Excluding impacts of capital optimization
and balance sheet repositioning initiatives, diluted EPS of
$1.63
Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported
net income per diluted common share of $0.64 for the quarter ended
June 30, 2024, compared to net income per diluted common share of
$2.54 for the quarter ended June 30, 2023, a decrease of
approximately 74.8 percent. Net income per diluted common share was
$2.21 for the six months ended June 30, 2024, compared to $4.30 for
the six months ended June 30, 2023, a decrease of approximately
48.6 percent.
After considering the adjustments noted in the table below, net
income per diluted common share was $1.63 for the three months
ended June 30, 2024, compared to $1.80 for the three months ended
June 30, 2023, and $1.53 for the three months ended March 31, 2024,
an annualized linked-quarter growth rate of 26.1 percent. Net
income per diluted common share adjusted for the items noted in the
table below was $3.16 for the six months ended June 30, 2024,
compared to $3.55 for the six months ended June 30, 2023.
Three months ended
Six months ended
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Diluted earnings per common share
0.64
$
1.57
$
2.54
$
2.21
$
4.30
Net of tax adjustments (1):
Investment losses on sales of securities,
net
0.71
—
0.10
0.71
0.10
Gain on sale of fixed assets as a result
of sale-leaseback transaction
—
—
(0.84
)
—
(0.84
)
Recognition of mortgage servicing
asset
—
(0.12
)
—
(0.12
)
—
ORE expense (2)
—
—
—
—
—
FDIC special assessment
—
0.08
—
0.08
—
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
1.63
$
1.53
$
1.80
$
3.16
$
3.55
(1): Adjustments include tax effect
calculated using a marginal tax rate of 25.00 percent for all
periods presented.
(2): Impact of ORE expense in all periods
presented were minimal.
"It appears to us that, in the second quarter, we saw the
inflection we had anticipated,” said M. Terry Turner, Pinnacle's
President and Chief Executive Officer. "Not only did we continue to
have outsized balance sheet growth which we expect to exceed that
of peers, but we also had net interest margin expansion and ongoing
double-digit growth in most of our fee businesses. Total revenues
were $366.6 million during the second quarter of 2024 compared to
$428.1 million last quarter. Excluding the adjustments noted above,
total revenues increased $22.3 million, or 5.3 percent, to $438.7
million for the second quarter compared to $416.3 million in the
first quarter.
"Also, during the second quarter, we executed several
initiatives with the objective of capital optimization and balance
sheet repositioning that were both a priority for our firm going
into 2024. We accomplished these objectives while increasing both
our tangible common equity and tier 1 common equity ratios at the
end of the second quarter and achieving an earnback period on the
balance sheet repositioning of less than three years.
"I believe the various initiatives that have been undertaken in
order to achieve sound growth, even in this more difficult
operating environment, continue to differentiate our firm in terms
of earnings trajectory. Our effort to increase our deposit base by
expanding into various deposit verticals is progressing well, now
reporting approximately $1.0 billion in net deposit growth in these
verticals through the first half of 2024. Additionally, our
strategic expansion into new markets and our ability to attract
"best in class" revenue producers continue to fuel outsized growth.
Loan growth attributable to these new markets for the first half of
2024 amounted to approximately 73 percent of our aggregate loan
growth this year. Our latest expansion into Jacksonville is also
advancing rapidly in terms of hiring revenue producers and moving
client relationships, with that market reporting $20.1 million in
loans, $28.8 million in deposits and $614.6 million in wealth
management assets, all amassed within just the last three months.
System-wide, our robust hiring continues, as we have added 89 new
revenue producers thus far this year, 18 of which are in
Jacksonville. Our hiring pipelines remain very robust heading into
the second half of 2024.
"With the initiatives we accomplished in the second quarter, as
well as our continued outlook for outsized loan and deposit growth,
we enter the second half of 2024 with great optimism."
BALANCE SHEET GROWTH AND LIQUIDITY:
Total assets at June 30, 2024, were $49.4 billion, an increase
of approximately $472.8 million from March 31, 2024, and $2.5
billion from June 30, 2023, reflecting a linked-quarter annualized
increase of 3.9 percent and a year-over-year increase of 5.3
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)
June 30, 2024
March 31, 2024
June 30, 2023
Loans
$
33,769,150
33,162,873
7.3%
$
31,153,290
8.4%
Securities
7,882,891
7,371,847
27.7%
6,623,457
19.0%
Other interest-earning assets
2,433,910
3,195,211
(95.3)%
4,001,844
(39.2)%
Total interest-earning assets
$
44,085,951
$
43,729,931
3.3%
$
41,778,591
5.5%
Core deposits:
Noninterest-bearing deposits
$
7,932,882
$
7,958,739
(1.3)%
$
8,436,799
(6.0)%
Interest-bearing core deposits(1)
27,024,945
26,679,871
5.2%
24,343,968
11.0%
Noncore deposits and other funding(2)
7,569,703
7,506,409
3.4%
7,731,082
(2.1)%
Total funding
$
42,527,530
$
42,145,019
3.6%
$
40,511,849
5.0%
(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.
- During the second quarter of 2024, the commercial and
industrial and owner-occupied commercial real estate loan
portfolios grew linked-quarter annualized 14.6 percent and 17.0
percent, respectively, while the non-owner occupied commercial real
estate portfolio, which consists primarily of commercial real
estate investment, multifamily and construction and development
loans decreased linked-quarter annualized by 2.6 percent. The firm
continues to pursue reduced levels of commercial real estate loans
by significantly limiting growth in these loan segments until
certain benchmarks are achieved. At June 30, 2024, the firm’s
non-owner occupied commercial real estate, multifamily and
construction and development loans to total risk-based capital
ratio fell to 254.0 percent while our construction and land
development loans to total risk-based capital ratio decreased to
72.9 percent. Over time, the firm has targeted a non-owner occupied
commercial real estate, multifamily and construction and land
development loans to total risk-based capital ratio of less than
225 percent and construction and land development loans to total
risk-based capital ratio of less than 70 percent.
- Late in the second quarter of 2024, the firm executed various
capital optimization and balance sheet repositioning initiatives
intended to improve ongoing revenue and earnings run rates, as
follows:
- Reposition the firm’s securities portfolio with the goal of
meaningfully enhancing its future performance - In doing so, the
firm incurred losses in the second quarter related to the sale of
approximately $894.8 million of available-for-sale securities at a
net loss of $72.1 million and the termination of an agreement to
resell for $500.0 million of securities that the firm had
previously purchased (the resell agreement). The termination of the
resell agreement required termination fees to be paid to the
counterparty of approximately $27.6 million, which has been
recognized in noninterest expense during the second quarter. The
proceeds from the sale of the $894.8 million in available-for-sale
securities and the $500.0 million resulting from the termination of
the resell agreement have been reinvested such that the yield
increase on the new securities acquired approximates 3.1 percent
over the prior weighted average yields of the sold securities and
the terminated resell agreement.
- Offset the negative capital impact of the second quarter losses
from the execution of the balance sheet repositioning initiatives -
The firm executed a credit default swap arrangement (CDS) with a
notional amount of $86.5 million with a counterparty which equals 5
percent of a reference pool of $1.73 billion of 1-4 family first
lien mortgage loans whereby the counterparty will assume the
first-loss position for these loans up to approximately $86.5
million in aggregate losses. The firm will pay to the counterparty
an annual loss protection fee equal to 7.95 percent of the
corresponding notional amount of the CDS, for as long as the loans
in the reference pool remain outstanding. The notional amount of
the CDS will decline over time as the loans in the reference
portfolio are paid down, mature or the investor absorbs the first
loss portion of any loan losses on those loans. Additionally, and
in accordance with regulatory guidelines, the firm has implemented
enhanced control processes with respect to certain other commercial
loans which permits recharacterization of these loans in order to
reduce the risk weights assigned to these loans. As a result, the
loans subject to the CDS and the loans where risk ratings were able
to be recharacterized now qualify for reduced risk weights pursuant
to risk-based capital guidelines. The benefits of these reductions
in risk weighting offset the impact to capital of the loss on the
sale of the securities and the termination of the resell agreement.
In order to accomplish the CDS and the recharacterization, the firm
incurred $850,000 of professional fees during the second quarter
which are also included in noninterest expense.
- Minimize the payback period on the losses incurred in
connection with the balance sheet restructuring transactions - The
firm anticipates that the increased revenues from the repositioning
of the firm’s investment securities portfolio, less the annual loss
protection fees associated with the CDS, will offset the loss
incurred on the sale of available-for-sale securities and the
termination of the resell agreement within a three-year time
period, which the firm believes to be a reasonable payback
period.
"Despite moving quickly toward our previously announced lower
targets for our construction and land development, non-owner
occupied commercial real estate and multifamily portfolios as a
percentage of risk-based capital, through the first six months of
2024, our loan growth approximated $1.1 billion, a 6.7 percent
annualized rate of growth," Turner said. "We are optimistic that we
should see increases in the pace of loan growth in the second half
of 2024 as we believe we will continue to take market share from
the larger franchises that currently dominate our newer
markets.
"As to deposit growth, during the second quarter, total deposits
were up approximately $368.4 million while brokered deposits
decreased by $339.7 million during the quarter. Excluding these
brokered deposits, total deposits were up $708.1 million in the
quarter which was similar to our experience in the first quarter of
2024. Importantly, we are very pleased that our noninterest bearing
deposit balances were relatively stable during the entirety of the
second quarter."
PRE-TAX, PRE-PROVISION NET REVENUE (PPNR) GROWTH:
Pre-tax, pre-provision net revenues (PPNR) for the three and six
months ended June 30, 2024, were $95.2 million and $280.9 million,
respectively, a decrease of 65.7 and 39.9 percent, respectively,
from the $277.6 million and $467.6 million recognized in the three
and six months ended June 30, 2023, respectively.
Three months ended
Six months ended
June 30,
June 30,
(dollars in thousands)
2024
2023
% change
2024
2023
% change
Revenues:
Net interest income
$
332,262
$
315,393
5.3
%
$
650,296
$
627,624
3.6
%
Noninterest income
34,288
173,839
(80.3
)%
144,391
263,368
(45.2
)%
Total revenues
366,550
489,232
(25.1
)%
794,687
890,992
(10.8
)%
Noninterest expense
271,389
211,641
28.2
%
513,754
423,368
21.3
%
Pre-tax, pre-provision net revenue
(PPNR)
95,161
277,591
(65.7
)%
280,933
467,624
(39.9
)%
Adjustments:
Investment losses on sales of securities,
net
72,103
9,961
>100%
72,103
9,961
>100%
Gain on the sale of fixed assets as a
result of sale leaseback
—
(85,692
)
(100.0
)%
—
(85,692
)
(100.0
)%
Recognition of mortgage servicing
asset
—
—
NA
(11,812
)
—
100.0
%
ORE expense
22
58
(62.1
)%
106
157
(32.5
)%
FDIC special assessment
—
—
NA
7,250
—
NA
Fees related to terminating agreement to
resell securities previously purchased and professional fees
associated with capital optimization initiatives
28,400
—
100.0
%
28,400
—
100.0
%
Adjusted PPNR
$
195,686
$
201,918
(3.1
)%
$
376,980
$
392,050
(3.8
)%
Three months ended
Six months ended
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Net interest margin
3.14 %
3.04 %
3.20 %
3.09 %
3.30 %
Efficiency ratio
74.04 %
56.61 %
43.26 %
64.65 %
47.52 %
Return on average assets
0.41 %
1.00 %
1.71 %
0.70 %
1.49 %
Return on average tangible common equity
(TCE)
4.90 %
12.11 %
21.06 %
8.48 %
18.33 %
Average loan to deposit ratio
84.95 %
84.73 %
84.94 %
84.84 %
84.47 %
- Net interest income for the second quarter of 2024 was $332.3
million, compared to $318.0 million for the first quarter of 2024
and $315.4 million for the second quarter of 2023, a year-over-year
growth rate of 5.3 percent. Net interest margin was 3.14 percent
for the second quarter of 2024, compared to 3.04 percent for the
first quarter of 2024 and 3.20 percent for the second quarter of
2023.
Noninterest income for the second quarter of 2024 was $34.3
million compared to $110.1 million for the first quarter of 2024
and $173.8 million for the second quarter of 2023.
Three months ended
Linked-quarter Annualized %
Change
Three months ended
Yr-over-Yr
% Change
(dollars in thousands)
June 30, 2024
March 31, 2024
June 30, 2023
Noninterest income
$
34,288
$
110,103
>(100.0%)
$
173,839
(80.3
)%
Less:
Investment losses on sales of securities,
net
72,103
—
100.0
%
9,961
>100%
Gain on the sale of fixed assets as a
result of sale leaseback
—
—
—
%
(85,692
)
(100.0
)%
Recognition of mortgage servicing
asset
—
(11,812
)
(100.0
)%
—
—
%
Adjusted noninterest income
$
106,391
$
98,291
33.0
%
$
98,108
8.4
%
- Wealth management revenues, which include investment, trust and
insurance services, were $27.8 million for the second quarter of
2024, compared to $26.0 million for the first quarter of 2024 and
$24.1 million for the second quarter of 2023, a year-over-year
increase of 15.4 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.
- During the second quarter of 2024, net gains from mortgage
loans sold were $3.3 million, compared to $2.9 million in the first
quarter of 2024 and $1.6 million in the second quarter of 2023.
Similar to wealth management, the increase in mortgage fee income
was primarily attributable to increases in capacity with more
originators in Pinnacle's newer strategic market expansions.
- Income from the firm's investment in Banker's Healthcare Group
(BHG) was $18.7 million for the second quarter of 2024, compared to
$16.0 million for the first quarter of 2024 and $26.9 million for
the second quarter of 2023, a year-over-year decline of 30.6
percent.
- BHG's loan originations increased to $871 million in the second
quarter of 2024, compared to $692 million in the first quarter of
2024 and $1.1 billion in the second quarter of 2023.
- Loans sold to BHG's community bank partners were approximately
$467 million in the second quarter of 2024, compared to
approximately $533 million in the first quarter of 2024 and $523
million in the second quarter of 2023.
- BHG reserves for on-balance sheet loan losses were $271
million, or 9.9 percent of loans held for investment at June 30,
2024, compared to 10.3 percent at March 31, 2024 and 6.0 percent at
June 30, 2023. The year-over-year increase in reserves as a
percentage of loans held for investment was impacted by BHG's
adoption of lifetime credit losses associated with its
implementation of the current expected credit loss (CECL)
methodology on Oct. 1, 2023.
- BHG increased its accrual for estimated losses attributable to
loan substitutions and prepayments to $415 million, or 5.9 percent
of the unpaid loan balances that were previously purchased by BHG's
community bank network, at June 30, 2024, compared to $391 million,
or 5.7 percent, at March 31, 2024 and $369 million, or 5.9 percent,
at June 30, 2023.
- Other noninterest income was $41.8 million for the quarter
ended June 30, 2024, a decline of $9.9 million between the second
quarter of 2024 and the first quarter of 2024 and an increase of
$8.4 million from the second quarter of 2023. Positively impacting
other noninterest income in the first quarter of 2024 was
approximately $11.8 million associated with the recognition of the
Freddie Mac Small Business Lending mortgage servicing asset.
Noninterest expense for the second quarter of 2024 was $271.4
million compared to $242.4 million for the first quarter of 2024
and $211.6 million for the second quarter of 2023.
Three months ended
Linked-quarter Annualized %
Change
Three months ended
Yr-over-Yr
% Change
(dollars in thousands)
June 30, 2024
March 31, 2024
June 30, 2023
Noninterest expense
$
271,389
$
242,365
47.9
%
$
211,641
28.2
%
Less:
ORE expense
22
84
NM
58
(62.1
)%
FDIC special assessment
—
7,250
(100.0
)%
—
—
%
Fees related to terminating agreement to
resell securities previously purchased and professional fees
associated with capital optimization initiatives
28,400
—
100.0
%
—
100.0
%
Adjusted noninterest expense
$
242,967
$
235,031
13.5
%
$
211,583
14.8
%
- Salaries and employee benefits were $150.1 million in the
second quarter of 2024, compared to $146.0 million in the first
quarter of 2024 and $132.4 million in the second quarter of 2023,
reflecting a year-over-year increase of 13.3 percent.
- Full-time equivalent associates increased to 3,469.0 at June
30, 2024 from 3,386.5 at March 31, 2024 and 3,309.0 at June 30,
2023, a year-over-year increase of 4.8 percent.
- Cash and equity incentive costs in the second quarter of 2024
were approximately $4.3 million higher than the first quarter of
2024 and $4.8 million higher than the amounts recorded in the
second quarter of 2023.
- Equipment and occupancy costs were $41.0 million in the second
quarter of 2024, compared to $39.6 million in the first quarter of
2024, reflecting an increase of 3.5 percent, and $33.7 million in
the second quarter of 2023, reflecting a year-over-year increase of
21.7 percent. Comparing the second quarter of 2024 to the second
quarter of 2023, several factors contributed to the increase of
equipment and occupancy costs, including new equipment and
facilities, rent escalators on various properties and the
previously disclosed sale-leaseback transaction executed in the
second quarter of 2023.
- Noninterest expense categories, other than those specifically
noted above, were $80.2 million in the second quarter of 2024,
compared to $56.7 million in the first quarter of 2024, reflecting
an increase of 41.5 percent, and $45.5 million in the second
quarter of 2023, reflecting a year-over-year increase of 76.4
percent. Primarily impacting the quarterly changes in other
noninterest expense between the first and second quarters of 2024
was the impact of the $28.4 million in fees paid to terminate the
resell agreement and professional fees incurred in connection with
the capital optimization initiatives described elsewhere in this
release.
"During the second quarter, while our net interest margin
expanded to 3.14 percent, we anticipate continued margin expansion
for the remainder of 2024," said Harold R. Carpenter, Pinnacle's
Chief Financial Officer. "Second quarter net interest margin
expansion was the direct result of an intense focus on obtaining
appropriate pricing on new and renewing loans, stability of our
noninterest bearing deposit balances, and our relationship managers
working extremely hard to keep our deposit pricing well contained
during the quarter.
"We are very excited about our core fee performance during the
second quarter. Second quarter fee growth in nearly every core fee
category, including, but not limited to service charges, wealth
management and mortgage, exceeded double-digit growth in comparison
to the second quarter of 2023. BHG also had another strong quarter
as their contribution was up approximately $2.7 million from the
first quarter. At this time, we are anticipating the quarterly run
rate for BHG's contribution to be fairly consistent with their
second quarter contribution for the remainder of 2024.
"Our expense results for the second quarter are generally
consistent with where we thought we would be excluding the costs of
the balance sheet restructuring and capital optimization
initiatives. That said, we are seeing strong hiring across our
franchise, particularly in our newer markets and, in most cases,
more favorable results than we anticipated. Given our outlook for
the remainder of the year, we are increasing our accrual for annual
cash incentive plan payouts to approximately 85 percent of target
level payouts as of the end of the second quarter."
CAPITAL, SOUNDNESS AND TAXES:
As of
June 30, 2024
December 31, 2023
June 30, 2023
Shareholders' equity to total assets
12.5
%
12.6
%
12.5
%
Tangible common equity to tangible
assets
8.6
%
8.6
%
8.3
%
Book value per common share
$
77.15
$
75.80
$
73.32
Tangible book value per common share
$
52.92
$
51.38
$
48.85
Annualized net loan charge-offs to avg.
loans (1)
0.27
%
0.17
%
0.13
%
Nonperforming assets to total loans, ORE
and other nonperforming assets (NPAs)
0.30
%
0.27
%
0.15
%
Classified asset ratio (Pinnacle Bank)
(2)
3.99
%
5.22
%
3.32
%
Construction and land development loans as
a percentage of total capital (3)
72.90
%
84.20
%
84.50
%
Construction and land development,
non-owner occupied commercial real estate and multi-family loans as
a percentage of total capital (3)
254.00
%
259.00
%
256.70
%
Allowance for credit losses (ACL) to total
loans
1.13
%
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 second quarter of 2024
were 0.27 percent, compared to 0.20 percent in the prior quarter,"
Carpenter said. "Net charge-offs increased in the second quarter
primarily due to the continued deterioration of the value of the
underlying collateral of an owner-occupied commercial real estate
loan. In light of these matters, our special assets officers
determined it was time to exit the borrower. This resulted in a
charge-off of $10.3 million which was recognized in the second
quarter. Most of our other key asset quality metrics continue to be
better than longer-term historical levels as we experienced a
decrease in nonperforming loans in relation to total loans at June
30, 2024 and experienced overall improvement in past dues,
classified assets and potential problem loans ratios.
"Our effective tax rate for the first six months of 2024 was
18.1 percent. Excluding adjustments noted above and other tax
benefits, the effective tax rate would have approximated 19.6
percent for the first six months of 2024, which is consistent with
our historical run rates.
"Also, we are reporting an increase in book value per common
share during the quarter from $76.23 to $77.15, an annualized
linked-quarter increase of 4.8 percent and an increase in tangible
book value per common share from $51.98 at March 31, 2024 to $52.92
at June 30, 2024, an annualized linked-quarter increase of 7.2
percent. Additionally, even after considering the securities
losses, termination fees associated with terminating the resell
agreement and transaction expenses associated with the capital
optimization initiatives, the firm's common equity Tier one
risk-based capital ratio increased from 10.4 percent at March 31,
2024 to 10.7 percent at June 30, 2024 which we also consider a
great accomplishment."
BOARD OF DIRECTORS DECLARES DIVIDENDS
On July 16, 2024, Pinnacle Financial's Board of Directors
approved a quarterly cash dividend of $0.22 per common share to be
paid on Aug. 30, 2024 to common shareholders of record as of the
close of business on Aug. 2, 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 Sept. 1, 2024 to shareholders of record
at the close of business on Aug. 17, 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 July 17, 2024, to discuss second 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, 2023
deposit data from the FDIC. Pinnacle is No. 11 on the 2024 list of
100 Best Companies to Work For® in the U.S., its eighth consecutive
appearance and was recognized by American Banker as one of
America's Best Banks to Work For 11 years in a row and No. 1 among
banks with more than $10 billion in assets in 2023.
Pinnacle Bank owns a 49 percent interest in Bankers Healthcare
Group (BHG), which provides innovative, hassle-free financial
solutions to healthcare practitioners and other professionals.
Great Place to Work and FORTUNE ranked BHG No. 4 on its 2021 list
of Best Workplaces in New York State in the small/medium business
category.
The firm began operations in a single location in downtown
Nashville, TN in October 2000 and has since grown to approximately
$49.4 billion in assets as of June 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 rising deposit and other funding costs; (x) the results of
regulatory examinations of Pinnacle Financial, Pinnacle Bank or
BHG, or companies with whom they do business; (xi) BHG's ability to
profitably grow its business and successfully execute on its
business plans; (xii) risks of expansion into new geographic or
product markets; (xiii) any matter that would cause Pinnacle
Financial to conclude that there was impairment of any asset,
including goodwill or other intangible assets; (xiv) the
ineffectiveness of Pinnacle Bank's hedging strategies, or the
unexpected counterparty failure or hedge failure of the underlying
hedges; (xv) reduced ability to attract additional financial
advisors (or failure of such advisors to cause their clients to
switch to Pinnacle Bank), to retain financial advisors (including
as a result of the competitive environment for associates) or
otherwise to attract customers from other financial institutions;
(xvi) deterioration in the valuation of other real estate owned and
increased expenses associated therewith; (xvii) inability to comply
with regulatory capital requirements, including those resulting
from changes to capital calculation methodologies, required capital
maintenance levels or regulatory requests or directives,
particularly if Pinnacle Bank's level of applicable commercial real
estate loans were to exceed percentage levels of total capital in
guidelines recommended by its regulators; (xviii) approval of the
declaration of any dividend by Pinnacle Financial's board of
directors; (xix) the vulnerability of Pinnacle Bank's network and
online banking portals, and the systems of parties with whom
Pinnacle Bank contracts, to unauthorized access, computer viruses,
phishing schemes, spam attacks, human error, natural disasters,
power loss and other security breaches; (xx) the possibility of
increased compliance and operational costs as a result of increased
regulatory oversight (including by the Consumer Financial
Protection Bureau), including oversight of companies in which
Pinnacle Financial or Pinnacle Bank have significant investments,
like BHG, and the development of additional banking products for
Pinnacle Bank's corporate and consumer clients; (xxi) Pinnacle
Financial's ability to identify potential candidates for,
consummate, and achieve synergies from, potential future
acquisitions; (xxii) difficulties and delays in integrating
acquired businesses or fully realizing costs savings and other
benefits from acquisitions; (xxiii) the risks associated with
Pinnacle Bank being a minority investor in BHG, including the risk
that the owners of a majority of the equity interests in BHG decide
to sell the company or all or a portion of their ownership
interests in BHG (triggering a similar sale by Pinnacle Bank);
(xxiv) changes in state and federal legislation, regulations or
policies applicable to banks and other financial service providers,
like BHG, including regulatory or legislative developments; (xxv)
fluctuations in the valuations of Pinnacle Financial's equity
investments and the ultimate success of such investments; (xxvi)
the availability of and access to capital; (xxvii) adverse results
(including costs, fines, reputational harm, inability to obtain
necessary approvals and/or other negative effects) from current or
future litigation, regulatory examinations or other legal and/or
regulatory actions involving Pinnacle Financial, Pinnacle Bank or
BHG; and (xxviii) general competitive, economic, political and
market conditions. Additional factors which could affect the
forward looking statements can be found in Pinnacle Financial's
Annual Report on Form 10-K for the year ended December 31, 2023,
and subsequently filed Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K filed with the SEC and available on the SEC's
website at http://www.sec.gov. Pinnacle Financial disclaims any
obligation to update or revise any forward-looking statements
contained in this press release, which speak only as of the date
hereof, whether as a result of new information, future events or
otherwise.
Non-GAAP Financial Matters
This release contains certain non-GAAP financial measures,
including, without limitation, total revenues, net income to common
shareholders, earnings per diluted common share, revenue per
diluted common share, PPNR, efficiency ratio, noninterest expense,
noninterest income and the ratio of noninterest expense to average
assets, excluding in certain instances the impact of expenses
related to other real estate owned, gains or losses on sale of
investment securities, gains associated with the sale-leaseback
transaction completed in the second quarter of 2023, losses on the
restructuring of certain 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 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)
June 30, 2024
December 31, 2023
June 30, 2023
ASSETS
Cash and noninterest-bearing due from
banks
$
219,110
$
228,620
$
447,216
Restricted cash
50,924
86,873
22,567
Interest-bearing due from banks
2,107,883
1,914,856
3,363,348
Cash and cash equivalents
2,377,917
2,230,349
3,833,131
Securities purchased with agreement to
resell
71,903
558,009
507,235
Securities available-for-sale, at fair
value
4,908,967
4,317,530
3,591,280
Securities held-to-maturity (fair value of
$2.7 billion, $2.8 billion, and $2.7 billion, net of allowance for
credit losses of $1.7 million, $1.7 million, and $1.7 million at
June 30, 2024, Dec. 31, 2023, and June 30, 2023, respectively)
2,973,924
3,006,357
3,032,177
Consumer loans held-for-sale
187,154
104,217
85,981
Commercial loans held-for-sale
16,046
9,280
22,713
Loans
33,769,150
32,676,091
31,153,290
Less allowance for credit losses
(381,601
)
(353,055
)
(337,459
)
Loans, net
33,387,549
32,323,036
30,815,831
Premises and equipment, net
282,775
256,877
244,853
Equity method investment
433,073
445,223
461,596
Accrued interest receivable
220,232
217,491
164,854
Goodwill
1,846,973
1,846,973
1,846,973
Core deposits and other intangible
assets
24,313
27,465
30,981
Other real estate owned
2,636
3,937
2,555
Other assets
2,633,507
2,613,139
2,235,822
Total assets
$
49,366,969
$
47,959,883
$
46,875,982
LIABILITIES AND SHAREHOLDERS'
EQUITY
Deposits:
Noninterest-bearing
$
7,932,882
$
7,906,502
$
8,436,799
Interest-bearing
12,600,723
11,365,349
10,433,361
Savings and money market accounts
14,437,407
14,427,206
13,645,849
Time
4,799,368
4,840,753
5,206,652
Total deposits
39,770,380
38,539,810
37,722,661
Securities sold under agreements to
repurchase
220,885
209,489
163,774
Federal Home Loan Bank advances
2,110,885
2,138,169
2,200,917
Subordinated debt and other borrowings
425,380
424,938
424,497
Accrued interest payable
58,881
66,967
53,854
Other liabilities
605,890
544,722
466,520
Total liabilities
43,192,301
41,924,095
41,032,223
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 June 30, 2024, Dec. 31, 2023, and June
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 76.7
million shares issued and outstanding at June 30, 2024, Dec. 31,
2023, and June 30, 2023, respectively
77,217
76,767
76,740
Additional paid-in capital
3,110,993
3,109,493
3,087,967
Retained earnings
2,919,923
2,784,927
2,634,315
Accumulated other comprehensive loss, net
of taxes
(150,591
)
(152,525
)
(172,389
)
Total shareholders' equity
6,174,668
6,035,788
5,843,759
Total liabilities and shareholders'
equity
$
49,366,969
$
47,959,883
$
46,875,982
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
Six months ended
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Interest income:
Loans, including fees
$
551,659
$
541,199
$
478,896
$
1,092,858
$
910,798
Securities
Taxable
51,578
44,470
31,967
96,048
61,325
Tax-exempt
24,372
24,600
24,603
48,972
48,405
Federal funds sold and other
40,781
40,214
39,773
80,995
60,750
Total interest income
668,390
650,483
575,239
1,318,873
1,081,278
Interest expense:
Deposits
304,449
300,968
228,668
605,417
405,257
Securities sold under agreements to
repurchase
1,316
1,399
783
2,715
1,378
FHLB advances and other borrowings
30,363
30,082
30,395
60,445
47,019
Total interest expense
336,128
332,449
259,846
668,577
453,654
Net interest income
332,262
318,034
315,393
650,296
627,624
Provision for credit losses
30,159
34,497
31,689
64,656
50,456
Net interest income after provision for
credit losses
302,103
283,537
283,704
585,640
577,168
Noninterest income:
Service charges on deposit accounts
14,563
13,439
12,180
28,002
23,898
Investment services
15,720
14,751
14,174
30,471
25,769
Insurance sales commissions
3,715
3,852
3,252
7,567
7,716
Gains on mortgage loans sold, net
3,270
2,879
1,567
6,149
3,620
Investment losses on sales, net
(72,103
)
—
(9,961
)
(72,103
)
(9,961
)
Trust fees
8,323
7,415
6,627
15,738
13,056
Income from equity method investment
18,688
16,035
26,924
34,723
46,003
Gain on sale of fixed assets
325
58
85,724
383
85,859
Other noninterest income
41,787
51,674
33,352
93,461
67,408
Total noninterest income
34,288
110,103
173,839
144,391
263,368
Noninterest expense:
Salaries and employee benefits
150,117
146,010
132,443
296,127
268,151
Equipment and occupancy
41,036
39,646
33,706
80,682
64,059
Other real estate, net
22
84
58
106
157
Marketing and other business
development
6,776
6,125
5,664
12,901
11,606
Postage and supplies
3,135
2,771
2,863
5,906
5,682
Amortization of intangibles
1,568
1,584
1,780
3,152
3,574
Other noninterest expense
68,735
46,145
35,127
114,880
70,139
Total noninterest expense
271,389
242,365
211,641
513,754
423,368
Income before income taxes
65,002
151,275
245,902
216,277
417,168
Income tax expense
11,840
27,331
48,603
39,171
82,598
Net income
53,162
123,944
197,299
177,106
334,570
Preferred stock dividends
(3,798
)
(3,798
)
(3,798
)
(7,596
)
(7,596
)
Net income available to common
shareholders
$
49,364
$
120,146
$
193,501
$
169,510
$
326,974
Per share information:
Basic net income per common share
$
0.65
$
1.58
$
2.55
$
2.22
$
4.30
Diluted net income per common share
$
0.64
$
1.57
$
2.54
$
2.21
$
4.30
Weighted average common shares
outstanding:
Basic
76,506,121
76,278,453
76,030,081
76,392,287
75,975,982
Diluted
76,644,227
76,428,885
76,090,321
76,531,419
76,061,883
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 ($33.76 per
share)
—
—
—
—
(7,596
)
—
(7,596
)
Common dividends paid ($0.44 per
share)
—
—
—
—
(34,365
)
(34,365
)
Issuance of restricted common shares, net
of forfeitures
—
200
200
(200
)
—
—
—
Restricted shares withheld for taxes &
related tax benefits
—
(47
)
(47
)
(3,345
)
—
—
(3,392
)
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
—
—
—
19,452
—
—
19,452
Net income
—
—
—
—
334,570
—
334,570
Other comprehensive gain
—
—
—
—
—
18,372
18,372
Balance at June 30, 2023
$
217,126
76,740
$
76,740
$
3,087,967
$
2,634,315
$
(172,389
)
$
5,843,759
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 ($33.76 per
share)
—
—
—
—
(7,596
)
—
(7,596
)
Common dividends paid ($0.44 per
share)
—
—
—
—
(34,514
)
—
(34,514
)
Issuance of restricted common shares, net
of forfeitures
—
194
194
(194
)
—
—
—
Restricted shares withheld for taxes &
related tax benefits
—
(55
)
(55
)
(4,529
)
—
—
(4,584
)
Issuance of common stock pursuant to RSU
and PSU agreements, net of shares withheld for taxes & related
tax benefits
—
311
311
(14,739
)
—
—
(14,428
)
Compensation expense for restricted shares
& performance stock units
—
—
—
20,962
—
—
20,962
Net income
—
—
—
—
177,106
—
177,106
Other comprehensive gain
—
—
—
—
—
1,934
1,934
Balance at June 30, 2024
$
217,126
77,217
$
77,217
$
3,110,993
$
2,919,923
$
(150,591
)
$
6,174,668
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA –
UNAUDITED
(dollars in thousands)
June
March
December
September
June
March
2024
2024
2023
2023
2023
2023
Balance sheet data, at quarter
end:
Commercial and industrial loans
$
12,328,622
11,893,198
11,666,691
11,307,611
10,983,911
10,723,327
Commercial real estate - owner occupied
loans
4,217,351
4,044,973
4,044,896
3,944,616
3,845,359
3,686,796
Commercial real estate - investment
loans
5,998,326
6,138,711
5,929,595
5,957,426
5,682,652
5,556,484
Commercial real estate - multifamily and
other loans
2,185,858
1,924,931
1,605,899
1,490,184
1,488,236
1,331,249
Consumer real estate - mortgage loans
4,874,846
4,828,416
4,851,531
4,768,780
4,692,673
4,531,285
Construction and land development
loans
3,621,563
3,818,334
4,041,081
3,942,143
3,904,774
3,909,024
Consumer and other loans
542,584
514,310
536,398
532,524
555,685
559,706
Total loans
33,769,150
33,162,873
32,676,091
31,943,284
31,153,290
30,297,871
Allowance for credit losses
(381,601
)
(371,337
)
(353,055
)
(346,192
)
(337,459
)
(313,841
)
Securities
7,882,891
7,371,847
7,323,887
6,882,276
6,623,457
6,878,831
Total assets
49,366,969
48,894,196
47,959,883
47,523,790
46,875,982
45,119,587
Noninterest-bearing deposits
7,932,882
7,958,739
7,906,502
8,324,325
8,436,799
9,018,439
Total deposits
39,770,380
39,402,025
38,539,810
38,295,809
37,722,661
36,178,553
Securities sold under agreements to
repurchase
220,885
201,418
209,489
195,999
163,774
149,777
FHLB advances
2,110,885
2,116,417
2,138,169
2,110,598
2,200,917
2,166,508
Subordinated debt and other borrowings
425,380
425,159
424,938
424,718
424,497
424,276
Total shareholders' equity
6,174,668
6,103,851
6,035,788
5,837,641
5,843,759
5,684,128
Balance sheet data, quarterly
averages:
Total loans
$
33,516,804
33,041,954
32,371,506
31,529,854
30,882,205
29,633,640
Securities
7,322,588
7,307,201
6,967,488
6,801,285
6,722,247
6,765,126
Federal funds sold and other
3,268,307
3,274,062
3,615,908
4,292,956
3,350,705
2,100,757
Total earning assets
44,107,699
43,623,217
42,954,902
42,624,095
40,955,157
38,499,523
Total assets
48,754,091
48,311,260
47,668,519
47,266,199
45,411,961
42,983,854
Noninterest-bearing deposits
8,000,159
7,962,217
8,342,572
8,515,733
8,599,781
9,332,317
Total deposits
39,453,828
38,995,709
38,515,560
38,078,665
36,355,859
35,291,775
Securities sold under agreements to
repurchase
213,252
210,888
202,601
184,681
162,429
219,082
FHLB advances
2,106,786
2,214,489
2,112,809
2,132,638
2,352,045
1,130,356
Subordinated debt and other borrowings
427,256
428,281
426,999
426,855
426,712
426,564
Total shareholders' equity
6,138,722
6,082,616
5,889,075
5,898,196
5,782,239
5,605,604
Statement of operations data, for the
three months ended:
Interest income
$
668,390
650,483
644,796
627,294
575,239
506,039
Interest expense
336,128
332,449
327,544
310,052
259,846
193,808
Net interest income
332,262
318,034
317,252
317,242
315,393
312,231
Provision for credit losses
30,159
34,497
16,314
26,826
31,689
18,767
Net interest income after provision for
credit losses
302,103
283,537
300,938
290,416
283,704
293,464
Noninterest income
34,288
110,103
79,088
90,797
173,839
89,529
Noninterest expense
271,389
242,365
251,168
213,233
211,641
211,727
Income before income taxes
65,002
151,275
128,858
167,980
245,902
171,266
Income tax expense
11,840
27,331
33,879
35,377
48,603
33,995
Net income
53,162
123,944
94,979
132,603
197,299
137,271
Preferred stock dividends
(3,798
)
(3,798
)
(3,798
)
(3,798
)
(3,798
)
(3,798
)
Net income available to common
shareholders
$
49,364
120,146
91,181
128,805
193,501
133,473
Profitability and other ratios:
Return on avg. assets (1)
0.41
%
1.00
%
0.76
%
1.08
%
1.71
%
1.26
%
Return on avg. equity (1)
3.23
%
7.94
%
6.14
%
8.66
%
13.42
%
9.66
%
Return on avg. common equity (1)
3.35
%
8.24
%
6.38
%
9.00
%
13.95
%
10.05
%
Return on avg. tangible common equity
(1)
4.90
%
12.11
%
9.53
%
13.43
%
21.06
%
15.43
%
Common stock dividend payout ratio
(14)
17.29
%
12.59
%
12.26
%
11.35
%
11.04
%
12.07
%
Net interest margin (2)
3.14
%
3.04
%
3.06
%
3.06
%
3.20
%
3.40
%
Noninterest income to total revenue
(3)
9.35
%
25.72
%
19.95
%
22.25
%
35.53
%
22.28
%
Noninterest income to avg. assets (1)
0.28
%
0.92
%
0.66
%
0.76
%
1.54
%
0.84
%
Noninterest exp. to avg. assets (1)
2.24
%
2.02
%
2.09
%
1.79
%
1.87
%
2.00
%
Efficiency ratio (4)
74.04
%
56.61
%
63.37
%
52.26
%
43.26
%
52.70
%
Avg. loans to avg. deposits
84.95
%
84.73
%
84.05
%
82.80
%
84.94
%
83.97
%
Securities to total assets
15.97
%
15.08
%
15.27
%
14.48
%
14.13
%
15.25
%
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
June 30, 2024
June 30, 2023
Average Balances
Interest
Rates/ Yields
Average Balances
Interest
Rates/ Yields
Interest-earning assets
Loans (1) (2)
$
33,516,804
$
551,659
6.71
%
$
30,882,205
$
478,896
6.30
%
Securities
Taxable
4,085,859
51,578
5.08
%
3,394,507
31,967
3.78
%
Tax-exempt (2)
3,236,729
24,372
3.61
%
3,327,740
24,603
3.54
%
Interest-bearing due from banks
2,541,394
33,607
5.32
%
2,597,020
33,234
5.13
%
Resell agreements
476,435
3,641
3.07
%
509,694
3,374
2.65
%
Federal funds sold
—
—
—
%
—
—
—
%
Other
250,478
3,533
5.67
%
243,991
3,165
5.20
%
Total interest-earning assets
44,107,699
$
668,390
6.20
%
40,955,157
$
575,239
5.74
%
Nonearning assets
Intangible assets
1,872,282
1,879,108
Other nonearning assets
2,774,110
2,577,696
Total assets
$
48,754,091
$
45,411,961
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking
12,118,160
118,785
3.94
%
9,361,316
75,815
3.25
%
Savings and money market
14,659,713
134,399
3.69
%
13,684,536
110,024
3.22
%
Time
4,675,796
51,265
4.41
%
4,710,226
42,829
3.65
%
Total interest-bearing deposits
31,453,669
304,449
3.89
%
27,756,078
228,668
3.30
%
Securities sold under agreements to
repurchase
213,252
1,316
2.48
%
162,429
783
1.93
%
Federal Home Loan Bank advances
2,106,786
24,395
4.66
%
2,352,045
24,603
4.20
%
Subordinated debt and other borrowings
427,256
5,968
5.62
%
426,712
5,792
5.44
%
Total interest-bearing liabilities
34,200,963
336,128
3.95
%
30,697,264
259,846
3.40
%
Noninterest-bearing deposits
8,000,159
—
—
8,599,781
—
—
Total deposits and interest-bearing
liabilities
42,201,122
$
336,128
3.20
%
39,297,045
$
259,846
2.65
%
Other liabilities
414,247
332,677
Shareholders' equity
6,138,722
5,782,239
Total liabilities and shareholders'
equity
$
48,754,091
$
45,411,961
Net interest
income
$
332,262
$
315,393
Net interest spread (3)
2.25
%
2.35
%
Net interest margin (4)
3.14
%
3.20
%
(1) Average balances of nonperforming
loans are included in the above amounts.
(2) Yields computed on tax-exempt
instruments on a tax equivalent basis and included $11.9 million of
taxable equivalent income for the three months ended June 30, 2024
compared to $11.2 million for the three months ended June 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 June 30, 2024 would have been
3.00% compared to a net interest spread of 3.09% for the three
months ended June 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)
Six months ended
Six months ended
June 30, 2024
June 30, 2023
Average Balances
Interest
Rates/ Yields
Average Balances
Interest
Rates/ Yields
Interest-earning assets
Loans (1) (2)
$
33,279,379
$
1,092,858
6.69
%
$
30,261,372
$
910,798
6.15
%
Securities
Taxable
4,002,696
96,048
4.83
%
3,451,410
61,325
3.58
%
Tax-exempt (2)
3,312,198
48,972
3.54
%
3,292,158
48,405
3.54
%
Interest-bearing due from banks
2,509,097
66,359
5.32
%
1,998,083
49,166
4.96
%
Resell agreements
510,111
7,499
2.96
%
511,169
6,703
2.64
%
Federal funds sold
—
—
—
%
—
—
—
%
Other
251,976
7,137
5.70
%
219,932
4,881
4.48
%
Total interest-earning assets
43,865,457
$
1,318,873
6.15
%
39,734,124
$
1,081,278
5.60
%
Nonearning assets
Intangible assets
1,873,076
1,879,994
Other nonearning assets
2,794,141
2,590,548
Total assets
$
48,532,674
$
44,204,666
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking
11,842,966
231,513
3.93
%
8,581,899
128,289
3.01
%
Savings and money market
14,634,200
269,151
3.70
%
14,029,351
207,543
2.98
%
Time
4,766,414
104,753
4.42
%
4,251,481
69,425
3.29
%
Total interest-bearing deposits
31,243,580
605,417
3.90
%
26,862,731
405,257
3.04
%
Securities sold under agreements to
repurchase
212,070
2,715
2.57
%
190,599
1,378
1.46
%
Federal Home Loan Bank advances
2,160,637
48,515
4.52
%
1,744,575
35,574
4.11
%
Subordinated debt and other borrowings
427,768
11,930
5.61
%
426,638
11,445
5.41
%
Total interest-bearing liabilities
34,044,055
668,577
3.95
%
29,224,543
453,654
3.13
%
Noninterest-bearing deposits
7,981,188
—
—
8,964,026
—
—
Total deposits and interest-bearing
liabilities
42,025,243
$
668,577
3.20
%
38,188,569
$
453,654
2.40
%
Other liabilities
396,762
321,637
Shareholders' equity
6,110,669
5,694,460
Total liabilities and shareholders'
equity
$
48,532,674
$
44,204,666
Net interest
income
$
650,296
$
627,624
Net interest spread (3)
2.21
%
2.47
%
Net interest margin (4)
3.09
%
3.30
%
(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 $23.7 million of
taxable equivalent income for the six months ended June 30, 2024
compared to $22.1 million for the six months ended June 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 six months ended June 30, 2024 would have been 2.96%
compared to a net interest spread of 3.20% for the six months ended
June 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)
June
March
December
September
June
March
2024
2024
2023
2023
2023
2023
Asset quality information and
ratios:
Nonperforming assets:
Nonaccrual loans
$
97,649
108,325
82,288
42,950
44,289
36,988
ORE and other nonperforming assets
(NPAs)
2,760
2,766
4,347
3,019
3,105
7,802
Total nonperforming assets
$
100,409
111,091
86,635
45,969
47,394
44,790
Past due loans over 90 days and still
accruing interest
$
4,057
5,273
6,004
4,969
5,257
5,284
Accruing purchase credit deteriorated
loans
$
6,021
6,222
6,501
7,010
7,415
7,684
Net loan charge-offs
$
22,895
16,215
13,451
18,093
9,771
7,291
Allowance for credit losses to nonaccrual
loans
390.8
%
342.8
%
429.0
%
806.0
%
762.0
%
848.5
%
As a percentage of total loans:
Past due accruing loans over 30 days
0.16
%
0.17
%
0.23
%
0.16
%
0.14
%
0.14
%
Potential problem loans
0.18
%
0.28
%
0.39
%
0.42
%
0.32
%
0.22
%
Allowance for credit losses
1.13
%
1.12
%
1.08
%
1.08
%
1.08
%
1.04
%
Nonperforming assets to total loans, ORE
and other NPAs
0.30
%
0.33
%
0.27
%
0.14
%
0.15
%
0.15
%
Classified asset ratio (Pinnacle Bank)
(6)
4.0
%
4.9
%
5.2
%
4.6
%
3.3
%
2.7
%
Annualized net loan charge-offs to avg.
loans (5)
0.27
%
0.20
%
0.17
%
0.23
%
0.13
%
0.10
%
Interest rates and yields:
Loans
6.71
%
6.67
%
6.62
%
6.50
%
6.30
%
6.00
%
Securities
4.43
%
4.06
%
4.12
%
3.81
%
3.66
%
3.47
%
Total earning assets
6.20
%
6.11
%
6.09
%
5.95
%
5.74
%
5.45
%
Total deposits, including non-interest
bearing
3.10
%
3.10
%
3.07
%
2.92
%
2.52
%
2.03
%
Securities sold under agreements to
repurchase
2.48
%
2.67
%
2.54
%
2.30
%
1.93
%
1.10
%
FHLB advances
4.66
%
4.38
%
4.26
%
4.22
%
4.20
%
3.94
%
Subordinated debt and other borrowings
5.62
%
5.60
%
5.59
%
5.54
%
5.44
%
5.38
%
Total deposits and interest-bearing
liabilities
3.20
%
3.20
%
3.15
%
3.01
%
2.65
%
2.12
%
Capital and other ratios (6):
Pinnacle Financial ratios:
Shareholders' equity to total assets
12.5
%
12.5
%
12.6
%
12.3
%
12.5
%
12.6
%
Common equity Tier one
10.7
%
10.4
%
10.3
%
10.3
%
10.2
%
9.9
%
Tier one risk-based
11.2
%
10.9
%
10.8
%
10.9
%
10.8
%
10.5
%
Total risk-based
13.2
%
12.9
%
12.7
%
12.8
%
12.7
%
12.4
%
Leverage
9.5
%
9.5
%
9.4
%
9.4
%
9.5
%
9.6
%
Tangible common equity to tangible
assets
8.6
%
8.5
%
8.6
%
8.2
%
8.3
%
8.3
%
Pinnacle Bank ratios:
Common equity Tier one
11.5
%
11.3
%
11.1
%
11.2
%
11.1
%
10.8
%
Tier one risk-based
11.5
%
11.3
%
11.1
%
11.2
%
11.1
%
10.8
%
Total risk-based
12.5
%
12.2
%
12.0
%
12.0
%
11.9
%
11.6
%
Leverage
9.7
%
9.7
%
9.7
%
9.7
%
9.8
%
9.9
%
Construction and land development
loans
as a percentage of total capital (17)
72.9
%
77.5
%
84.2
%
83.1
%
84.5
%
88.5
%
Non-owner occupied commercial real estate
and
multi-family as a percentage of total
capital (17)
254.0
%
258.0
%
259.0
%
256.4
%
256.7
%
261.1
%
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)
June
March
December
September
June
March
2024
2024
2023
2023
2023
2023
Per share data:
Earnings per common share – basic
$
0.65
1.58
1.20
1.69
2.55
1.76
Earnings per common share - basic,
excluding non-GAAP adjustments
$
1.63
1.54
1.70
1.79
1.80
1.76
Earnings per common share – diluted
$
0.64
1.57
1.19
1.69
2.54
1.76
Earnings per common share - diluted,
excluding non-GAAP adjustments
$
1.63
1.53
1.68
1.79
1.79
1.76
Common dividends per share
$
0.22
0.22
0.22
0.22
0.22
0.22
Book value per common share at quarter end
(7)
$
77.15
76.23
75.80
73.23
73.32
71.24
Tangible book value per common share at
quarter end (7)
$
52.92
51.98
51.38
48.78
48.85
46.75
Revenue per diluted common share
$
4.78
5.60
5.16
5.35
6.43
5.28
Revenue per diluted common share,
excluding non-GAAP adjustments
$
5.72
5.45
5.25
5.48
5.43
5.28
Investor information:
Closing sales price of common stock on
last trading day of quarter
$
80.04
85.88
87.22
67.04
56.65
55.16
High closing sales price of common stock
during quarter
$
84.70
91.82
89.34
75.95
57.93
82.79
Low closing sales price of common stock
during quarter
$
74.62
79.26
60.77
56.41
46.17
52.51
Closing sales price of depositary shares
on last trading day of quarter
$
23.25
23.62
22.60
22.70
23.75
24.15
High closing sales price of depositary
shares during quarter
$
23.85
24.44
23.65
23.85
24.90
25.71
Low closing sales price of depositary
shares during quarter
$
22.93
22.71
21.00
21.54
19.95
20.77
Other information:
Residential mortgage loan sales:
Gross loans sold
$
217,080
148,576
142,556
198,247
192,948
120,146
Gross fees (8)
$
5,368
3,540
3,191
4,350
4,133
2,795
Gross fees as a percentage of loans
originated
2.47
%
2.38
%
2.24
%
2.19
%
2.14
%
2.33
%
Net gain (loss) on residential mortgage
loans sold
$
3,270
2,879
879
2,012
1,567
2,053
Investment gains (losses) on sales of
securities, net (13)
$
(72,103
)
—
14
(9,727
)
(9,961
)
—
Brokerage account assets, at quarter end
(9)
$
11,917,578
10,756,108
9,810,457
9,041,716
9,007,230
8,634,339
Trust account managed assets, at quarter
end
$
6,443,916
6,297,887
5,530,495
5,047,128
5,084,592
4,855,951
Core deposits (10)
$
34,957,827
34,638,610
33,738,917
33,606,783
32,780,767
32,054,111
Core deposits to total funding (10)
82.2
%
82.2
%
81.7
%
81.9
%
80.9
%
82.4
%
Risk-weighted assets
$
39,983,191
40,531,311
40,205,295
39,527,086
38,853,588
38,117,659
Number of offices
135
128
128
128
127
126
Total core deposits per office
$
258,947
270,614
263,585
262,553
258,116
254,398
Total assets per full-time equivalent
employee
$
14,231
14,438
14,287
14,274
14,166
13,750
Annualized revenues per full-time
equivalent employee
$
425.0
508.5
468.4
486.2
593.0
496.5
Annualized expenses per full-time
equivalent employee
$
314.6
287.8
296.8
254.1
256.5
261.7
Number of employees (full-time
equivalent)
3,469.0
3,386.5
3,357.0
3,329.5
3,309.0
3,281.5
Associate retention rate (11)
94.4
%
94.2
%
94.2
%
93.6
%
94.1
%
93.8
%
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED
QUARTERLY FINANCIAL DATA – UNAUDITED
Three months ended
Six months ended
(dollars in thousands, except per share
data)
June
March
June
June
June
2024
2024
2023
2024
2023
Net interest income
$
332,262
318,034
315,393
650,296
627,624
Noninterest income
34,288
110,103
173,839
144,391
263,368
Total revenues
366,550
428,137
489,232
794,687
890,992
Less: Investment losses (gains) on sales
of securities, net
72,103
—
9,961
72,103
9,961
Gain on sale of fixed assets as a result
of sale-leaseback transaction
—
—
(85,692
)
—
(85,692
)
Recognition of mortgage servicing
asset
—
(11,812
)
—
(11,812
)
—
Total revenues excluding the impact of
adjustments noted above
$
438,653
416,325
413,501
854,978
815,261
Noninterest expense
$
271,389
242,365
211,641
513,754
423,368
Less: ORE expense
22
84
58
106
157
FDIC special assessment
—
7,250
—
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
$
242,967
235,031
211,583
477,998
423,211
Pre-tax income
$
65,002
151,275
245,902
216,277
417,168
Provision for credit losses
30,159
34,497
31,689
64,656
50,456
Pre-tax pre-provision net revenue
95,161
185,772
277,591
280,933
467,624
Less: Adjustments noted above
100,525
(4,478
)
(75,673
)
96,047
(75,574
)
Adjusted pre-tax pre-provision net revenue
(12)
$
195,686
181,294
201,918
376,980
392,050
Noninterest income
$
34,288
110,103
173,839
144,391
263,368
Less: Adjustments noted above
72,103
(11,812
)
(75,731
)
60,291
(75,731
)
Noninterest income excluding the impact of
adjustments noted above
$
106,391
98,291
98,108
204,682
187,637
Efficiency ratio (4)
74.04
%
56.61
%
43.26
%
64.65
%
47.52
%
Adjustments noted above
(18.65
)%
(0.16
)%
7.91
%
(8.74
)%
4.39
%
Efficiency ratio excluding adjustments
noted above (4)
55.39
%
56.45
%
51.17
%
55.91
%
51.91
%
Total average assets
$
48,754,091
48,311,260
45,411,961
48,532,674
44,204,666
Noninterest income to average assets
(1)
0.28
%
0.92
%
1.54
%
0.60
%
1.20
%
Less: Adjustments noted above
0.60
%
(0.10
)%
(0.67
)%
0.25
%
(0.34
)%
Noninterest income (excluding adjustments
noted above) to average assets (1)
0.88
%
0.82
%
0.87
%
0.85
%
0.86
%
Noninterest expense to average assets
(1)
2.24
%
2.02
%
1.87
%
2.13
%
1.93
%
Adjustments as noted above
(0.24
)%
(0.06
)%
—
%
(0.15
)%
—
%
Noninterest expense (excluding adjustments
noted above) to average assets (1)
2.00
%
1.96
%
1.87
%
1.98
%
1.93
%
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)
June
March
December
September
June
March
2024
2024
2023
2023
2023
2023
Net income available to common
shareholders
$
49,364
120,146
91,181
128,805
193,501
133,473
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
22
84
125
33
58
99
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)
(25,131
)
1,120
(7,278
)
(2,440
)
18,918
(25
)
Net income available to common
shareholders excluding adjustments noted above
$
124,758
116,788
129,266
136,125
136,746
133,547
Basic earnings per common share
$
0.65
1.58
1.20
1.69
2.55
1.76
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
$
1.63
1.54
1.70
1.79
1.80
1.76
Diluted earnings per common share
$
0.64
1.57
1.19
1.69
2.54
1.76
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
$
1.63
1.53
1.68
1.79
1.80
1.76
Revenue per diluted common share
$
4.78
5.60
5.16
5.35
6.43
5.28
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
$
5.72
5.45
5.25
5.48
5.43
5.28
Book value per common share at quarter end
(7)
$
77.15
76.23
75.80
73.23
73.32
71.24
Adjustment due to goodwill, core deposit
and other intangible assets
(24.23
)
(24.25
)
(24.42
)
(24.45
)
(24.47
)
(24.49
)
Tangible book value per common share at
quarter end (7)
$
52.92
51.98
51.38
48.78
48.85
46.75
Equity method investment (15)
Fee income from BHG, net of
amortization
$
18,688
16,035
14,432
24,967
26,924
19,079
Funding cost to support investment
5,704
5,974
5,803
6,546
6,005
5,768
Pre-tax impact of BHG
12,984
10,061
8,629
18,421
20,919
13,311
Income tax expense at statutory rates
(16)
3,246
2,515
2,157
4,605
5,230
3,328
Earnings attributable to BHG
$
9,738
7,546
6,472
13,816
15,689
9,983
Basic earnings per common share
attributable to BHG
$
0.13
0.10
0.09
0.18
0.21
0.13
Diluted earnings per common share
attributable to BHG
$
0.13
0.10
0.08
0.18
0.21
0.13
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
Six months ended
(dollars in thousands, except per share
data)
June 30,
2024
2023
Net income available to common
shareholders
$
169,510
326,974
Investment losses on sales of securities,
net
72,103
9,961
Gain on sale of fixed assets as a result
of sale-leaseback transaction
—
(85,692
)
Loss on BOLI restructuring
—
—
ORE expense
106
157
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)
(24,012
)
18,894
Net income available to common
shareholders excluding adjustments noted above
$
241,545
270,294
Basic earnings per common share
$
2.22
4.30
Less:
Investment (gains) losses on sales of
securities, net
0.94
0.13
Gain on sale of fixed assets as a result
of sale-leaseback transaction
—
(1.13
)
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
)
0.25
Basic earnings per common share excluding
adjustments noted above
$
3.16
3.55
Diluted earnings per common share
2.21
4.30
Less:
Investment (gains) losses on sales of
securities, net
0.94
0.13
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
)
0.25
Diluted earnings per common share
excluding the adjustments noted above
$
3.16
3.55
Revenue per diluted common share
$
10.38
11.71
Adjustments due to revenue-impacting items
as noted above
0.79
(0.99
)
Revenue per diluted common share excluding
adjustments due to revenue-impacting items noted above
$
11.17
10.72
Equity method investment (15)
Fee income from BHG, net of
amortization
$
34,723
46,003
Funding cost to support investment
11,584
11,088
Pre-tax impact of BHG
23,139
34,915
Income tax expense at statutory rates
(16)
5,785
8,729
Earnings attributable to BHG
$
17,354
26,186
Basic earnings per common share
attributable to BHG
$
0.23
0.34
Diluted earnings per common share
attributable to BHG
$
0.23
0.34
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
Six months ended
(dollars in thousands, except per share
data)
June
March
June
June
June
2024
2024
2023
2024
2023
Return on average assets (1)
0.41
%
1.00
%
1.71
%
0.70
%
1.49
%
Adjustments as noted above
0.62
%
(0.03
)%
(0.50
)%
0.30
%
(0.26
)%
Return on average assets excluding
adjustments noted above (1)
1.03
%
0.97
%
1.21
%
1.00
%
1.23
%
Tangible assets:
Total assets
$
49,366,969
48,894,196
46,875,982
$
49,366,969
46,875,982
Less: Goodwill
(1,846,973
)
(1,846,973
)
(1,846,973
)
(1,846,973
)
(1,846,973
)
Core deposit and other intangible
assets
(24,313
)
(25,881
)
(30,981
)
(24,313
)
(30,981
)
Net tangible assets
$
47,495,683
47,021,342
44,998,028
$
47,495,683
44,998,028
Tangible common equity:
Total shareholders' equity
$
6,174,668
6,103,851
5,843,759
$
6,174,668
5,843,759
Less: Preferred shareholders' equity
(217,126
)
(217,126
)
(217,126
)
(217,126
)
(217,126
)
Total common shareholders' equity
5,957,542
5,886,725
5,626,633
5,957,542
5,626,633
Less: Goodwill
(1,846,973
)
(1,846,973
)
(1,846,973
)
(1,846,973
)
(1,846,973
)
Core deposit and other intangible
assets
(24,313
)
(25,881
)
(30,981
)
(24,313
)
(30,981
)
Net tangible common equity
$
4,086,256
4,013,871
3,748,679
$
4,086,256
3,748,679
Ratio of tangible common equity to
tangible assets
8.60
%
8.54
%
8.33
%
8.60
%
8.33
%
Average tangible assets:
Average assets
$
48,754,091
48,311,260
45,411,961
$
48,532,674
44,204,666
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
(25,309
)
(26,898
)
(32,135
)
(26,103
)
(33,021
)
Net average tangible assets
$
46,881,809
46,437,389
43,532,853
$
46,659,598
42,324,672
Return on average assets (1)
0.41
%
1.00
%
1.71
%
0.70
%
1.49
%
Adjustment due to goodwill, core deposit
and other intangible assets
0.01
%
0.04
%
0.07
%
0.03
%
0.07
%
Return on average tangible assets (1)
0.42
%
1.04
%
1.78
%
0.73
%
1.56
%
Adjustments as noted above
0.65
%
(0.03
)%
(0.52
)%
0.31
%
(0.27
)%
Return on average tangible assets
excluding adjustments noted above (1)
1.07
%
1.01
%
1.26
%
1.04
%
1.29
%
Average tangible common equity:
Average shareholders' equity
$
6,138,722
6,082,616
5,782,239
$
6,110,669
5,694,460
Less: Average preferred equity
(217,126
)
(217,126
)
(217,126
)
(217,126
)
(217,126
)
Average common equity
5,921,596
5,865,490
5,565,113
5,893,543
5,477,334
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
(25,309
)
(26,898
)
(32,135
)
(26,103
)
(33,021
)
Net average tangible common equity
$
4,049,314
3,991,619
3,686,005
$
4,020,467
3,597,340
Return on average equity (1)
3.23
%
7.94
%
13.42
%
5.58
%
11.58
%
Adjustment due to average preferred
shareholders' equity
0.12
%
0.30
%
0.53
%
0.20
%
0.46
%
Return on average common equity (1)
3.35
%
8.24
%
13.95
%
5.78
%
12.04
%
Adjustment due to goodwill, core deposit
and other intangible assets
1.55
%
3.87
%
7.11
%
2.70
%
6.29
%
Return on average tangible common equity
(1)
4.90
%
12.11
%
21.06
%
8.48
%
18.33
%
Adjustments as noted above
7.49
%
(0.34
)%
(6.18
)%
3.60
%
(3.18
)%
Return on average tangible common equity
excluding adjustments noted above (1)
12.39
%
11.77
%
14.88
%
12.08
%
15.15
%
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240716482425/en/
MEDIA CONTACT: Joe Bass, 615-743-8219 FINANCIAL
CONTACT: Harold Carpenter, 615-744-3742 WEBSITE:
www.pnfp.com
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