66,967

 

 

67,442

 

Other liabilities

 

561,506

 

 

544,722

 

 

591,583

 

Total liabilities

 

44,357,630

 

 

41,924,095

 

 

41,686,149

 

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 Sept. 30, 2024, Dec. 31, 2023, and Sept. 30, 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 76.8 million shares issued and outstanding at Sept. 30, 2024, Dec. 31, 2023, and Sept. 30, 2023, respectively.

 

77,232

 

 

76,767

 

 

76,753

 

Additional paid-in capital

 

3,120,842

 

 

3,109,493

 

 

3,097,702

 

Retained earnings

 

3,045,571

 

 

2,784,927

 

 

2,745,934

 

Accumulated other comprehensive loss, net of taxes

 

(116,513

)

 

(152,525

)

 

(299,874

)

Total shareholders' equity

 

6,344,258

 

 

6,035,788

 

 

5,837,641

 

Total liabilities and shareholders' equity

$

50,701,888

 

$

47,959,883

 

$

47,523,790

 

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

Nine months ended

 

Sept. 30, 2024

June 30, 2024

Sept. 30, 2023

Sept. 30, 2024

Sept. 30, 2023

Interest income:

 

 

 

 

 

Loans, including fees

$

570,489

 

$

551,659

 

$

508,963

 

$

1,663,347

 

$

1,419,761

 

Securities

 

 

 

 

 

Taxable

 

65,776

 

 

51,578

 

 

36,525

 

 

161,824

 

 

97,850

 

Tax-exempt

 

23,860

 

 

24,372

 

 

24,185

 

 

72,832

 

 

72,590

 

Federal funds sold and other

 

34,740

 

 

40,781

 

 

57,621

 

 

115,735

 

 

118,371

 

Total interest income

 

694,865

 

 

668,390

 

 

627,294

 

 

2,013,738

 

 

1,708,572

 

Interest expense:

 

 

 

 

 

Deposits

 

310,527

 

 

304,449

 

 

280,305

 

 

915,944

 

 

685,562

 

Securities sold under agreements to repurchase

 

1,495

 

 

1,316

 

 

1,071

 

 

4,210

 

 

2,449

 

FHLB advances and other borrowings

 

31,339

 

 

30,363

 

 

28,676

 

 

91,784

 

 

75,695

 

Total interest expense

 

343,361

 

 

336,128

 

 

310,052

 

 

1,011,938

 

 

763,706

 

Net interest income

 

351,504

 

 

332,262

 

 

317,242

 

 

1,001,800

 

 

944,866

 

Provision for credit losses

 

26,281

 

 

30,159

 

 

26,826

 

 

90,937

 

 

77,282

 

Net interest income after provision for credit losses

 

325,223

 

 

302,103

 

 

290,416

 

 

910,863

 

 

867,584

 

Noninterest income:

 

 

 

 

 

Service charges on deposit accounts

 

16,217

 

 

14,563

 

 

12,665

 

 

44,219

 

 

36,563

 

Investment services

 

17,868

 

 

15,720

 

 

13,253

 

 

48,339

 

 

39,022

 

Insurance sales commissions

 

3,286

 

 

3,715

 

 

2,882

 

 

10,853

 

 

10,598

 

Gains on mortgage loans sold, net

 

2,643

 

 

3,270

 

 

2,012

 

 

8,792

 

 

5,632

 

Investment losses on sales of securities, net

 

 

 

(72,103

)

 

(9,727

)

 

(72,103

)

 

(19,688

)

Trust fees

 

8,383

 

 

8,323

 

 

6,640

 

 

24,121

 

 

19,696

 

Income from equity method investment

 

16,379

 

 

18,688

 

 

24,967

 

 

51,102

 

 

70,970

 

Gain on sale of fixed assets

 

1,837

 

 

325

 

 

87

 

 

2,220

 

 

85,946

 

Other noninterest income

 

48,629

 

 

41,787

 

 

38,018

 

 

142,090

 

 

105,426

 

Total noninterest income

 

115,242

 

 

34,288

 

 

90,797

 

 

259,633

 

 

354,165

 

Noninterest expense:

 

 

 

 

 

Salaries and employee benefits

 

160,234

 

 

150,117

 

 

130,344

 

 

456,361

 

 

398,495

 

Equipment and occupancy

 

42,564

 

 

41,036

 

 

36,900

 

 

123,246

 

 

100,959

 

Other real estate, net

 

56

 

 

22

 

 

33

 

 

162

 

 

190

 

Marketing and other business development

 

5,599

 

 

6,776

 

 

5,479

 

 

18,500

 

 

17,085

 

Postage and supplies

 

2,965

 

 

3,135

 

 

2,621

 

 

8,871

 

 

8,303

 

Amortization of intangibles

 

1,558

 

 

1,568

 

 

1,765

 

 

4,710

 

 

5,339

 

Other noninterest expense

 

46,343

 

 

68,735

 

 

36,091

 

 

161,223

 

 

106,230

 

Total noninterest expense

 

259,319

 

 

271,389

 

 

213,233

 

 

773,073

 

 

636,601

 

Income before income taxes

 

181,146

 

 

65,002

 

 

167,980

 

 

397,423

 

 

585,148

 

Income tax expense

 

34,455

 

 

11,840

 

 

35,377

 

 

73,626

 

 

117,975

 

Net income

 

146,691

 

 

53,162

 

 

132,603

 

 

323,797

 

 

467,173

 

Preferred stock dividends

 

(3,798

)

 

(3,798

)

 

(3,798

)

 

(11,394

)

 

(11,394

)

Net income available to common shareholders

$

142,893

 

$

49,364

 

$

128,805

 

$

312,403

 

$

455,779

 

Per share information:

 

 

 

 

 

Basic net income per common share

$

1.87

 

$

0.65

 

$

1.69

 

$

4.09

 

$

6.00

 

Diluted net income per common share

$

1.86

 

$

0.64

 

$

1.69

 

$

4.08

 

$

5.99

 

Weighted average common shares outstanding:

 

 

 

 

 

Basic

 

76,520,599

 

 

76,506,121

 

 

76,044,182

 

 

76,435,370

 

 

75,998,965

 

Diluted

 

76,765,586

 

 

76,644,227

 

 

76,201,916

 

 

76,606,329

 

 

76,102,622

 

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

 

 

931

 

 

 

 

 

 

971

 

Preferred dividends paid ($50.64 per share)

 

 

 

 

 

 

 

(11,394

)

 

 

 

(11,394

)

Common dividends paid ($0.66 per share)

 

 

 

 

 

 

 

(51,551

)

 

 

(51,551

)

Issuance of restricted common shares

 

240

 

 

240

 

 

(240

)

 

 

 

 

 

 

Forfeiture of restricted common shares

 

(21

)

 

(21

)

 

21

 

 

 

 

 

 

 

Restricted shares withheld for taxes & related tax benefits

 

(53

)

 

(53

)

 

(3,712

)

 

 

 

 

 

(3,765

)

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

 

 

 

 

 

29,573

 

 

 

 

 

 

29,573

 

Net income

 

 

 

 

 

 

 

467,173

 

 

 

 

467,173

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

(109,113

)

 

(109,113

)

Balance at September 30, 2023

$

217,126

76,753

 

$

76,753

 

$

3,097,702

 

$

2,745,934

 

$

(299,874

)

$

5,837,641

 

 

 

 

 

 

 

 

 

Balance at December 31, 2023

$

217,126

76,767

 

$

76,767

 

$

3,109,493

 

$

2,784,927

 

$

(152,525

)

$

6,035,788

 

Preferred dividends paid ($50.64 per share)

 

 

 

 

 

 

 

(11,394

)

 

 

 

(11,394

)

Common dividends paid ($0.66 per share)

 

 

 

 

 

 

 

(51,759

)

 

 

 

(51,759

)

Issuance of restricted common shares

 

240

 

 

240

 

 

(240

)

 

 

 

 

 

 

Forfeiture of restricted common shares

 

(25

)

 

(25

)

 

25

 

 

 

 

 

 

 

Restricted shares withheld for taxes & related tax benefits

 

(61

)

 

(61

)

 

(5,100

)

 

 

 

 

 

(5,161

)

Issuance of common stock pursuant to RSU and PSU agreements, net of shares withheld for taxes & related tax benefits

 

311

 

 

311

 

 

(14,741

)

 

 

 

 

 

(14,430

)

Compensation expense for restricted shares & performance stock units

 

 

 

 

 

31,405

 

 

 

 

 

 

31,405

 

Net income

 

 

 

 

 

 

 

323,797

 

 

 

 

323,797

 

Other comprehensive gain

 

 

 

 

 

 

 

 

 

36,012

 

 

36,012

 

Balance at September 30, 2024

$

217,126

77,232

 

$

77,232

 

$

3,120,842

 

$

3,045,571

 

$

(116,513

)

$

6,344,258

 

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

 

 

 

 

 

 

(dollars in thousands)

September

 

June

 

March

 

December

 

September

 

June

2024

 

2024

 

2024

 

2023

 

2023

 

2023

Balance sheet data, at quarter end:

 

 

 

 

 

 

Commercial and industrial loans

$

12,986,865

 

12,328,622

 

11,893,198

 

11,666,691

 

11,307,611

 

10,983,911

 

Commercial real estate - owner occupied loans

 

4,264,743

 

4,217,351

 

4,044,973

 

4,044,896

 

3,944,616

 

3,845,359

 

Commercial real estate - investment loans

 

5,919,235

 

5,998,326

 

6,138,711

 

5,929,595

 

5,957,426

 

5,682,652

 

Commercial real estate - multifamily and other loans

 

2,213,153

 

2,185,858

 

1,924,931

 

1,605,899

 

1,490,184

 

1,488,236

 

Consumer real estate - mortgage loans

 

4,907,766

 

4,874,846

 

4,828,416

 

4,851,531

 

4,768,780

 

4,692,673

 

Construction and land development loans

 

3,486,504

 

3,621,563

 

3,818,334

 

4,041,081

 

3,942,143

 

3,904,774

 

Consumer and other loans

 

530,044

 

542,584

 

514,310

 

536,398

 

532,524

 

555,685

 

Total loans

 

34,308,310

 

33,769,150

 

33,162,873

 

32,676,091

 

31,943,284

 

31,153,290

 

Allowance for credit losses

 

(391,534

)

(381,601

)

(371,337

)

(353,055

)

(346,192

)

(337,459

)

Securities

 

8,293,241

 

7,882,891

 

7,371,847

 

7,323,887

 

6,882,276

 

6,623,457

 

Total assets

 

50,701,888

 

49,366,969

 

48,894,196

 

47,959,883

 

47,523,790

 

46,875,982

 

Noninterest-bearing deposits

 

8,229,394

 

7,932,882

 

7,958,739

 

7,906,502

 

8,324,325

 

8,436,799

 

Total deposits

 

40,954,888

 

39,770,380

 

39,402,025

 

38,539,810

 

38,295,809

 

37,722,661

 

Securities sold under agreements to repurchase

 

209,956

 

220,885

 

201,418

 

209,489

 

195,999

 

163,774

 

FHLB advances

 

2,146,395

 

2,110,885

 

2,116,417

 

2,138,169

 

2,110,598

 

2,200,917

 

Subordinated debt and other borrowings

 

425,600

 

425,380

 

425,159

 

424,938

 

424,718

 

424,497

 

Total shareholders' equity

 

6,344,258

 

6,174,668

 

6,103,851

 

6,035,788

 

5,837,641

 

5,843,759

 

Balance sheet data, quarterly averages:

 

 

 

 

 

 

Total loans

$

34,081,759

 

33,516,804

 

33,041,954

 

32,371,506

 

31,529,854

 

30,882,205

 

Securities

 

8,176,250

 

7,322,588

 

7,307,201

 

6,967,488

 

6,801,285

 

6,722,247

 

Federal funds sold and other

 

2,601,267

 

3,268,307

 

3,274,062

 

3,615,908

 

4,292,956

 

3,350,705

 

Total earning assets

 

44,859,276

 

44,107,699

 

43,623,217

 

42,954,902

 

42,624,095

 

40,955,157

 

Total assets

 

49,535,543

 

48,754,091

 

48,311,260

 

47,668,519

 

47,266,199

 

45,411,961

 

Noninterest-bearing deposits

 

8,077,655

 

8,000,159

 

7,962,217

 

8,342,572

 

8,515,733

 

8,599,781

 

Total deposits

 

40,101,199

 

39,453,828

 

38,995,709

 

38,515,560

 

38,078,665

 

36,355,859

 

Securities sold under agreements to repurchase

 

230,340

 

213,252

 

210,888

 

202,601

 

184,681

 

162,429

 

FHLB advances

 

2,128,793

 

2,106,786

 

2,214,489

 

2,112,809

 

2,132,638

 

2,352,045

 

Subordinated debt and other borrowings

 

427,380

 

427,256

 

428,281

 

426,999

 

426,855

 

426,712

 

Total shareholders' equity

 

6,265,710

 

6,138,722

 

6,082,616

 

5,889,075

 

5,898,196

 

5,782,239

 

Statement of operations data, for the three months ended:

Interest income

$

694,865

 

668,390

 

650,483

 

644,796

 

627,294

 

575,239

 

Interest expense

 

343,361

 

336,128

 

332,449

 

327,544

 

310,052

 

259,846

 

Net interest income

 

351,504

 

332,262

 

318,034

 

317,252

 

317,242

 

315,393

 

Provision for credit losses

 

26,281

 

30,159

 

34,497

 

16,314

 

26,826

 

31,689

 

Net interest income after provision for credit losses

 

325,223

 

302,103

 

283,537

 

300,938

 

290,416

 

283,704

 

Noninterest income

 

115,242

 

34,288

 

110,103

 

79,088

 

90,797

 

173,839

 

Noninterest expense

 

259,319

 

271,389

 

242,365

 

251,168

 

213,233

 

211,641

 

Income before income taxes

 

181,146

 

65,002

 

151,275

 

128,858

 

167,980

 

245,902

 

Income tax expense

 

34,455

 

11,840

 

27,331

 

33,879

 

35,377

 

48,603

 

Net income

 

146,691

 

53,162

 

123,944

 

94,979

 

132,603

 

197,299

 

Preferred stock dividends

 

(3,798

)

(3,798

)

(3,798

)

(3,798

)

(3,798

)

(3,798

)

Net income available to common shareholders

$

142,893

 

49,364

 

120,146

 

91,181

 

128,805

 

193,501

 

Profitability and other ratios:

 

 

 

 

 

 

Return on avg. assets (1)

 

1.15

%

0.41

%

1.00

%

0.76

%

1.08

%

1.71

%

Return on avg. equity (1)

 

9.07

%

3.23

%

7.94

%

6.14

%

8.66

%

13.42

%

Return on avg. common equity (1)

 

9.40

%

3.35

%

8.24

%

6.38

%

9.00

%

13.95

%

Return on avg. tangible common equity (1)

 

13.61

%

4.90

%

12.11

%

9.53

%

13.43

%

21.06

%

Common stock dividend payout ratio (14)

 

16.73

%

17.29

%

12.59

%

12.26

%

11.35

%

11.04

%

Net interest margin (2)

 

3.22

%

3.14

%

3.04

%

3.06

%

3.06

%

3.20

%

Noninterest income to total revenue (3)

 

24.69

%

9.35

%

25.72

%

19.95

%

22.25

%

35.53

%

Noninterest income to avg. assets (1)

 

0.93

%

0.28

%

0.92

%

0.66

%

0.76

%

1.54

%

Noninterest exp. to avg. assets (1)

 

2.08

%

2.24

%

2.02

%

2.09

%

1.79

%

1.87

%

Efficiency ratio (4)

 

55.56

%

74.04

%

56.61

%

63.37

%

52.26

%

43.26

%

Avg. loans to avg. deposits

 

84.99

%

84.95

%

84.73

%

84.05

%

82.80

%

84.94

%

Securities to total assets

 

16.36

%

15.97

%

15.08

%

15.27

%

14.48

%

14.13

%

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

September 30, 2024

September 30, 2023

 

Average

Balances

Interest

Rates/

Yields

Average

Balances

Interest

Rates/

Yields

Interest-earning assets

 

 

 

 

 

 

Loans (1) (2)

$

34,081,759

$

570,489

6.75

%

$

31,529,854

$

508,963

6.50

%

Securities

 

 

 

 

 

 

Taxable

 

4,979,091

 

65,776

5.26

%

 

3,542,383

 

36,525

4.09

%

Tax-exempt (2)

 

3,197,159

 

23,860

3.54

%

 

3,258,902

 

24,185

3.51

%

Interest-bearing due from banks

 

2,294,128

 

29,705

5.15

%

 

3,553,640

 

51,109

5.71

%

Resell agreements

 

50,504

 

1,473

11.60

%

 

503,153

 

3,258

2.57

%

Federal funds sold

 

 

%

 

 

%

Other

 

256,635

 

3,562

5.52

%

 

236,163

 

3,254

5.47

%

Total interest-earning assets

 

44,859,276

$

694,865

6.27

%

 

42,624,095

$

627,294

5.95

%

Nonearning assets

 

 

 

 

 

 

Intangible assets

 

1,870,719

 

 

 

1,877,340

 

 

Other nonearning assets

 

2,805,548

 

 

 

2,764,764

 

 

Total assets

$

49,535,543

 

 

$

47,266,199

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

Interest checking

 

12,372,313

 

120,645

3.88

%

 

10,414,869

 

98,974

3.77

%

Savings and money market

 

14,784,857

 

135,189

3.64

%

 

14,131,277

 

128,453

3.61

%

Time

 

4,866,374

 

54,693

4.47

%

 

5,016,786

 

52,878

4.18

%

Total interest-bearing deposits

 

32,023,544

 

310,527

3.86

%

 

29,562,932

 

280,305

3.76

%

Securities sold under agreements to repurchase

 

230,340

 

1,495

2.58

%

 

184,681

 

1,071

2.30

%

Federal Home Loan Bank advances

 

2,128,793

 

24,929

4.66

%

 

2,132,638

 

22,710

4.22

%

Subordinated debt and other borrowings

 

427,380

 

6,410

5.97

%

 

426,855

 

5,966

5.54

%

Total interest-bearing liabilities

 

34,810,057

 

343,361

3.92

%

 

32,307,106

 

310,052

3.81

%

Noninterest-bearing deposits

 

8,077,655

 

 

 

8,515,733

 

 

Total deposits and interest-bearing liabilities

 

42,887,712

$

343,361

3.19

%

 

40,822,839

$

310,052

3.01

%

Other liabilities

 

382,121

 

 

 

545,164

 

 

Shareholders' equity

 

6,265,710

 

 

 

5,898,196

 

 

Total liabilities and shareholders' equity

$

49,535,543

 

 

$

47,266,199

 

 

Net interest income

 

$

351,504

 

 

$

317,242

 

Net interest spread (3)

 

 

2.34

%

 

 

2.14

%

Net interest margin (4)

 

 

3.22

%

 

 

3.06

%

 

 

 

 

 

 

 

(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 $12.0 million of taxable equivalent income for the three months ended Sept. 30, 2024 and for the three months ended Sept. 30, 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 Sept. 30, 2024 would have been 3.08% compared to a net interest spread of 2.94% for the three months ended Sept. 30, 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

ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED

 

 

 

(dollars in thousands)

Nine months ended

Nine months ended

September 30, 2024

September 30, 2023

 

Average

Balances

Interest

Rates/

Yields

Average

Balances

Interest

Rates/

Yields

Interest-earning assets

 

 

 

 

 

 

Loans (1) (2)

$

33,548,791

$

1,663,347

6.71

%

$

30,688,846

$

1,419,761

6.27

%

Securities

 

 

 

 

 

 

Taxable

 

4,330,537

 

161,824

4.99

%

 

3,482,068

 

97,850

3.76

%

Tax-exempt (2)

 

3,273,572

 

72,832

3.54

%

 

3,280,951

 

72,590

3.53

%

Interest-bearing due from banks

 

2,436,917

 

96,065

5.27

%

 

2,522,300

 

100,275

5.32

%

Resell agreements

 

355,791

 

8,972

3.37

%

 

508,467

 

9,960

2.62

%

Federal funds sold

 

 

%

 

 

%

Other

 

253,540

 

10,698

5.64

%

 

225,402

 

8,136

4.83

%

Total interest-earning assets

 

44,199,148

$

2,013,738

6.19

%

 

40,708,034

$

1,708,572

5.72

%

Nonearning assets

 

 

 

 

 

 

Intangible assets

 

1,872,285

 

 

 

1,879,100

 

 

Other nonearning assets

 

2,797,971

 

 

 

2,649,291

 

 

Total assets

$

48,869,404

 

 

$

45,236,425

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

Interest checking

 

12,020,703

 

352,158

3.91

%

 

9,199,603

 

227,263

3.30

%

Savings and money market

 

14,684,785

 

404,340

3.68

%

 

14,063,699

 

335,997

3.19

%

Time

 

4,799,977

 

159,446

4.44

%

 

4,509,386

 

122,302

3.63

%

Total interest-bearing deposits

 

31,505,465

 

915,944

3.88

%

 

27,772,688

 

685,562

3.30

%

Securities sold under agreements to repurchase

 

218,205

 

4,210

2.58

%

 

188,605

 

2,449

1.74

%

Federal Home Loan Bank advances

 

2,149,945

 

73,443

4.56

%

 

1,875,351

 

58,284

4.16

%

Subordinated debt and other borrowings

 

427,638

 

18,341

5.73

%

 

426,711

 

17,411

5.46

%

Total interest-bearing liabilities

 

34,301,253

 

1,011,938

3.94

%

 

30,263,355

 

763,706

3.37

%

Noninterest-bearing deposits

 

8,013,578

 

 

 

8,812,953

 

 

Total deposits and interest-bearing liabilities

 

42,314,831

$

1,011,938

3.19

%

 

39,076,308

$

763,706

2.61

%

Other liabilities

 

391,847

 

 

 

396,965

 

 

Shareholders' equity

 

6,162,726

 

 

 

5,763,152

 

 

Total liabilities and shareholders' equity

$

48,869,404

 

 

$

45,236,425

 

 

Net interest income

 

$

1,001,800

 

 

$

944,866

 

Net interest spread (3)

 

 

2.25

%

 

 

2.35

%

Net interest margin (4)

 

 

3.14

%

 

 

3.22

%

 

 

 

 

 

 

 

(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 $35.6 million of taxable equivalent income for the nine months ended Sept. 30, 2024 compared to $34.1 million for the nine months ended Sept. 30, 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 nine months ended Sept. 30, 2024 would have been 3.00% compared to a net interest spread of 3.11% for the nine months ended Sept. 30, 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)

September

 

June

 

March

 

December

 

September

 

June

2024

 

2024

 

2024

 

2023

 

2023

 

2023

Asset quality information and ratios:

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

Nonaccrual loans

$

119,293

 

97,649

 

108,325

 

82,288

 

42,950

 

44,289

 

ORE and other nonperforming assets (NPAs)

 

823

 

2,760

 

2,766

 

4,347

 

3,019

 

3,105

 

Total nonperforming assets

$

120,116

 

100,409

 

111,091

 

86,635

 

45,969

 

47,394

 

Past due loans over 90 days and still accruing interest

$

3,611

 

4,057

 

5,273

 

6,004

 

4,969

 

5,257

 

Accruing purchase credit deteriorated loans

$

5,715

 

6,021

 

6,222

 

6,501

 

7,010

 

7,415

 

Net loan charge-offs

$

18,348

 

22,895

 

16,215

 

13,451

 

18,093

 

9,771

 

Allowance for credit losses to nonaccrual loans

 

328.2

%

390.8

%

342.8

%

429.0

%

806.0

%

762.0

%

As a percentage of total loans:

 

 

 

 

 

 

Past due accruing loans over 30 days

 

0.16

%

0.16

%

0.17

%

0.23

%

0.16

%

0.14

%

Potential problem loans

 

0.14

%

0.18

%

0.28

%

0.39

%

0.42

%

0.32

%

Allowance for credit losses

 

1.14

%

1.13

%

1.12

%

1.08

%

1.08

%

1.08

%

Nonperforming assets to total loans, ORE and other NPAs

 

0.35

%

0.30

%

0.33

%

0.27

%

0.14

%

0.15

%

Classified asset ratio (Pinnacle Bank) (6)

 

3.9

%

4.0

%

4.9

%

5.2

%

4.6

%

3.3

%

Annualized net loan charge-offs to avg. loans (5)

 

0.21

%

0.27

%

0.20

%

0.17

%

0.23

%

0.13

%

 

 

 

 

 

 

 

Interest rates and yields:

 

 

 

 

 

 

Loans

 

6.75

%

6.71

%

6.67

%

6.62

%

6.50

%

6.30

%

Securities

 

4.58

%

4.43

%

4.06

%

4.12

%

3.81

%

3.66

%

Total earning assets

 

6.27

%

6.20

%

6.11

%

6.09

%

5.95

%

5.74

%

Total deposits, including non-interest bearing

 

3.08

%

3.10

%

3.10

%

3.07

%

2.92

%

2.52

%

Securities sold under agreements to repurchase

 

2.58

%

2.48

%

2.67

%

2.54

%

2.30

%

1.93

%

FHLB advances

 

4.66

%

4.66

%

4.38

%

4.26

%

4.22

%

4.20

%

Subordinated debt and other borrowings

 

5.97

%

5.62

%

5.60

%

5.59

%

5.54

%

5.44

%

Total deposits and interest-bearing liabilities

 

3.19

%

3.20

%

3.20

%

3.15

%

3.01

%

2.65

%

 

 

 

 

 

 

 

Capital and other ratios (6):

 

 

 

 

 

 

Pinnacle Financial ratios:

 

 

 

 

 

 

Shareholders' equity to total assets

 

12.5

%

12.5

%

12.5

%

12.6

%

12.3

%

12.5

%

Common equity Tier one

 

10.8

%

10.7

%

10.4

%

10.3

%

10.3

%

10.2

%

Tier one risk-based

 

11.4

%

11.2

%

10.9

%

10.8

%

10.9

%

10.8

%

Total risk-based

 

13.2

%

13.2

%

12.9

%

12.7

%

12.8

%

12.7

%

Leverage

 

9.6

%

9.5

%

9.5

%

9.4

%

9.4

%

9.5

%

Tangible common equity to tangible assets

 

8.7

%

8.6

%

8.5

%

8.6

%

8.2

%

8.3

%

Pinnacle Bank ratios:

 

 

 

 

 

 

Common equity Tier one

 

11.7

%

11.5

%

11.3

%

11.1

%

11.2

%

11.1

%

Tier one risk-based

 

11.7

%

11.5

%

11.3

%

11.1

%

11.2

%

11.1

%

Total risk-based

 

12.6

%

12.5

%

12.2

%

12.0

%

12.0

%

11.9

%

Leverage

 

9.8

%

9.7

%

9.7

%

9.7

%

9.7

%

9.8

%

Construction and land development loans as a percentage of total capital (17)

 

68.2

%

72.9

%

77.5

%

84.2

%

83.1

%

84.5

%

Non-owner occupied commercial real estate and multi-family as a percentage of total capital (17)

 

243.3

%

254.0

%

258.0

%

259.0

%

256.4

%

256.7

%

 

 

 

 

 

 

 

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)

 

September

 

June

 

March

 

December

 

September

 

June

 

2024

 

2024

 

2024

 

2023

 

2023

 

2023

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

Earnings per common share – basic

$

1.87

 

0.65

 

1.58

 

1.20

 

1.69

 

2.55

 

Earnings per common share - basic, excluding non-GAAP adjustments

$

1.87

 

1.63

 

1.54

 

1.70

 

1.79

 

1.80

 

Earnings per common share – diluted

$

1.86

 

0.64

 

1.57

 

1.19

 

1.69

 

2.54

 

Earnings per common share - diluted, excluding non-GAAP adjustments

$

1.86

 

1.63

 

1.53

 

1.68

 

1.79

 

1.79

 

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)

$

79.33

 

77.15

 

76.23

 

75.80

 

73.23

 

73.32

 

Tangible book value per common share at quarter end (7)

$

55.12

 

52.92

 

51.98

 

51.38

 

48.78

 

48.85

 

Revenue per diluted common share

$

6.08

 

4.78

 

5.60

 

5.16

 

5.35

 

6.43

 

Revenue per diluted common share, excluding non-GAAP adjustments

$

6.08

 

5.72

 

5.45

 

5.25

 

5.48

 

5.43

 

 

 

 

 

 

 

 

 

Investor information:

 

 

 

 

 

 

 

Closing sales price of common stock on last trading day of quarter

$

97.97

 

80.04

 

85.88

 

87.22

 

67.04

 

56.65

 

High closing sales price of common stock during quarter

$

100.56

 

84.70

 

91.82

 

89.34

 

75.95

 

57.93

 

Low closing sales price of common stock during quarter

$

76.97

 

74.62

 

79.26

 

60.77

 

56.41

 

46.17

 

 

 

 

 

 

 

 

 

Closing sales price of depositary shares on last trading day of quarter

$

24.39

 

23.25

 

23.62

 

22.60

 

22.70

 

23.75

 

High closing sales price of depositary shares during quarter

$

24.50

 

23.85

 

24.44

 

23.65

 

23.85

 

24.90

 

Low closing sales price of depositary shares during quarter

$

23.25

 

22.93

 

22.71

 

21.00

 

21.54

 

19.95

 

 

 

 

 

 

 

 

 

Other information:

 

 

 

 

 

 

 

Residential mortgage loan sales:

 

 

 

 

 

 

 

Gross loans sold

$

209,144

 

217,080

 

148,576

 

142,556

 

198,247

 

192,948

 

Gross fees (8)

$

4,974

 

5,368

 

3,540

 

3,191

 

4,350

 

4,133

 

Gross fees as a percentage of loans originated

 

2.38

%

2.47

%

2.38

%

2.24

%

2.19

%

2.14

%

Net gain on residential mortgage loans sold

$

2,643

 

3,270

 

2,879

 

879

 

2,012

 

1,567

 

Investment gains (losses) on sales of securities, net (13)

$

 

(72,103

)

 

14

 

(9,727

)

(9,961

)

Brokerage account assets, at quarter end (9)

$

12,791,337

 

11,917,578

 

10,756,108

 

9,810,457

 

9,041,716

 

9,007,230

 

Trust account managed assets, at quarter end

$

6,830,323

 

6,443,916

 

6,297,887

 

5,530,495

 

5,047,128

 

5,084,592

 

Core deposits (10)

$

35,764,640

 

34,957,827

 

34,638,610

 

33,738,917

 

33,606,783

 

32,780,767

 

Core deposits to total funding (10)

 

81.8

%

82.2

%

82.2

%

81.7

%

81.9

%

80.9

%

Risk-weighted assets

$

40,530,585

 

39,983,191

 

40,531,311

 

40,205,295

 

39,527,086

 

38,853,588

 

Number of offices

 

136

 

135

 

128

 

128

 

128

 

127

 

Total core deposits per office

$

262,975

 

258,947

 

270,614

 

263,585

 

262,553

 

258,116

 

Total assets per full-time equivalent employee

$

14,418

 

14,231

 

14,438

 

14,287

 

14,274

 

14,166

 

Annualized revenues per full-time equivalent employee

$

528.0

 

425.0

 

508.5

 

468.4

 

486.2

 

593.0

 

Annualized expenses per full-time equivalent employee

$

293.4

 

314.6

 

287.8

 

296.8

 

254.1

 

256.5

 

Number of employees (full-time equivalent)

 

3,516.5

 

3,469.0

 

3,386.5

 

3,357.0

 

3,329.5

 

3,309.0

 

Associate retention rate (11)

 

94.6

%

94.4

%

94.2

%

94.2

%

93.6

%

94.1

%

 

 

 

 

 

 

 

 

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

 

Nine months ended

(dollars in thousands, except per share data)

September

 

June

 

September

 

September

 

September

2024

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

Net interest income

$

351,504

 

332,262

 

317,242

 

 

1,001,800

 

944,866

 

 

 

 

 

 

 

 

Noninterest income

 

115,242

 

34,288

 

90,797

 

 

259,633

 

354,165

 

Total revenues

 

466,746

 

366,550

 

408,039

 

 

1,261,433

 

1,299,031

 

Less: Investment losses (gains) on sales of securities, net

 

 

72,103

 

9,727

 

 

72,103

 

19,688

 

Gain on sale of fixed assets as a result of sale-leaseback transaction

 

 

 

 

 

 

(85,692

)

Recognition of mortgage servicing asset

 

 

 

 

 

(11,812

)

 

Total revenues excluding the impact of adjustments noted above

$

466,746

 

438,653

 

417,766

 

 

1,321,724

 

1,233,027

 

 

 

 

 

 

 

 

Noninterest expense

$

259,319

 

271,389

 

213,233

 

 

773,073

 

636,601

 

Less: ORE expense

 

56

 

22

 

33

 

 

162

 

190

 

FDIC special assessment

 

 

 

 

 

7,250

 

 

Fees related to terminating agreement to resell securities previously purchased and professional fees associated with capital optimization initiatives

 

 

28,400

 

 

 

28,400

 

 

Noninterest expense excluding the impact of adjustments noted above

$

259,263

 

242,967

 

213,200

 

 

737,261

 

636,411

 

 

 

 

 

 

 

 

Pre-tax income

$

181,146

 

65,002

 

167,980

 

 

397,423

 

585,148

 

Provision for credit losses

 

26,281

 

30,159

 

26,826

 

 

90,937

 

77,282

 

Pre-tax pre-provision net revenue

 

207,427

 

95,161

 

194,806

 

 

488,360

 

662,430

 

Less: Adjustments noted above

 

56

 

100,525

 

9,760

 

 

96,103

 

(65,814

)

Adjusted pre-tax pre-provision net revenue (12)

$

207,483

 

195,686

 

204,566

 

 

584,463

 

596,616

 

 

 

 

 

 

 

 

Noninterest income

$

115,242

 

34,288

 

90,797

 

 

259,633

 

354,165

 

Less: Adjustments noted above

 

 

72,103

 

9,727

 

 

60,291

 

(66,004

)

Noninterest income excluding the impact of adjustments noted above

$

115,242

 

106,391

 

100,524

 

 

319,924

 

288,161

 

 

 

 

 

 

 

 

Efficiency ratio (4)

 

55.56

%

74.04

%

52.26

%

 

61.29

%

49.01

%

Adjustments noted above

 

(0.01

)%

(18.65

)%

(1.23

)%

 

(5.51

)%

2.60

%

Efficiency ratio excluding adjustments noted above (4)

 

55.55

%

55.39

%

51.03

%

 

55.78

%

51.61

%

 

 

 

 

 

 

 

Total average assets

$

49,535,543

 

48,754,091

 

47,266,199

 

 

48,869,404

 

45,236,425

 

 

 

 

 

 

 

 

Noninterest income to average assets (1)

 

0.93

%

0.28

%

0.76

%

 

0.71

%

1.05

%

Less: Adjustments noted above

 

%

0.60

%

0.08

%

 

0.16

%

(0.20

)%

Noninterest income (excluding adjustments noted above) to average assets (1)

 

0.93

%

0.88

%

0.84

%

 

0.87

%

0.85

%

 

 

 

 

 

 

 

Noninterest expense to average assets (1)

 

2.08

%

2.24

%

1.79

%

 

2.11

%

1.88

%

Adjustments as noted above

 

%

(0.24

)%

%

 

(0.09

)%

%

Noninterest expense (excluding adjustments noted above) to average assets (1)

 

2.08

%

2.00

%

1.79

%

 

2.02

%

1.88

%

 

 

 

 

 

 

 

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)

September

 

June

 

March

 

December

 

September

 

June

2024

 

2024

 

2024

 

2023

 

2023

 

2023

Net income available to common shareholders

$

142,893

 

49,364

 

120,146

 

91,181

 

128,805

 

193,501

 

Investment (gains) losses on sales of securities, net

 

 

72,103

 

 

(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

 

56

 

22

 

84

 

125

 

33

 

58

 

Recognition of mortgage servicing asset

 

 

 

(11,812

)

 

 

 

Fees related to terminating agreement to resell securities previously purchased and professional fees associated with capital optimization initiatives

 

 

28,400

 

 

 

 

 

Tax effect on above noted adjustments (16)

 

(14

)

(25,131

)

1,120

 

(7,278

)

(2,440

)

18,918

 

Net income available to common shareholders excluding adjustments noted above

$

142,935

 

124,758

 

116,788

 

129,266

 

136,125

 

136,746

 

 

 

 

 

 

 

 

Basic earnings per common share

$

1.87

 

0.65

 

1.58

 

1.20

 

1.69

 

2.55

 

Less:

 

 

 

 

 

 

Investment (gains) losses on sales of securities, net

 

 

0.94

 

 

 

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

 

 

 

 

 

 

 

Recognition of mortgage servicing asset

 

 

 

(0.15

)

 

 

 

Fees related to terminating agreement to resell securities previously purchased and professional fees associated with capital optimization initiatives

 

 

0.37

 

 

 

 

 

Tax effect on above noted adjustments (16)

 

 

(0.33

)

0.01

 

(0.10

)

(0.03

)

0.25

 

Basic earnings per common share excluding adjustments noted above

$

1.87

 

1.63

 

1.54

 

1.70

 

1.79

 

1.80

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

1.86

 

0.64

 

1.57

 

1.19

 

1.69

 

2.54

 

Less:

 

 

 

 

 

 

Investment (gains) losses on sales of securities, net

 

 

0.94

 

 

 

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

 

 

 

 

 

 

 

Recognition of mortgage servicing asset

 

 

 

(0.15

)

 

 

 

Fees related to terminating agreement to resell securities previously purchased and professional fees associated with capital optimization initiatives

 

 

0.37

 

 

 

 

 

Tax effect on above noted adjustments (16)

 

 

(0.32

)

0.01

 

(0.09

)

(0.03

)

0.25

 

Diluted earnings per common share excluding the adjustments noted above

$

1.86

 

1.63

 

1.53

 

1.68

 

1.79

 

1.80

 

 

 

 

 

 

 

 

Revenue per diluted common share

$

6.08

 

4.78

 

5.60

 

5.16

 

5.35

 

6.43

 

Adjustments due to revenue-impacting items as noted above

 

 

0.94

 

(0.15

)

0.09

 

0.13

 

(1.00

)

Revenue per diluted common share excluding adjustments due to revenue-impacting items as noted above

$

6.08

 

5.72

 

5.45

 

5.25

 

5.48

 

5.43

 

 

 

 

 

 

 

 

Book value per common share at quarter end (7)

$

79.33

 

77.15

 

76.23

 

75.80

 

73.23

 

73.32

 

Adjustment due to goodwill, core deposit and other intangible assets

 

(24.21

)

(24.23

)

(24.25

)

(24.42

)

(24.45

)

(24.47

)

Tangible book value per common share at quarter end (7)

$

55.12

 

52.92

 

51.98

 

51.38

 

48.78

 

48.85

 

 

 

 

 

 

 

 

Equity method investment (15)

 

 

 

 

 

 

Fee income from BHG, net of amortization

$

16,379

 

18,688

 

16,035

 

14,432

 

24,967

 

26,924

 

Funding cost to support investment

 

5,762

 

5,704

 

5,974

 

5,803

 

6,546

 

6,005

 

Pre-tax impact of BHG

 

10,617

 

12,984

 

10,061

 

8,629

 

18,421

 

20,919

 

Income tax expense at statutory rates (16)

 

2,654

 

3,246

 

2,515

 

2,157

 

4,605

 

5,230

 

Earnings attributable to BHG

$

7,963

 

9,738

 

7,546

 

6,472

 

13,816

 

15,689

 

Basic earnings per common share attributable to BHG

$

0.10

 

0.13

 

0.10

 

0.09

 

0.18

 

0.21

 

Diluted earnings per common share attributable to BHG

$

0.10

 

0.13

 

0.10

 

0.08

 

0.18

 

0.21

 

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

 

 

 

 

 

Nine months ended

(dollars in thousands, except per share data)

 

September 30,

 

2024

2023

Net income available to common shareholders

 

$

312,403

 

455,779

 

Investment losses on sales of securities, net

 

 

72,103

 

19,688

 

Gain on sale of fixed assets as a result of sale-leaseback transaction

 

 

 

(85,692

)

Loss on BOLI restructuring

 

 

 

 

ORE expense

 

 

162

 

190

 

FDIC special assessment

 

 

7,250

 

 

Recognition of mortgage servicing asset

 

 

(11,812

)

 

Fees related to terminating agreement to resell securities previously purchased and professional fees associated with capital optimization initiatives

 

 

28,400

 

 

Tax effect on adjustments noted above (16)

 

 

(24,026

)

16,454

 

Net income available to common shareholders excluding adjustments noted above

 

$

384,480

 

406,419

 

 

 

 

 

Basic earnings per common share

 

$

4.09

 

6.00

 

Less:

 

 

 

Investment losses on sales of securities, net

 

 

0.94

 

0.26

 

Gain on sale of fixed assets as a result of sale-leaseback transaction

 

 

 

(1.13

)

Loss on BOLI restructuring

 

 

 

 

ORE expense

 

 

 

 

Recognition of mortgage servicing asset

 

 

(0.15

)

 

FDIC special assessment

 

 

0.09

 

 

Fees related to terminating agreement to resell securities previously purchased and professional fees associated with capital optimization initiatives

 

 

0.37

 

 

Tax effect on above noted adjustments (16)

 

 

(0.31

)

0.22

 

Basic earnings per common share excluding adjustments noted above

 

$

5.03

 

5.35

 

 

 

 

 

Diluted earnings per common share

 

 

4.08

 

5.99

 

Less:

 

 

 

Investment losses on sales of securities, net

 

 

0.94

 

0.26

 

Gain on sale of fixed assets as a result of sale-leaseback transaction

 

 

 

(1.13

)

Loss on BOLI restructuring

 

 

 

 

ORE expense

 

 

 

 

FDIC special assessment

 

 

0.09

 

 

Recognition of mortgage servicing asset

 

 

(0.15

)

 

Fees related to terminating agreement to resell securities previously purchased and professional fees associated with capital optimization initiatives

 

 

0.37

 

 

Tax effect on above noted adjustments (16)

 

 

(0.31

)

0.22

 

Diluted earnings per common share excluding the adjustments noted above

 

$

5.02

 

5.34

 

 

 

 

 

Revenue per diluted common share

 

$

16.47

 

17.07

 

Adjustments due to revenue-impacting items as noted above

 

 

0.78

 

(0.87

)

Revenue per diluted common share excluding adjustments due to revenue-impacting items noted above

 

$

17.25

 

16.20

 

 

 

 

 

 

 

 

 

Equity method investment (15)

 

 

 

Fee income from BHG, net of amortization

 

$

51,102

 

70,970

 

Funding cost to support investment

 

 

17,345

 

18,332

 

Pre-tax impact of BHG

 

 

33,757

 

52,638

 

Income tax expense at statutory rates (16)

 

 

8,439

 

13,160

 

Earnings attributable to BHG

 

$

25,318

 

39,478

 

 

 

 

 

Basic earnings per common share attributable to BHG

 

$

0.33

 

0.52

 

Diluted earnings per common share attributable to BHG

 

$

0.33

 

0.52

 

 

 

 

 

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

 

Nine months ended

(dollars in thousands, except per share data)

September

June

September

 

September

September

2024

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

Return on average assets (1)

 

1.15

%

0.41

%

1.08

%

 

 

0.85

%

1.35

%

Adjustments as noted above

 

%

0.62

%

0.06

%

 

 

0.20

%

(0.15

)%

Return on average assets excluding adjustments noted above (1)

 

1.15

%

1.03

%

1.14

%

 

 

1.05

%

1.20

%

 

 

 

 

 

 

 

Tangible assets:

 

 

 

 

 

 

Total assets

$

50,701,888

 

49,366,969

 

47,523,790

 

 

$

50,701,888

 

47,523,790

 

Less: Goodwill

 

(1,846,973

)

(1,846,973

)

(1,846,973

)

 

 

(1,846,973

)

(1,846,973

)

Core deposit and other intangible assets

 

(22,755

)

(24,313

)

(29,216

)

 

 

(22,755

)

(29,216

)

Net tangible assets

$

48,832,160

 

47,495,683

 

45,647,601

 

 

$

48,832,160

 

45,647,601

 

 

 

 

 

 

 

 

Tangible common equity:

 

 

 

 

 

 

Total shareholders' equity

$

6,344,258

 

6,174,668

 

5,837,641

 

 

$

6,344,258

 

5,837,641

 

Less: Preferred shareholders' equity

 

(217,126

)

(217,126

)

(217,126

)

 

 

(217,126

)

(217,126

)

Total common shareholders' equity

 

6,127,132

 

5,957,542

 

5,620,515

 

 

 

6,127,132

 

5,620,515

 

Less: Goodwill

 

(1,846,973

)

(1,846,973

)

(1,846,973

)

 

 

(1,846,973

)

(1,846,973

)

Core deposit and other intangible assets

 

(22,755

)

(24,313

)

(29,216

)

 

 

(22,755

)

(29,216

)

Net tangible common equity

$

4,257,404

 

4,086,256

 

3,744,326

 

 

$

4,257,404

 

3,744,326

 

 

 

 

 

 

 

 

Ratio of tangible common equity to tangible assets

 

8.72

%

8.60

%

8.20

%

 

 

8.72

%

8.20

%

 

 

 

 

 

 

 

Average tangible assets:

 

 

 

 

 

 

Average assets

$

49,535,543

 

48,754,091

 

47,266,199

 

 

$

48,869,404

 

45,236,425

 

Less: Average goodwill

 

(1,846,973

)

(1,846,973

)

(1,846,973

)

 

 

(1,846,973

)

(1,846,973

)

Average core deposit and other intangible assets

 

(23,746

)

(25,309

)

(30,367

)

 

 

(25,312

)

(32,127

)

Net average tangible assets

$

47,664,824

 

46,881,809

 

45,388,859

 

 

$

46,997,119

 

43,357,325

 

 

 

 

 

 

 

 

Return on average assets (1)

 

1.15

%

0.41

%

1.08

%

 

 

0.85

%

1.35

%

Adjustment due to goodwill, core deposit and other intangible assets

 

0.04

%

0.01

%

0.05

%

 

 

0.04

%

0.06

%

Return on average tangible assets (1)

 

1.19

%

0.42

%

1.13

%

 

 

0.89

%

1.41

%

Adjustments as noted above

 

%

0.65

%

0.06

%

 

 

0.20

%

(0.16

)%

Return on average tangible assets excluding adjustments noted above (1)

 

1.19

%

1.07

%

1.19

%

 

 

1.09

%

1.25

%

 

 

 

 

 

 

 

Average tangible common equity:

 

 

 

 

 

 

Average shareholders' equity

$

6,265,710

 

6,138,722

 

5,898,196

 

 

$

6,162,726

 

5,763,152

 

Less: Average preferred equity

 

(217,126

)

(217,126

)

(217,126

)

 

 

(217,126

)

(217,126

)

Average common equity

 

6,048,584

 

5,921,596

 

5,681,070

 

 

 

5,945,600

 

5,546,026

 

Less: Average goodwill

 

(1,846,973

)

(1,846,973

)

(1,846,973

)

 

 

(1,846,973

)

(1,846,973

)

Average core deposit and other intangible assets

 

(23,746

)

(25,309

)

(30,367

)

 

 

(25,312

)

(32,127

)

Net average tangible common equity

$

4,177,865

 

4,049,314

 

3,803,730

 

 

$

4,073,315

 

3,666,926

 

 

 

 

 

 

 

 

Return on average equity (1)

 

9.07

%

3.23

%

8.66

%

 

 

6.77

%

10.57

%

Adjustment due to average preferred shareholders' equity

 

0.33

%

0.12

%

0.34

%

 

 

0.25

%

0.42

%

Return on average common equity (1)

 

9.40

%

3.35

%

9.00

%

 

 

7.02

%

10.99

%

Adjustment due to goodwill, core deposit and other intangible assets

 

4.21

%

1.55

%

4.43

%

 

 

3.22

%

5.63

%

Return on average tangible common equity (1)

 

13.61

%

4.90

%

13.43

%

 

 

10.24

%

16.62

%

Adjustments as noted above

 

%

7.49

%

0.77

%

 

 

2.37

%

(1.80

)%

Return on average tangible common equity excluding adjustments noted above (1)

 

13.61

%

12.39

%

14.20

%

 

 

12.61

%

14.82

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, the recognition of the mortgage servicing asset and fees related to terminating agreement to resell securities previously purchased and professional fees associated with capital optimization initiatives.

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.

17. Calculated using the same guidelines as are used in the Federal Financial Institutions Examination Council's Uniform Bank Performance Report.

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