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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Pinnacle Financial Partners Inc | NASDAQ:PNFP | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.22 | 0.27% | 83.02 | 82.47 | 90.00 | 83.48 | 82.39 | 82.55 | 159,102 | 22:30:00 |
3Q23 annualized linked-quarter, end-of-period loans and core deposits grew 10.1%
Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.69 for the quarter ended Sept. 30, 2023, compared to net income per diluted common share of $1.91 for the quarter ended Sept. 30, 2022, a decrease of 11.5 percent. Net income per diluted common share was $5.99 for the nine months ended Sept. 30, 2023, compared to $5.42 for the nine months ended Sept. 30, 2022, an increase of approximately 10.5 percent.
Three Months Ended
Nine Months Ended
September 30,
2023
June 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Diluted earnings per common share
$
1.69
$
2.54
$
1.91
$
5.99
$
5.42
Adjustments:
Investment losses on sales of securities, net
0.13
0.13
—
0.26
—
Gain on sale of fixed assets as a result of sale-leaseback transaction
—
(1.13
)
—
(1.13
)
—
Tax effect of above noted adjustments
(0.03
)
0.25
—
0.22
—
Diluted earnings per common share after adjustments
$
1.79
$
1.79
$
1.91
$
5.34
$
5.42
After considering the adjustments noted in the table above for the three months ended Sept. 30, 2023 and 2022, net income per diluted common share was $1.79, compared to $1.91 for the three months ended Sept. 30, 2022. Net income per diluted common share adjusted for the items noted in the table above was $5.34 for the nine months ended Sept. 30, 2023, compared to $5.42 for the nine months ended Sept. 30, 2022.
"Despite a volatile economic backdrop, our firm continues to benefit from our unmatched ability to attract talent and create raving clients that refuse to leave us," said M. Terry Turner, Pinnacle's president and chief executive officer. "We continued to deliver outsized growth to our already strong client deposit base, with our core deposits increasing by 10.1 percent annualized this quarter. The 2023 FDIC summary of deposits reflects significant market share growth over 2022 in all our major markets, validating both the exportability of our model and the sustainability of our outsized growth by taking market share from our larger, more vulnerable competitors.
"Additionally, during the quarter we continued to avoid certain asset classes and reduced our exposure in loan segments with elevated risks and expect that to continue for the next few quarters. Against that backdrop, we are also pleased that overall loan growth during the third quarter of 2023 was $790 million, or 10.1 percent linked-quarter annualized.
"We also added 29 revenue producers during the third quarter. Going forward, I have asked our line leadership to accelerate their efforts to recruit the best relationship bankers in our markets in order to seize on the vulnerabilities that exist at many of our larger competitors. It is this ability to attract market-leading revenue producers that enables us to continue compounding earnings and growing tangible book value more reliably than peers, even in a very challenging operating environment. Historically, our operating leverage has compared favorably to our peers; however, given the outsized number of non-revenue support hires we have invested in over the last few years, I would now expect our focus on recruiting more revenue producers to yield an even stronger operating leverage advantage for us as we move into 2024."
BALANCE SHEET GROWTH AND LIQUIDITY:
Total assets at Sept. 30, 2023 were $47.5 billion, an increase of approximately $6.5 billion from Sept. 30, 2022 and $647.8 million from June 30, 2023, reflecting a year-over-year increase of 15.9 percent and a linked-quarter annualized increase of 5.5 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)
Sept. 30, 2023
June 30, 2023
Sept. 30, 2022
Loans
$
31,943,284
$
31,153,290
10.1
%
$
27,711,694
15.3
%
Securities
6,882,276
6,623,457
15.6
%
6,481,018
6.2
%
Other interest-earning assets
3,512,452
4,001,844
(48.9
)%
2,225,435
57.8
%
Total interest-earning assets
$
42,338,012
$
41,778,591
5.4
%
$
36,418,147
16.3
%
Core deposits:
Noninterest-bearing deposits
$
8,324,325
$
8,436,799
(5.3
)%
$
10,567,873
(21.2
)%
Interest-bearing core deposits(1)
25,282,458
24,343,968
15.4
%
20,180,944
25.3
%
Noncore deposits and other funding(2)
7,420,341
7,731,082
(16.1
)%
4,444,868
66.9
%
Total funding
$
41,027,124
$
40,511,849
5.1
%
$
35,193,685
16.6
%
(1):
Interest-bearing core deposits are interest-bearing deposits, money market accounts, 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.
"As we entered the third quarter, we expected three important deposit related trends to materialize for our firm," Turner said. "First, we believed that we would continue to grow our core deposit base more rapidly than peers. Our core deposits increased by 10.1 percent linked-quarter annualized in the third quarter, which we believe is exceptional in this environment. Second, we also believed the rate of decrease in noninterest bearing deposits should begin to subside, which it has. Demand deposit contraction in the third quarter was only $112.5 million, compared to $581.6 million and $794.3 million in the second and first quarters of 2023, respectively. And third, we expected the rate of increase in our overall deposit costs would lessen, which it did, having increased by 40 basis points in the third quarter, compared to 49 basis points and 63 basis points in the second and first quarters, respectively. We are pleased to see these three critical trends improve during the third quarter and are optimistic about continued improvement as we enter the fourth quarter of 2023."
PRE-TAX, PRE-PROVISION NET REVENUE (PPNR) GROWTH:
Pre-tax, pre-provision net revenues (PPNR) for the three and nine months ended Sept. 30, 2023 were $194.8 million and $662.4 million, respectively, a decrease of 7.8 percent and an increase of 17.1 percent, respectively, from the $211.3 million and $565.7 million, respectively, recognized in the three and nine months ended Sept. 30, 2022.
Three months ended
Nine months ended
Sept. 30,
Sept. 30,
(dollars in thousands)
2023
2022
% change
2023
2022
% change
Revenues:
Net interest income
$
317,242
$
305,784
3.7
%
$
944,866
$
809,833
16.7
%
Noninterest income
90,797
104,805
(13.4
)%
354,165
333,803
6.1
%
Total revenues
408,039
410,589
(0.6
)%
1,299,031
1,143,636
13.6
%
Noninterest expense
213,233
199,253
7.0
%
636,601
577,952
10.1
%
Pre-tax, pre-provision net revenue (PPNR)
194,806
211,336
(7.8
)%
662,430
565,684
17.1
%
Adjustments:
Investment losses (gains) on sales of securities, net
9,727
(217
)
NM
19,688
(156
)
NM
Gain on the sale of fixed assets as a result of sale leaseback
—
—
NM
(85,692
)
—
NM
ORE expense (benefit)
33
(90
)
NM
190
101
88.1
%
Adjusted PPNR
$
204,566
$
211,029
(3.1
)%
$
596,616
$
565,629
5.5
%
"To grow net interest income in this environment on a linked-quarter basis is a great achievement," said Harold R. Carpenter, Pinnacle's chief financial officer. "The net reduction in fee income in the third quarter of 2023 compared to the second quarter was largely attributable to the $85.7 million gain on sale of fixed assets recognized in connection with a sale-leaseback transaction during the prior quarter.
"BHG had a stronger quarter than we originally anticipated. Even though their pipelines remain strong and credit costs improved during the quarter, our 2023 outlook for BHG remains essentially unchanged at this time. Thus, we believe BHG's fourth quarter results will not be as strong as the last two quarters. Excluding the impact of BHG, the sale-leaseback transaction in the second quarter and the bond losses experienced in the second and third quarters, third quarter fee income increased slightly over the second quarter."
SOUNDNESS AND PROFITABILITY:
Three months ended
Nine months ended
September 30,
2023
June 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Net interest margin
3.06
%
3.20
%
3.47
%
3.22
%
3.18
%
Efficiency ratio
52.26
%
43.26
%
48.53
%
49.01
%
50.54
%
Return on average assets
1.08
%
1.71
%
1.42
%
1.35
%
1.40
%
Return on average tangible common equity (TCE)
13.43
%
21.06
%
17.40
%
16.62
%
16.89
%
As of
September 30,
2023
June 30,
2023
September 30,
2022
Shareholders' equity to total assets
12.3
%
12.5
%
13.0
%
Average loan to deposit ratio
82.80
%
84.94
%
81.61
%
Uninsured/uncollateralized deposits to total deposits
28.89
%
28.31
%
39.71
%
Tangible common equity to tangible assets
8.2
%
8.3
%
8.3
%
Book value per common share
$
73.23
$
73.32
$
67.07
Tangible book value per common share
$
48.78
$
48.85
$
42.44
Annualized net loan charge-offs to avg. loans (1)
0.23
%
0.13
%
0.16
%
Nonperforming assets to total loans, ORE and other nonperforming assets (NPAs)
0.14
%
0.15
%
0.15
%
Classified asset ratio (Pinnacle Bank) (2)
4.60
%
3.30
%
2.60
%
Allowance for credit losses (ACL) to total loans
1.08
%
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.
"Although our net interest margin declined on a linked-quarter basis by approximately 14 basis points, we are pleased that the size of the decline was lower than what we experienced over the last several quarters," Carpenter said. "Increased deposit pricing and the continued reduction in our noninterest-bearing deposit account balances were again the primary contributors to our decreased net interest margin.
"Our investment securities portfolio, including both the held-to-maturity and available-for-sale portfolios, continues to perform well for us. Approximately 35 percent of our available-for-sale securities portfolio is effectively indexed to floating rates, which we consider to be a meaningful advantage. Despite this advantage, the impact of increased market interest rates on investment securities caused our accumulated other comprehensive loss to increase by $127 million this quarter, contributing to a slight decline in our tangible book value per share from $48.85 at June 30, 2023 to $48.78 at Sept. 30, 2023.
"Lastly, net charge-offs increased this quarter primarily due to a single loan acquired through our syndication platform. At June 30, 2023, we had placed this loan on nonperforming status and allocated approximately 50 percent of the loan to our allowance for credit losses. We were notified during the third quarter by the lead syndication bank that the borrower filed for bankruptcy protection, which prompted us to charge off substantially all of this loan, or $9.5 million, during the third quarter.
"Nevertheless, our asset quality metrics such as past due loans, classified assets and nonperforming loans continue to perform at historically low levels. Our strong credit culture, as well as operating in some of the best markets in the U.S., enable our portfolio to continue performing at peer-leading levels of classified and nonperforming loans."
BOARD OF DIRECTORS DECLARES DIVIDENDS
On Oct. 17, 2023, Pinnacle Financial's Board of Directors approved a quarterly cash dividend of $0.22 per common share to be paid on Nov. 24, 2023 to common shareholders of record as of the close of business on Nov. 3, 2023. 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, 2023 to shareholders of record at the close of business on Nov. 16, 2023. 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. 18, 2023, to discuss third quarter 2023 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 bank in the Nashville-Murfreesboro-Franklin MSA according to 2023 deposit data from the FDIC, is listed by Forbes among the top 25 banks in the nation and earned a spot on the 2022 list of 100 Best Companies to Work For® in the U.S., its sixth consecutive appearance. Pinnacle was also listed in Fortune magazine as the second best company to work for in the U.S. for women. American Banker recognized Pinnacle as one of America’s Best Banks to Work For nine years in a row and No. 1 among banks with more than $11 billion in assets in 2021.
Pinnacle 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 $47.5 billion in assets as of Sept. 30, 2023. As the second-largest bank holding company in Tennessee, Pinnacle operates in 17 primarily urban markets and their surrounding communities.
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 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 Tennessee, North Carolina, South Carolina, Georgia, Alabama, Virginia and Kentucky, 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; (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; (xi) Pinnacle Financial's ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions; (xii) 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; 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, 2022, 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 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 2023 versus certain periods in 2022 and to internally prepared projections.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS – UNAUDITED
(dollars in thousands, except for share and per share data)
September 30,
2023
December 31,
2022
September 30,
2022
ASSETS
Cash and noninterest-bearing due from banks
$
279,652
$
268,649
$
168,010
Restricted cash
17,356
31,447
18,636
Interest-bearing due from banks
2,855,094
877,286
1,616,878
Cash and cash equivalents
3,152,102
1,177,382
1,803,524
Securities purchased with agreement to resell
500,000
513,276
528,999
Securities available-for-sale, at fair value
3,863,697
3,558,870
3,542,601
Securities held-to-maturity (fair value of $2.6 billion, $2.7 billion, and $2.5 billion, net of allowance for credit losses of $1.7 million, $1.6 million, and $1.6 million at Sept. 30, 2023, Dec. 31, 2022, and Sept. 30, 2022, respectively)
3,018,579
3,079,050
2,938,417
Consumer loans held-for-sale
119,489
42,237
45,509
Commercial loans held-for-sale
20,513
21,093
15,413
Loans
31,943,284
29,041,605
27,711,694
Less allowance for credit losses
(346,192
)
(300,665
)
(288,088
)
Loans, net
31,597,092
28,740,940
27,423,606
Premises and equipment, net
252,669
327,885
320,273
Equity method investment
480,996
443,185
425,892
Accrued interest receivable
177,390
161,182
110,170
Goodwill
1,846,973
1,846,973
1,846,466
Core deposits and other intangible assets
29,216
34,555
35,666
Other real estate owned
2,555
7,952
7,787
Other assets
2,462,519
2,015,441
1,955,795
Total assets
$
47,523,790
$
41,970,021
$
41,000,118
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing
$
8,324,325
$
9,812,744
$
10,567,873
Interest-bearing
10,852,086
7,884,605
7,549,510
Savings and money market accounts
14,306,359
13,774,534
12,712,809
Time
4,813,039
3,489,355
2,859,857
Total deposits
38,295,809
34,961,238
33,690,049
Securities sold under agreements to repurchase
195,999
194,910
190,554
Federal Home Loan Bank advances
2,110,598
464,436
889,248
Subordinated debt and other borrowings
424,718
424,055
423,834
Accrued interest payable
67,442
19,478
10,202
Other liabilities
591,583
386,512
454,119
Total liabilities
41,686,149
36,450,629
35,658,006
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, 2023, Dec. 31, 2022, and Sept. 30, 2022, respectively
217,126
217,126
217,126
Common stock, par value $1.00; 180.0 million shares authorized; 76.8 million, 76.5 million and 76.4 million shares issued and outstanding at Sept. 30, 2023, Dec. 31, 2022, and Sept. 30, 2022, respectively
76,753
76,454
76,413
Additional paid-in capital
3,097,702
3,074,867
3,066,527
Retained earnings
2,745,934
2,341,706
2,224,736
Accumulated other comprehensive loss, net of taxes
(299,874
)
(190,761
)
(242,690
)
Total shareholders' equity
5,837,641
5,519,392
5,342,112
Total liabilities and shareholders' equity
$
47,523,790
$
41,970,021
$
41,000,118
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
September 30,
2023
June 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Interest income:
Loans, including fees
$
508,963
$
478,896
$
315,935
$
1,419,761
$
795,164
Securities
Taxable
36,525
31,967
18,204
97,850
41,977
Tax-exempt
24,185
24,603
21,408
72,590
58,752
Federal funds sold and other
57,621
39,773
16,217
118,371
26,864
Total interest income
627,294
575,239
371,764
1,708,572
922,757
Interest expense:
Deposits
280,305
228,668
55,189
685,562
83,620
Securities sold under agreements to repurchase
1,071
783
182
2,449
320
FHLB advances and other borrowings
28,676
30,395
10,609
75,695
28,984
Total interest expense
310,052
259,846
65,980
763,706
112,924
Net interest income
317,242
315,393
305,784
944,866
809,833
Provision for credit losses
26,826
31,689
27,493
77,282
43,120
Net interest income after provision for credit losses
290,416
283,704
278,291
867,584
766,713
Noninterest income:
Service charges on deposit accounts
12,665
12,180
10,906
36,563
33,552
Investment services
13,253
14,174
10,780
39,022
34,676
Insurance sales commissions
2,882
3,252
2,928
10,598
9,518
Gains on mortgage loans sold, net
2,012
1,567
1,117
5,632
7,333
Investment losses (gains) on sales, net
(9,727
)
(9,961
)
217
(19,688
)
156
Trust fees
6,640
6,627
5,706
19,696
17,744
Income from equity method investment
24,967
26,924
41,341
70,970
124,461
Gain on sale of fixed assets
87
85,724
227
85,946
425
Other noninterest income
38,018
33,352
31,583
105,426
105,938
Total noninterest income
90,797
173,839
104,805
354,165
333,803
Noninterest expense:
Salaries and employee benefits
130,344
132,443
129,910
398,495
378,373
Equipment and occupancy
36,900
33,706
27,886
100,959
80,343
Other real estate, net
33
58
(90
)
190
101
Marketing and other business development
5,479
5,664
4,958
17,085
13,494
Postage and supplies
2,621
2,863
2,795
8,303
7,486
Amortization of intangibles
1,765
1,780
1,951
5,339
5,873
Other noninterest expense
36,091
35,127
31,843
106,230
92,282
Total noninterest expense
213,233
211,641
199,253
636,601
577,952
Income before income taxes
167,980
245,902
183,843
585,148
522,564
Income tax expense
35,377
48,603
35,185
117,975
99,669
Net income
132,603
197,299
148,658
467,173
422,895
Preferred stock dividends
(3,798
)
(3,798
)
(3,798
)
(11,394
)
(11,394
)
Net income available to common shareholders
$
128,805
$
193,501
$
144,860
$
455,779
$
411,501
Per share information:
Basic net income per common share
$
1.69
$
2.55
$
1.91
$
6.00
$
5.43
Diluted net income per common share
$
1.69
$
2.54
$
1.91
$
5.99
$
5.42
Weighted average common shares outstanding:
Basic
76,044,182
76,030,081
75,761,930
75,998,965
75,723,129
Diluted
76,201,916
76,090,321
75,979,056
76,102,622
75,945,469
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, 2021
$
217,126
76,143
$
76,143
$
3,045,802
$
1,864,350
$
107,186
$
5,310,607
Exercise of employee common stock options & related tax benefits
—
14
14
264
—
—
278
Preferred dividends paid ($50.64 per share)
—
—
—
—
(11,394
)
—
(11,394
)
Common dividends paid ($0.66 per share)
—
—
—
—
(51,115
)
(51,115
)
Issuance of restricted common shares, net of forfeitures
—
207
207
(169
)
—
—
38
Restricted shares withheld for taxes & related tax benefits
—
(46
)
(46
)
(4,657
)
—
—
(4,703
)
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
—
95
95
(5,595
)
—
—
(5,500
)
Compensation expense for restricted shares & performance stock units
—
—
—
30,882
—
—
30,882
Net income
—
—
—
—
422,895
—
422,895
Other comprehensive loss
—
—
—
—
—
(349,876
)
(349,876
)
Balance at Sept. 30, 2022
$
217,126
76,413
$
76,413
$
3,066,527
$
2,224,736
$
(242,690
)
$
5,342,112
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, net of forfeitures
—
219
219
(219
)
—
—
—
Restricted shares withheld for taxes & related tax benefits
—
(53
)
(53
)
(3,712
)
—
—
(3,765
)
Issuance of common stock pursuant to RSU and 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 Sept. 30, 2023
$
217,126
76,753
$
76,753
$
3,097,702
$
2,745,934
$
(299,874
)
$
5,837,641
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands)
September
June
March
December
September
June
2023
2023
2023
2022
2022
2022
Balance sheet data, at quarter end:
Commercial and industrial loans
$
11,307,611
10,983,911
10,723,327
10,241,362
9,748,994
9,295,808
Commercial real estate - owner occupied loans
3,944,616
3,845,359
3,686,796
3,587,257
3,426,271
3,243,018
Commercial real estate - investment loans
5,957,426
5,682,652
5,556,484
5,277,454
5,122,127
4,909,598
Commercial real estate - multifamily and other loans
1,490,184
1,488,236
1,331,249
1,265,165
1,042,854
951,998
Consumer real estate - mortgage loans
4,768,780
4,692,673
4,531,285
4,435,046
4,271,913
4,047,051
Construction and land development loans
3,942,143
3,904,774
3,909,024
3,679,498
3,548,970
3,386,866
Consumer and other loans
532,524
555,685
559,706
555,823
550,565
498,757
Total loans
31,943,284
31,153,290
30,297,871
29,041,605
27,711,694
26,333,096
Allowance for credit losses
(346,192
)
(337,459
)
(313,841
)
(300,665
)
(288,088
)
(272,483
)
Securities
6,882,276
6,623,457
6,878,831
6,637,920
6,481,018
6,553,893
Total assets
47,523,790
46,875,982
45,119,587
41,970,021
41,000,118
40,121,292
Noninterest-bearing deposits
8,324,325
8,436,799
9,018,439
9,812,744
10,567,873
11,058,198
Total deposits
38,295,809
37,722,661
36,178,553
34,961,238
33,690,049
32,595,303
Securities sold under agreements to repurchase
195,999
163,774
149,777
194,910
190,554
199,585
FHLB advances
2,110,598
2,200,917
2,166,508
464,436
889,248
1,289,059
Subordinated debt and other borrowings
424,718
424,497
424,276
424,055
423,834
423,614
Total shareholders' equity
5,837,641
5,843,759
5,684,128
5,519,392
5,342,112
5,315,239
Balance sheet data, quarterly averages:
Total loans
$
31,529,854
30,882,205
29,633,640
28,402,197
27,021,031
25,397,389
Securities
6,801,285
6,722,247
6,765,126
6,537,262
6,542,026
6,446,774
Federal funds sold and other
4,292,956
3,350,705
2,100,757
1,828,588
2,600,978
2,837,679
Total earning assets
42,624,095
40,955,157
38,499,523
36,768,047
36,164,035
34,681,842
Total assets
47,266,199
45,411,961
42,983,854
41,324,251
40,464,649
38,780,786
Noninterest-bearing deposits
8,515,733
8,599,781
9,332,317
10,486,233
10,926,069
10,803,439
Total deposits
38,078,665
36,355,859
35,291,775
34,177,281
33,108,415
31,484,100
Securities sold under agreements to repurchase
184,681
162,429
219,082
199,610
215,646
216,846
FHLB advances
2,132,638
2,352,045
1,130,356
701,813
1,010,865
1,095,531
Subordinated debt and other borrowings
426,855
426,712
426,564
427,503
426,267
427,191
Total shareholders' equity
5,898,196
5,782,239
5,605,604
5,433,274
5,403,244
5,316,219
Statement of operations data, for the three months ended:
Interest income
$
627,294
575,239
506,039
451,178
371,764
292,376
Interest expense
310,052
259,846
193,808
131,718
65,980
27,802
Net interest income
317,242
315,393
312,231
319,460
305,784
264,574
Provision for credit losses
26,826
31,689
18,767
24,805
27,493
12,907
Net interest income after provision for credit losses
290,416
283,704
293,464
294,655
278,291
251,667
Noninterest income
90,797
173,839
89,529
82,321
104,805
125,502
Noninterest expense
213,233
211,641
211,727
202,047
199,253
196,038
Income before income taxes
167,980
245,902
171,266
174,929
183,843
181,131
Income tax expense
35,377
48,603
33,995
37,082
35,185
36,004
Net income
132,603
197,299
137,271
137,847
148,658
145,127
Preferred stock dividends
(3,798
)
(3,798
)
(3,798
)
(3,798
)
(3,798
)
(3,798
)
Net income available to common shareholders
$
128,805
193,501
133,473
134,049
144,860
141,329
Profitability and other ratios:
Return on avg. assets (1)
1.08
%
1.71
%
1.26
%
1.29
%
1.42
%
1.46
%
Return on avg. equity (1)
8.66
%
13.42
%
9.66
%
9.79
%
10.64
%
10.66
%
Return on avg. common equity (1)
9.00
%
13.95
%
10.05
%
10.20
%
11.08
%
11.12
%
Return on avg. tangible common equity (1)
13.43
%
21.06
%
15.43
%
15.95
%
17.40
%
17.62
%
Common stock dividend payout ratio (14)
11.35
%
11.04
%
12.07
%
12.26
%
12.34
%
12.63
%
Net interest margin (2)
3.06
%
3.20
%
3.40
%
3.60
%
3.47
%
3.17
%
Noninterest income to total revenue (3)
22.25
%
35.53
%
22.28
%
20.49
%
25.53
%
32.17
%
Noninterest income to avg. assets (1)
0.76
%
1.54
%
0.84
%
0.79
%
1.03
%
1.30
%
Noninterest exp. to avg. assets (1)
1.79
%
1.87
%
2.00
%
1.94
%
1.95
%
2.03
%
Efficiency ratio (4)
52.26
%
43.26
%
52.70
%
50.29
%
48.53
%
50.26
%
Avg. loans to avg. deposits
82.80
%
84.94
%
83.97
%
83.10
%
81.61
%
80.67
%
Securities to total assets
14.48
%
14.13
%
15.25
%
15.82
%
15.81
%
16.34
%
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, 2023
September 30, 2022
Average
Balances
Interest
Rates/
Yields
Average
Balances
Interest
Rates/
Yields
Interest-earning assets
Loans (1) (2)
$
31,529,854
$
508,963
6.50
%
$
27,021,031
$
315,935
4.73
%
Securities
Taxable
3,542,383
36,525
4.09
%
3,436,460
18,204
2.10
%
Tax-exempt (2)
3,258,902
24,185
3.51
%
3,105,566
21,408
3.28
%
Interest-bearing due from banks
3,553,640
51,109
5.71
%
1,491,338
8,666
2.31
%
Resell agreements
503,153
3,258
2.57
%
920,786
5,616
2.42
%
Federal funds sold
—
—
—
%
—
—
—
%
Other
236,163
3,254
5.47
%
188,854
1,935
4.06
%
Total interest-earning assets
42,624,095
$
627,294
5.95
%
36,164,035
$
371,764
4.20
%
Nonearning assets
Intangible assets
1,877,340
1,883,350
Other nonearning assets
2,764,764
2,417,264
Total assets
$
47,266,199
$
40,464,649
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking
10,414,869
98,974
3.77
%
6,763,990
18,008
1.06
%
Savings and money market
14,131,277
128,453
3.61
%
12,765,435
29,347
0.91
%
Time
5,016,786
52,878
4.18
%
2,652,921
7,834
1.17
%
Total interest-bearing deposits
29,562,932
280,305
3.76
%
22,182,346
55,189
0.99
%
Securities sold under agreements to repurchase
184,681
1,071
2.30
%
215,646
182
0.34
%
Federal Home Loan Bank advances
2,132,638
22,710
4.22
%
1,010,865
5,762
2.26
%
Subordinated debt and other borrowings
426,855
5,966
5.54
%
426,267
4,847
4.51
%
Total interest-bearing liabilities
32,307,106
310,052
3.81
%
23,835,124
65,980
1.10
%
Noninterest-bearing deposits
8,515,733
—
—
10,926,069
—
—
Total deposits and interest-bearing liabilities
40,822,839
$
310,052
3.01
%
34,761,193
$
65,980
0.75
%
Other liabilities
545,164
300,212
Shareholders' equity
5,898,196
5,403,244
Total liabilities and shareholders' equity
$
47,266,199
$
40,464,649
Net interest income
$
317,242
$
305,784
Net interest spread (3)
2.14
%
3.10
%
Net interest margin (4)
3.06
%
3.47
%
(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 September 30, 2023 compared to $10.8 million for the three months ended September 30, 2022. 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 September 30, 2023 would have been 2.94% compared to a net interest spread of 3.44% for the three months ended September 30, 2022.
(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, 2023
September 30, 2022
Average
Balances
Interest
Rates/
Yields
Average
Balances
Interest
Rates/
Yields
Interest-earning assets
Loans (1) (2)
$
30,688,846
$
1,419,761
6.27
%
$
25,433,939
$
795,164
4.27
%
Securities
Taxable
3,482,068
97,850
3.76
%
3,400,046
41,977
1.65
%
Tax-exempt (2)
3,280,951
72,590
3.53
%
2,978,901
58,752
3.18
%
Interest-bearing due from banks
2,522,300
100,275
5.32
%
2,050,401
12,580
0.82
%
Resell agreements
508,467
9,960
2.62
%
1,175,119
10,674
1.21
%
Federal funds sold
—
—
—
%
—
—
—
%
Other
225,402
8,136
4.83
%
179,293
3,610
2.69
%
Total interest-earning assets
40,708,034
$
1,708,572
5.72
%
35,217,699
$
922,757
3.61
%
Nonearning assets
Intangible assets
1,879,100
1,876,614
Other nonearning assets
2,649,291
2,206,600
Total assets
$
45,236,425
$
39,300,913
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking
9,199,603
227,263
3.30
%
6,560,068
26,741
0.54
%
Savings and money market
14,063,699
335,997
3.19
%
12,479,841
43,542
0.47
%
Time
4,509,386
122,302
3.63
%
2,272,063
13,337
0.78
%
Total interest-bearing deposits
27,772,688
685,562
3.30
%
21,311,972
83,620
0.52
%
Securities sold under agreements to repurchase
188,605
2,449
1.74
%
204,251
320
0.21
%
Federal Home Loan Bank advances
1,875,351
58,284
4.16
%
998,828
15,467
2.07
%
Subordinated debt and other borrowings
426,711
17,411
5.46
%
431,681
13,517
4.19
%
Total interest-bearing liabilities
30,263,355
763,706
3.37
%
22,946,732
112,924
0.66
%
Noninterest-bearing deposits
8,812,953
—
—
10,737,610
—
—
Total deposits and interest-bearing liabilities
39,076,308
$
763,706
2.61
%
33,684,342
$
112,924
0.45
%
Other liabilities
396,965
266,018
Shareholders' equity
5,763,152
5,350,553
Total liabilities and shareholders' equity
$
45,236,425
$
39,300,913
Net interest income
$
944,866
$
809,833
Net interest spread (3)
2.35
%
2.95
%
Net interest margin (4)
3.22
%
3.18
%
(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 $34.1 million of taxable equivalent income for the nine months ended September 30, 2023 compared to $28.8 million for the nine months ended September 30, 2022. 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 September 30, 2023 would have been 3.11% compared to a net interest spread of 3.16% for the nine months ended September 30, 2022.
(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
2023
2023
2023
2022
2022
2022
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans
$
42,950
44,289
36,988
38,116
34,115
15,459
ORE and other nonperforming assets (NPAs)
3,019
3,105
7,802
7,952
7,787
8,237
Total nonperforming assets
$
45,969
47,394
44,790
46,068
41,902
23,696
Past due loans over 90 days and still accruing interest
$
4,969
5,257
5,284
4,406
6,757
3,840
Accruing purchase credit deteriorated loans
$
7,010
7,415
7,684
8,060
8,759
9,194
Net loan charge-offs
$
18,093
9,771
7,291
11,729
10,983
877
Allowance for credit losses to nonaccrual loans
806.0
%
762.0
%
848.5
%
788.8
%
844.5
%
1,762.6
%
As a percentage of total loans:
Past due accruing loans over 30 days
0.16
%
0.14
%
0.14
%
0.15
%
0.13
%
0.11
%
Potential problem loans
0.42
%
0.32
%
0.22
%
0.19
%
0.21
%
0.32
%
Allowance for credit losses
1.08
%
1.08
%
1.04
%
1.04
%
1.04
%
1.03
%
Nonperforming assets to total loans, ORE and other NPAs
0.14
%
0.15
%
0.15
%
0.16
%
0.15
%
0.09
%
Classified asset ratio (Pinnacle Bank) (6)
4.6
%
3.3
%
2.7
%
2.4
%
2.6
%
2.9
%
Annualized net loan charge-offs to avg. loans (5)
0.23
%
0.13
%
0.10
%
0.17
%
0.16
%
0.01
%
Interest rates and yields:
Loans
6.50
%
6.30
%
6.00
%
5.54
%
4.73
%
4.07
%
Securities
3.81
%
3.66
%
3.47
%
3.19
%
2.66
%
2.29
%
Total earning assets
5.95
%
5.74
%
5.45
%
5.02
%
4.20
%
3.49
%
Total deposits, including non-interest bearing
2.92
%
2.52
%
2.03
%
1.40
%
0.66
%
0.23
%
Securities sold under agreements to repurchase
2.30
%
1.93
%
1.10
%
0.94
%
0.34
%
0.15
%
FHLB advances
4.22
%
4.20
%
3.94
%
3.04
%
2.26
%
1.92
%
Subordinated debt and other borrowings
5.54
%
5.44
%
5.38
%
4.98
%
4.51
%
4.04
%
Total deposits and interest-bearing liabilities
3.01
%
2.65
%
2.12
%
1.47
%
0.75
%
0.34
%
Capital and other ratios (6):
Pinnacle Financial ratios:
Shareholders' equity to total assets
12.3
%
12.5
%
12.6
%
13.2
%
13.0
%
13.2
%
Common equity Tier one
10.3
%
10.2
%
9.9
%
10.0
%
10.0
%
10.2
%
Tier one risk-based
10.9
%
10.8
%
10.5
%
10.5
%
10.7
%
10.9
%
Total risk-based
12.8
%
12.7
%
12.4
%
12.4
%
12.6
%
12.9
%
Leverage
9.4
%
9.5
%
9.6
%
9.7
%
9.7
%
9.8
%
Tangible common equity to tangible assets
8.2
%
8.3
%
8.3
%
8.5
%
8.3
%
8.4
%
Pinnacle Bank ratios:
Common equity Tier one
11.2
%
11.1
%
10.8
%
10.9
%
11.1
%
11.0
%
Tier one risk-based
11.2
%
11.1
%
10.8
%
10.9
%
11.1
%
11.0
%
Total risk-based
12.0
%
11.9
%
11.6
%
11.6
%
11.8
%
11.7
%
Leverage
9.7
%
9.8
%
9.9
%
10.1
%
10.1
%
9.9
%
Construction and land development loans as a percentage of total capital (17)
83.1
%
84.5
%
88.5
%
85.9
%
85.4
%
87.4
%
Non-owner occupied commercial real estate and multi-family as a percentage of total capital (17)
256.4
%
256.7
%
261.1
%
249.6
%
244.0
%
250.2
%
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
2023
2023
2023
2022
2022
2022
Per share data:
Earnings per common share – basic
$
1.69
2.55
1.76
1.77
1.91
1.87
Earnings per common share - basic, excluding non-GAAP adjustments
$
1.79
1.80
1.76
1.77
1.91
1.87
Earnings per common share – diluted
$
1.69
2.54
1.76
1.76
1.91
1.86
Earnings per common share - diluted, excluding non-GAAP adjustments
$
1.79
1.79
1.76
1.76
1.91
1.86
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)
$
73.23
73.32
71.24
69.35
67.07
66.74
Tangible book value per common share at quarter end (7)
$
48.78
48.85
46.75
44.74
42.44
42.08
Revenue per diluted common share
$
5.35
6.43
5.28
5.27
5.40
5.14
Revenue per diluted common share, excluding non-GAAP adjustments
$
5.48
5.43
5.28
5.27
5.40
5.14
Investor information:
Closing sales price of common stock on last trading day of quarter
$
67.04
56.65
55.16
73.40
81.10
72.31
High closing sales price of common stock during quarter
$
75.95
57.93
82.79
87.81
87.66
91.42
Low closing sales price of common stock during quarter
$
56.41
46.17
52.51
70.74
68.68
68.56
Closing sales price of depositary shares on last trading day of quarter
$
22.70
23.75
24.15
25.35
25.33
25.19
High closing sales price of depositary shares during quarter
$
23.85
24.90
25.71
25.60
26.23
26.44
Low closing sales price of depositary shares during quarter
$
21.54
19.95
20.77
23.11
24.76
24.75
Other information:
Residential mortgage loan sales:
Gross loans sold
$
198,247
192,948
120,146
134,514
181,139
239,736
Gross fees (8)
$
4,350
4,133
2,795
3,149
3,189
6,523
Gross fees as a percentage of loans originated
2.19
%
2.14
%
2.33
%
2.34
%
1.76
%
2.72
%
Net gain (loss) on residential mortgage loans sold
$
2,012
1,567
2,053
(65
)
1,117
2,150
Investment gains (losses) on sales of securities, net (13)
$
(9,727
)
(9,961
)
—
—
217
—
Brokerage account assets, at quarter end (9)
$
9,041,716
9,007,230
8,634,339
8,049,125
7,220,405
6,761,480
Trust account managed assets, at quarter end
$
5,047,128
5,084,592
4,855,951
4,560,752
4,162,639
4,207,406
Core deposits (10)
$
33,606,783
32,780,767
32,054,111
31,301,077
30,748,817
30,011,444
Core deposits to total funding (10)
81.9
%
80.9
%
82.4
%
86.8
%
87.4
%
87.0
%
Risk-weighted assets
$
39,527,086
38,853,588
38,117,659
36,216,901
35,281,315
33,366,074
Number of offices
128
127
126
123
120
119
Total core deposits per office
$
262,553
258,116
254,398
254,480
256,240
252,197
Total assets per full-time equivalent employee
$
14,274
14,166
13,750
12,948
12,875
13,052
Annualized revenues per full-time equivalent employee
$
486.2
593.0
496.5
491.8
511.5
509.0
Annualized expenses per full-time equivalent employee
$
254.1
256.5
261.7
247.3
248.2
255.8
Number of employees (full-time equivalent)
3,329.5
3,309.0
3,281.5
3,241.5
3,184.5
3,074.0
Associate retention rate (11)
93.6
%
94.1
%
93.8
%
93.8
%
93.6
%
93.3
%
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
2023
2023
2022
2023
2022
Net interest income
$
317,242
315,393
305,784
944,866
809,833
Noninterest income
90,797
173,839
104,805
354,165
333,803
Total revenues
408,039
489,232
410,589
1,299,031
1,143,636
Less: Investment losses (gains) on sales of securities, net
9,727
9,961
(217
)
19,688
(156
)
Gain on sale of fixed assets as a result of sale-leaseback transaction
—
(85,692
)
—
(85,692
)
—
Total revenues excluding the impact of adjustments noted above
$
417,766
413,501
410,372
1,233,027
1,143,480
Noninterest expense
$
213,233
211,641
199,253
636,601
577,952
Less: ORE expense (benefit)
33
58
(90
)
190
101
Noninterest expense excluding the impact of adjustments noted above
$
213,200
211,583
199,343
636,411
577,851
Pre-tax income
$
167,980
245,902
183,843
585,148
522,564
Provision for credit losses
26,826
31,689
27,493
77,282
43,120
Pre-tax pre-provision net revenue
194,806
277,591
211,336
662,430
565,684
Less: Adjustments noted above
9,760
(75,673
)
(307
)
(65,814
)
(55
)
Adjusted pre-tax pre-provision net revenue (12)
$
204,566
201,918
211,029
596,616
565,629
Noninterest income
$
90,797
173,839
104,805
354,165
333,803
Less: Adjustments noted above
9,727
(75,731
)
(217
)
(66,004
)
(156
)
Noninterest income excluding the impact of adjustments noted above
$
100,524
98,108
104,588
288,161
333,647
Efficiency ratio (4)
52.26
%
43.26
%
48.53
%
49.01
%
50.54
%
Adjustments noted above
(1.23
)%
7.91
%
0.05
%
2.60
%
(0.01
)%
Efficiency ratio excluding adjustments noted above (4)
51.03
%
51.17
%
48.58
%
51.61
%
50.53
%
Total average assets
$
47,266,199
45,411,961
40,464,649
45,236,425
39,300,913
Noninterest income to average assets (1)
0.76
%
1.54
%
1.03
%
1.05
%
1.14
%
Less: Adjustments noted above
0.08
%
(0.67
)%
—
%
(0.20
)%
—
%
Noninterest income (excluding adjustments noted above) to average assets (1)
0.84
%
0.87
%
1.03
%
0.85
%
1.14
%
Noninterest expense to average assets (1)
1.79
%
1.87
%
1.95
%
1.88
%
1.97
%
Adjustments as noted above
—
%
—
%
—
%
—
%
—
%
Noninterest expense (excluding adjustments noted above) to average assets (1)
1.79
%
1.87
%
1.95
%
1.88
%
1.97
%
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
2023
2023
2023
2022
2022
2022
Net income available to common shareholders
$
128,805
193,501
133,473
134,049
144,860
141,329
Investment (gains) losses on sales of securities, net
9,727
9,961
—
—
(217
)
—
Gain on sale of fixed assets as a result of sale-leaseback transaction
—
(85,692
)
—
—
—
—
ORE expense (benefit)
33
58
99
179
(90
)
86
Tax effect on adjustments noted above (16)
(2,440
)
18,918
(25
)
(47
)
80
(22
)
Net income available to common shareholders excluding adjustments noted above
$
136,125
136,746
133,547
134,181
144,633
141,393
Basic earnings per common share
$
1.69
2.55
1.76
1.77
1.91
1.87
Adjustment due to investment (gains) losses on sales of securities, net
0.13
0.13
—
—
—
—
Adjustment due to gain on sale of fixed assets as a result of sale-leaseback transaction
—
(1.13
)
—
—
—
—
Adjustment due to ORE expense (benefit)
—
—
—
—
—
—
Adjustment due to tax effect on adjustments noted above (16)
(0.03
)
0.25
—
—
—
—
Basic earnings per common share excluding adjustments noted above
$
1.79
1.80
1.76
1.77
1.91
1.87
Diluted earnings per common share
$
1.69
2.54
1.76
1.76
1.91
1.86
Adjustment due to investment (gains) losses on sales of securities, net
0.13
0.13
—
—
—
—
Adjustment due to gain on sale of fixed assets as a result of sale-leaseback transaction
—
(1.13
)
—
—
—
—
Adjustment due to ORE expense (benefit)
—
—
—
—
—
—
Adjustment due to tax effect on adjustments noted above (16)
(0.03
)
0.25
—
—
—
—
Diluted earnings per common share excluding the adjustments noted above
$
1.79
1.79
1.76
1.76
1.91
1.86
Revenue per diluted common share
$
5.35
6.43
5.28
5.27
5.40
5.14
Adjustments due to revenue-impacting items as noted above
0.13
(1.00
)
—
—
—
—
Revenue per diluted common share excluding adjustments due to revenue-impacting items as noted above
$
5.48
5.43
5.28
5.27
5.40
5.14
Book value per common share at quarter end (7)
$
73.23
73.32
71.24
69.35
67.07
66.74
Adjustment due to goodwill, core deposit and other intangible assets
(24.45
)
(24.47
)
(24.49
)
(24.61
)
(24.63
)
(24.66
)
Tangible book value per common share at quarter end (7)
$
48.78
48.85
46.75
44.74
42.44
42.08
Equity method investment (15)
Fee income from BHG, net of amortization
$
24,967
26,924
19,079
21,005
41,341
49,465
Funding cost to support investment
6,546
6,005
5,768
5,438
4,680
3,887
Pre-tax impact of BHG
18,421
20,919
13,311
15,567
36,661
45,578
Income tax expense at statutory rates (16)
4,605
5,230
3,328
4,069
9,583
11,914
Earnings attributable to BHG
$
13,816
15,689
9,983
11,498
27,078
33,664
Basic earnings per common share attributable to BHG
$
0.18
0.21
0.13
0.15
0.36
0.44
Diluted earnings per common share attributable to BHG
$
0.18
0.21
0.13
0.15
0.36
0.44
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)
Sept. 30,
2023
2022
Net income available to common shareholders
$
455,779
411,501
Investment losses on sales of securities, net
19,688
(156
)
Gain on sale of fixed assets as a result of sale-leaseback transaction
(85,692
)
—
ORE expense
190
101
Tax effect on adjustments noted above (16)
16,454
14
Net income available to common shareholders excluding adjustments noted above
$
406,419
411,460
Basic earnings per common share
$
6.00
5.43
Adjustment due to investment losses on sales of securities, net
0.26
—
Adjustment due to gain on sale of fixed assets as a result of sale-leaseback transaction
(1.13
)
—
Adjustment due to ORE expense
—
—
Adjustment due to tax effect on adjustments noted above (16)
0.22
—
Basic earnings per common share excluding adjustments noted above
$
5.35
5.43
Diluted earnings per common share
5.99
5.42
Adjustment due to investment losses on sales of securities, net
0.26
—
Adjustment due to gain on sale of fixed assets as a result of sale-leaseback transaction
(1.13
)
—
Adjustment due to ORE expense
—
—
Adjustment due to tax effect on adjustments noted above (16)
0.22
—
Diluted earnings per common share excluding the adjustments noted above
$
5.34
5.42
Revenue per diluted common share
$
17.07
15.06
Adjustments due to revenue-impacting items as noted above
(0.87
)
—
Revenue per diluted common share excluding adjustments due to revenue-impacting items noted above
$
16.20
15.06
Equity method investment (15)
Fee income from BHG, net of amortization
$
70,970
124,461
Funding cost to support investment
18,332
12,102
Pre-tax impact of BHG
52,638
112,359
Income tax expense at statutory rates (16)
13,160
29,371
Earnings attributable to BHG
$
39,478
82,988
Basic earnings per common share attributable to BHG
$
0.52
1.10
Diluted earnings per common share attributable to BHG
$
0.52
1.09
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
2023
2023
2022
2023
2022
Return on average assets (1)
1.08
%
1.71
%
1.42
%
1.35
%
1.40
%
Adjustments as noted above
0.06
%
(0.50
)%
—
%
(0.15
)%
—
%
Return on average assets excluding adjustments noted above (1)
1.14
%
1.21
%
1.42
%
1.20
%
1.40
%
Tangible assets:
Total assets
$
47,523,790
46,875,982
41,000,118
$
47,523,790
41,000,118
Less: Goodwill
(1,846,973
)
(1,846,973
)
(1,846,466
)
(1,846,973
)
(1,846,466
)
Core deposit and other intangible assets
(29,216
)
(30,981
)
(35,666
)
(29,216
)
(35,666
)
Net tangible assets
$
45,647,601
44,998,028
39,117,986
$
45,647,601
39,117,986
Tangible common equity:
Total shareholders' equity
$
5,837,641
5,843,759
5,342,112
$
5,837,641
5,342,112
Less: Preferred shareholders' equity
(217,126
)
(217,126
)
(217,126
)
(217,126
)
(217,126
)
Total common shareholders' equity
5,620,515
5,626,633
5,124,986
5,620,515
5,124,986
Less: Goodwill
(1,846,973
)
(1,846,973
)
(1,846,466
)
(1,846,973
)
(1,846,466
)
Core deposit and other intangible assets
(29,216
)
(30,981
)
(35,666
)
(29,216
)
(35,666
)
Net tangible common equity
$
3,744,326
3,748,679
3,242,854
$
3,744,326
3,242,854
Ratio of tangible common equity to tangible assets
8.20
%
8.33
%
8.29
%
8.20
%
8.29
%
Average tangible assets:
Average assets
$
47,266,199
45,411,961
40,464,649
$
45,236,425
39,300,913
Less: Average goodwill
(1,846,973
)
(1,846,973
)
(1,846,466
)
(1,846,973
)
(1,842,777
)
Average core deposit and other intangible assets
(30,367
)
(32,135
)
(36,884
)
(32,127
)
(33,837
)
Net average tangible assets
$
45,388,859
43,532,853
38,581,299
$
43,357,325
37,424,299
Return on average assets (1)
1.08
%
1.71
%
1.42
%
1.35
%
1.40
%
Adjustment due to goodwill, core deposit and other intangible assets
0.05
%
0.07
%
0.07
%
0.06
%
0.07
%
Return on average tangible assets (1)
1.13
%
1.78
%
1.49
%
1.41
%
1.47
%
Adjustments as noted above
0.06
%
(0.52
)%
—
%
(0.16
)%
—
%
Return on average tangible assets excluding adjustments noted above (1)
1.19
%
1.26
%
1.49
%
1.25
%
1.47
%
Average tangible common equity:
Average shareholders' equity
$
5,898,196
5,782,239
5,403,244
$
5,763,152
5,350,553
Less: Average preferred equity
(217,126
)
(217,126
)
(217,126
)
(217,126
)
(217,126
)
Average common equity
5,681,070
5,565,113
5,186,118
5,546,026
5,133,427
Less: Average goodwill
(1,846,973
)
(1,846,973
)
(1,846,466
)
(1,846,973
)
(1,842,777
)
Average core deposit and other intangible assets
(30,367
)
(32,135
)
(36,884
)
(32,127
)
(33,837
)
Net average tangible common equity
$
3,803,730
3,686,005
3,302,768
$
3,666,926
3,256,813
Return on average equity (1)
8.66
%
13.42
%
10.64
%
10.57
%
10.28
%
Adjustment due to average preferred shareholders' equity
0.34
%
0.53
%
0.44
%
0.42
%
0.44
%
Return on average common equity (1)
9.00
%
13.95
%
11.08
%
10.99
%
10.72
%
Adjustment due to goodwill, core deposit and other intangible assets
4.43
%
7.11
%
6.32
%
5.63
%
6.17
%
Return on average tangible common equity (1)
13.43
%
21.06
%
17.40
%
16.62
%
16.89
%
Adjustments as noted above
0.77
%
(6.18
)%
(0.03
)%
(1.80
)%
—
%
Return on average tangible common equity excluding adjustments noted above (1)
14.20
%
14.88
%
17.37
%
14.82
%
16.89
%
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 and gain on sale of fixed assets as a result of the sale-leaseback transaction.
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 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/20231017840524/en/
MEDIA CONTACT: Joe Bass, 615-743-8219 FINANCIAL CONTACT: Harold Carpenter, 615-744-3742 WEBSITE: www.pnfp.com
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