PNFP Reports Diluted EPS of $1.76, ROAA of 1.26% and ROATCE of 15.43% For 1Q23

1Q23 annualized linked-quarter, end-of-period loans grew 17.3%, while deposits grew 13.9%

Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.76 for the quarter ended March 31, 2023, compared to net income per diluted common share of $1.65 for the quarter ended March 31, 2022, an increase of 6.7 percent.

Paycheck Protection Program (PPP) net interest income for the three months ended March 31, 2023 and 2022 was approximately $20,000 and $10.7 million, respectively. PPP net interest income had minimal impact on diluted earnings per common share for the three months ended March 31, 2023, and a $0.10 impact to diluted earnings per common share for the three months ended March 31, 2022. Excluding the impact of PPP net interest income for the three months ended March 31, 2023 and 2022, diluted earnings per share increased by 13.5 percent from $1.55 to $1.76.

"Never before has the depth, sustainability and durability of our business model proven itself as it has over the past several weeks," said M. Terry Turner, Pinnacle's president and chief executive officer. "For community and regional banks, it was a remarkable quarter. We were all impacted by the failure of two well-known banks. There was much concern over the amount of deposit growth regional banks could sustain, if any, as a result of the anxiety created by these two banks. But, our disciplined execution and the depth of client loyalty that we have built over the last two decades enabled us not only to retain substantially all of our clients, but to grow our clients' deposits at an annualized growth rate of 9.6 percent during the first quarter, a portion of which came after the two bank failures.

"Despite the volatility impacting the banking sector, I am pleased with our operating performance during the first quarter. We added 26 revenue producers to our ranks, which was consistent with our original expectations. Our deposit growth annualized for the quarter was 13.9 percent, as several of the strategic deposit gathering initiatives that we have invested in over the last two years continued to find traction. Linked-quarter annualized loan growth was 17.3 percent, in the quarter. Our credit metrics remain strong, which we believe is a result of our practice of hiring only long-experienced lenders which leads to exceptional client selection. Our funding platform also proved impressive. Some may say this is not the right time to be a community or regional bank, but our performance during the quarter further confirms that this is the exact right time to bank with Pinnacle."

BALANCE SHEET GROWTH:

Total assets at March 31, 2023 were $45.1 billion, an increase of approximately $5.7 billion from March 31, 2022, reflecting a year-over-year increase of 14.5 percent. A further analysis of select balance sheet trends follows:

 

Balances at

Linked-Quarter

Annualized

% Change

Balances at

Year-over-Year

% Change

(dollars in thousands)

March 31,

2023

December 31,

2022

March 31,

2022

Loans

$

30,297,871

$

29,041,605

17.3

%

$

24,499,022

23.7

%

Less: PPP loans

 

6,382

 

7,967

(79.6

)%

 

157,180

(95.9

)%

Loans excluding PPP loans

 

30,291,489

 

29,033,638

17.3

%

 

24,341,842

24.4

%

Securities and other interest-earning assets

 

10,080,769

 

8,123,259

96.4

%

 

10,704,157

(5.8

)%

Total interest-earning assets excluding PPP loans

$

40,372,258

$

37,156,897

34.6

%

$

35,045,999

15.2

%

 

 

 

 

 

 

Core deposits:

 

 

 

 

 

Noninterest-bearing deposits

$

9,018,439

$

9,812,744

(32.4

)%

$

10,986,194

(17.9

)%

Interest-bearing core deposits(1)

 

23,035,672

 

21,488,333

28.8

%

 

19,412,489

18.7

%

Noncore deposits and other funding(2)

 

6,865,003

 

4,743,562

178.9

%

 

3,428,850

100.2

%

Total funding

$

38,919,114

$

36,044,639

31.9

%

$

33,827,533

15.1

%

(1):

Interest-bearing core deposits are interest-bearing deposits, money market accounts, time deposits less than $250,000 and reciprocating time and money market deposits issued through the IntraFi Network.

(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.

"We are pleased to report that end-of-period loans grew by $1.3 billion over last quarter and even more pleased that end-of-period deposits grew by $1.2 billion over the same period," Turner said. "We continue to experience a shift in the mix of our deposit book and our funding costs continued to increase, which is unsurprising given the interest rate environment and the events of the last few weeks of the quarter. We believe our linked-quarter loan growth for the remainder of the year is likely to moderate to some extent based on slower loan demand as a result of macroeconomic factors and the fact that we have continued to tighten the credit box, particularly as it pertains to construction and commercial real estate lending."

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

Pre-tax, pre-provision net revenues (PPNR) for the quarter ended March 31, 2023 were $190.0 million, an increase of 18.5 percent from the $160.3 million recognized in the quarter ended March 31, 2022.

 

Three months ended

 

March 31,

(dollars in thousands)

 

2023

 

2022

% change

Revenues:

 

 

 

Net interest income

$

312,231

$

239,475

30.4

%

Noninterest income

 

89,529

 

103,496

(13.5

) %

Total revenues

 

401,760

 

342,971

17.1

%

Noninterest expense

 

211,727

 

182,661

15.9

%

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

 

190,033

 

160,310

18.5

%

Adjustments:

 

 

 

Investment (gains) losses on sales of securities, net

 

 

61

NM

 

ORE expense (benefit)

 

99

 

105

NM

 

Adjusted PPNR

$

190,132

$

160,476

18.5

%

  • Revenue per fully diluted common share was $5.28 for the three months ended March 31, 2023, compared to $5.27 for the fourth quarter of 2022 and $4.52 for the first quarter of 2022, a 16.8 percent year-over-year growth rate.
  • Net interest income for the quarter ended March 31, 2023 was $312.2 million, compared to $319.5 million for the fourth quarter of 2022 and $239.5 million for the first quarter of 2022, a year-over-year growth rate of 30.4 percent.
  • Revenues from PPP loans approximated $20,000 in the first quarter of 2023, compared to $72,000 in the fourth quarter of 2022 and $10.7 million in the first quarter of 2022. At March 31, 2023, remaining unamortized fees for PPP loans were approximately $212,000.
  • Included in net interest income for the first quarter of 2023 was $852,000 of discount accretion associated with fair value adjustments, compared to $1.2 million of discount accretion recognized in the fourth quarter of 2022 and $1.7 million in the first quarter of 2022. There remains $2.5 million of purchase accounting discount accretion as of March 31, 2023.
  • Noninterest income for the quarter ended March 31, 2023 was $89.5 million, compared to $82.3 million for the fourth quarter of 2022 and $103.5 million for the first quarter of 2022, a year-over-year decline of 13.5 percent.
  • Wealth management revenues, which include investment, trust and insurance services, were $22.5 million for the first quarter of 2023, compared to $20.2 million for the fourth quarter of 2022 and $20.7 million for the first quarter of 2022, a year-over-year increase of 8.6 percent.
  • During the first quarter of 2023, mortgage loans sold resulted in a $2.1 million net gain compared to a $4.1 million net gain in the first quarter of 2022. In both periods, this is the result of the volume of mortgage loans sold during the period.
  • Income from the firm's investment in BHG was $19.1 million for the quarter ended March 31, 2023, down from $21.0 million for the quarter ended Dec. 31, 2022 and $33.7 million for the quarter ended March 31, 2022, a year-over-year decline of 43.3 percent.
  • During the first quarter of 2023, BHG increased loans held on its balance sheet by approximately $225.1 million. BHG also successfully completed its seventh securitization transaction in the first quarter of 2023 which amounted to approximately $265 million in balance sheet funding during a time when such funding was difficult to obtain. Additionally, BHG utilized approximately $90 million in loans to secure various other private funding sources during the first quarter.
  • Loans sold to BHG's community bank partners were approximately $704 million in the first quarter of 2023, the highest quarterly volume of purchases ever, compared to approximately $600 million in the fourth quarter of 2022 and $343 million in the first quarter of 2022. Loan originations decreased to $1.0 billion in the first quarter of 2023 compared to $1.1 billion in the fourth quarter of 2022. Again, originations decreased primarily due to BHG continuing to tighten its underwriting and as it sought to increase the quality of its originations.
  • BHG increased its reserves for on-balance sheet loan losses to $178 million, or 5.19 percent of loans held for investment at March 31, 2023, compared to 4.59 percent at Dec. 31, 2022. BHG also increased its accrual for losses attributable to loan substitutions and prepayments for loans previously sold through its community bank auction platform to $350 million, or 5.81 percent of the loans that have been previously sold and were unpaid, at March 31, 2023 compared to 5.66 percent at Dec. 31, 2022.
  • Other noninterest income was $34.2 million for the quarter ended March 31, 2023, compared to $30.1 million for the quarter ended Dec. 31, 2022 and $34.1 million for the quarter ended March 31, 2022, essentially flat year-over-year.
  • Noninterest expense for the quarter ended March 31, 2023 was $211.7 million, compared to $202.0 million in the fourth quarter of 2022 and $182.7 million in the first quarter of 2022, reflecting a year-over-year increase of 15.9 percent.
  • Salaries and employee benefits were $135.7 million in the first quarter of 2023, compared to $131.8 million in the fourth quarter of 2022 and $121.9 million in the first quarter of 2022, reflecting a year-over-year increase of 11.4 percent.
  • Increase in headcount contributed to the growth in salaries and employee benefits expense. Total full-time equivalent associates amounted to 3,281.5 associates at March 31, 2023, compared to 2,988.0 full-time equivalent associates at March 31, 2022, a year-over-year increase in headcount of 9.8 percent.
  • Costs related to the firm's cash and equity incentive plans were $22.5 million in the first quarter of 2023 compared to $28.5 million in the fourth quarter of 2022 and $25.9 million in the first quarter of 2022.
  • Noninterest expense categories, other than salaries and employee benefits, were $76.0 million in the first quarter of 2023, compared to $70.2 million in the fourth quarter of 2022 and $60.8 million in the first quarter of 2022, reflecting a year-over-year increase of 25.0 percent.

"Our net interest income was positively impacted by increased yields on earning assets offset by increased funding costs, resulting in a decline of $7.2 million between the first quarter of 2023 and fourth quarter of 2022," said Harold R. Carpenter, Pinnacle's chief financial officer. "Increases in fee income in the first quarter of 2023 compared to the fourth quarter of 2022 essentially offset the decrease in net interest income over that same time period. Most fee categories increased in the first quarter of 2023 as compared to the fourth quarter of 2022. The fee increase was primarily attributable to mortgage pipelines improving significantly during the quarter, the receipt of annual insurance contingency payments from carriers due to favorable claims experience and increased fees from our back-to-back interest rate swap program, which we use to facilitate derivative transactions for our clients. BHG revenues decreased $1.9 million between fourth quarter 2022 and first quarter 2023. Most of this decrease was attributable to increased reserves for probable incurred credit losses.

"Expenses increased by approximately $9.7 million linked-quarter. Salaries and employee benefits expense increased by $3.9 million linked-quarter though incentive costs were lower in the first quarter of 2023 than the last quarter of 2022 as during the quarter we accrued expense assuming a lower payout percentage would likely be achieved in 2023 than was the case in 2022 for the firm’s annual cash bonus plan and we estimated that our performance would likely lead to a reduced number of shares being earned under our various performance-based equity awards. Compensation costs increased due to increased headcount and higher benefit costs which are traditionally higher in the first quarter due to the seasonality of payroll taxes and the firm’s 401k match program. We will continue to monitor our expense burden in light of our anticipated revenue growth and adjust incentives and/or reduce other expenses through either reduced hiring, deferral of anticipated projects or implementation of other cost saving measures as required."

PROFITABILITY, LIQUIDITY AND SOUNDNESS:

 

Three months ended

 

March 31,

2023

December 31,

2022

March 31,

2022

Net interest margin

3.40

%

3.60

%

2.89

%

Efficiency ratio

52.70

%

50.29

%

53.26

%

Return on average assets

1.26

%

1.29

%

1.32

%

Return on average tangible common equity (TCE)

15.43

%

15.95

%

15.63

%

 

As of

 

March 31,

2023

December 31,

2022

March 31,

2022

Shareholders' equity to total assets

 

12.6

%

 

13.2

%

 

13.4

%

Average loan to deposit ratio

 

83.97

%

 

83.10

%

 

75.62

%

Uninsured/uncollateralized deposits to total deposits

 

33.23

%

 

38.93

%

 

41.98

%

Tangible common equity to tangible assets

 

8.3

%

 

8.5

%

 

8.5

%

Book value per common share

$

71.24

 

$

69.35

 

$

66.30

 

Tangible book value per common share

$

46.75

 

$

44.74

 

$

41.65

 

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

 

0.10

%

 

0.17

%

 

0.05

%

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

 

0.15

%

 

0.16

%

 

0.14

%

Classified asset ratio (Pinnacle Bank) (2)

 

2.70

%

 

2.40

%

 

3.60

%

Allowance for credit losses (ACL) to total loans

 

1.04

%

 

1.04

%

 

1.07

%

(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.

  • Net interest margin was 3.40 percent for the first quarter of 2023, compared to 3.60 percent for the fourth quarter of 2022 and 2.89 percent for the first quarter of 2022.
  • Provision for credit losses was $18.8 million in the first quarter of 2023, compared to $24.8 million in the fourth quarter of 2022 and $2.7 million in the first quarter of 2022. Net charge-offs were $7.3 million for the quarter ended March 31, 2023, compared to $11.7 million for the quarter ended Dec. 31, 2022 and $3.0 million for the quarter ended March 31, 2022. Annualized net loan charge-offs for the first quarter of 2023 were 0.10 percent.
  • Nonperforming assets were $44.8 million at March 31, 2023, compared to $46.1 million at Dec. 31, 2022 and $35.1 million at March 31, 2022, up 27.8 percent over the same quarter last year. The ratio of the allowance for credit losses to nonperforming loans at March 31, 2023 was 848.5 percent, compared to 788.8 percent at Dec. 31, 2022 and 982.9 percent at March 31, 2022.
  • Classified assets were $120.3 million at March 31, 2023, compared to $104.2 million at Dec. 31, 2022 and $137.0 at March 31, 2022, down 12.2 percent over the same quarter last year.

"Our net interest margin declined on a linked-quarter basis by approximately 20 basis points," Carpenter said. "In addition to increased funding costs, contributing to the reduced net interest margin was the $1.7 billion increase in on-balance sheet liquidity, which we acquired during mid-March given the uncertainty in the broader banking industry. We intend to hold elevated levels of liquidity for the next few quarters.

"We believe our liquidity metrics are as strong as they have ever been. Our wholesale funding ratios are consistent quarter to quarter. We also experienced a meaningful reduction in our uninsured deposit base, as approximately $2.1 billion in deposits were added to a reciprocal deposit insurance funding network during March. Our investment securities portfolio, including both the held-to-maturity and available-for-sale portfolios, has performed very well for us in recent months. Our AOCI loss decreased, or improved, by $44.0 million this quarter, and we think our held-to-maturity loss when considered in relation to our tangible capital ratios compared favorably to most of our peers at March 31, 2023.

"Credit metrics remain consistent with prior quarter’s results, and we continue to believe the loan portfolio remains healthy. Should a recession materialize as we believe is likely in 2023, we continue to believe we enter it from a position of strength with a great deal of confidence as to the financial health of many of our borrowers and their ability to weather what could be a more challenging economic environment."

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. CT on April 18, 2023, to discuss first 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 2022 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 $45.1 billion in assets as of March 31, 2023. As the second-largest bank holding company headquartered 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) 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; (xiii) BHG's ability to profitably grow its business and successfully execute on its business plans; (xiv) risks of expansion into new geographic or product markets; (xv) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including goodwill or other intangible assets; (xvi) the ineffectiveness of Pinnacle Bank's hedging strategies, or the unexpected counterparty failure or hedge failure of the underlying hedges; (xvii) 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; (xviii) deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xix) 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; (xx) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xxi) 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; (xxii) 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; (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 and other matters for the accounting periods presented. This release also includes non-GAAP financial measures which exclude the impact of loans originated and forgiven and repaid under the PPP. 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 SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS – UNAUDITED

 

 

 

 

(dollars in thousands, except for share and per share data)

March 31,

2023

December 31,

2022

March 31,

2022

ASSETS

 

 

 

Cash and noninterest-bearing due from banks

$

209,255

 

$

268,649

 

$

187,093

 

Restricted cash

 

13,049

 

 

31,447

 

 

29,680

 

Interest-bearing due from banks

 

2,597,172

 

 

877,286

 

 

3,103,008

 

Cash and cash equivalents

 

2,819,476

 

 

1,177,382

 

 

3,319,781

 

Securities purchased with agreement to resell

 

509,872

 

 

513,276

 

 

1,332,753

 

Securities available-for-sale, at fair value

 

3,825,203

 

 

3,558,870

 

 

3,569,723

 

Securities held-to-maturity (fair value of $2.8 billion, $2.7 billion, and $2.4 billion, net of allowance for credit losses of $1.9 million, $1.6 million, and $1.1 million at March 31, 2023, Dec. 31, 2022, and March 31, 2022, respectively)

 

3,053,628

 

 

3,079,050

 

 

2,566,386

 

Consumer loans held-for-sale

 

58,758

 

 

42,237

 

 

67,224

 

Commercial loans held-for-sale

 

23,087

 

 

21,093

 

 

35,383

 

Loans

 

30,297,871

 

 

29,041,605

 

 

24,499,022

 

Less allowance for credit losses

 

(313,841

)

 

(300,665

)

 

(261,618

)

Loans, net

 

29,984,030

 

 

28,740,940

 

 

24,237,404

 

Premises and equipment, net

 

354,713

 

 

327,885

 

 

296,779

 

Equity method investment

 

438,303

 

 

443,185

 

 

382,256

 

Accrued interest receivable

 

143,965

 

 

161,182

 

 

95,147

 

Goodwill

 

1,846,973

 

 

1,846,973

 

 

1,850,951

 

Core deposits and other intangible assets

 

32,761

 

 

34,555

 

 

31,997

 

Other real estate owned

 

7,802

 

 

7,952

 

 

8,237

 

Other assets

 

2,021,016

 

 

2,015,441

 

 

1,606,357

 

Total assets

$

45,119,587

 

$

41,970,021

 

$

39,400,378

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Deposits:

 

 

 

Noninterest-bearing

$

9,018,439

 

$

9,812,744

 

$

10,986,194

 

Interest-bearing

 

8,944,353

 

 

7,884,605

 

 

6,838,659

 

Savings and money market accounts

 

14,136,850

 

 

13,774,534

 

 

12,416,101

 

Time

 

4,078,911

 

 

3,489,355

 

 

2,054,860

 

Total deposits

 

36,178,553

 

 

34,961,238

 

 

32,295,814

 

Securities sold under agreements to repurchase

 

149,777

 

 

194,910

 

 

219,530

 

Federal Home Loan Bank advances

 

2,166,508

 

 

464,436

 

 

888,870

 

Subordinated debt and other borrowings

 

424,276

 

 

424,055

 

 

423,319

 

Accrued interest payable

 

31,728

 

 

19,478

 

 

8,575

 

Other liabilities

 

484,617

 

 

386,512

 

 

283,320

 

Total liabilities

 

39,435,459

 

 

36,450,629

 

 

34,119,428

 

Preferred stock, no par value, 10.0 million shares authorized; 225,000 shares non-cumulative perpetual preferred stock, Series B, liquidation preference $225.0 million, issued and outstanding at March 31, 2023, Dec. 31, 2022, and March 31, 2022, respectively

 

217,126

 

 

217,126

 

 

217,126

 

Common stock, par value $1.00; 180.0 million shares authorized; 76.7 million, 76.5 million and 76.4 million shares issued and outstanding at March 31, 2023, Dec. 31, 2022, and March 31, 2022, respectively

 

76,739

 

 

76,454

 

 

76,377

 

Additional paid-in capital

 

3,079,020

 

 

3,074,867

 

 

3,045,914

 

Retained earnings

 

2,458,006

 

 

2,341,706

 

 

1,972,686

 

Accumulated other comprehensive loss, net of taxes

 

(146,763

)

 

(190,761

)

 

(31,153

)

Total shareholders' equity

 

5,684,128

 

 

5,519,392

 

 

5,280,950

 

Total liabilities and shareholders' equity

$

45,119,587

 

$

41,970,021

 

$

39,400,378

 

This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED

(dollars in thousands, except for share and per share data)

Three months ended

 

March 31,

2023

December 31,

2022

March 31,

2022

Interest income:

 

 

 

Loans, including fees

$

431,902

 

$

387,328

 

$

227,047

 

Securities

 

 

 

Taxable

 

29,358

 

 

25,086

 

 

11,048

 

Tax-exempt

 

23,802

 

 

22,770

 

 

17,446

 

Federal funds sold and other

 

20,977

 

 

15,994

 

 

3,076

 

Total interest income

 

506,039

 

 

451,178

 

 

258,617

 

Interest expense:

 

 

 

Deposits

 

176,589

 

 

120,499

 

 

10,250

 

Securities sold under agreements to repurchase

 

595

 

 

474

 

 

56

 

FHLB advances and other borrowings

 

16,624

 

 

10,745

 

 

8,836

 

Total interest expense

 

193,808

 

 

131,718

 

 

19,142

 

Net interest income

 

312,231

 

 

319,460

 

 

239,475

 

Provision for credit losses

 

18,767

 

 

24,805

 

 

2,720

 

Net interest income after provision for credit losses

 

293,464

 

 

294,655

 

 

236,755

 

Noninterest income:

 

 

 

Service charges on deposit accounts

 

11,718

 

 

11,123

 

 

11,030

 

Investment services

 

11,595

 

 

11,765

 

 

10,691

 

Insurance sales commissions

 

4,464

 

 

2,668

 

 

4,036

 

Gains (losses) on mortgage loans sold, net

 

2,053

 

 

(65

)

 

4,066

 

Investment losses on sales, net

 

 

 

 

 

(61

)

Trust fees

 

6,429

 

 

5,767

 

 

5,973

 

Income from equity method investment

 

19,079

 

 

21,005

 

 

33,655

 

Other noninterest income

 

34,191

 

 

30,058

 

 

34,106

 

Total noninterest income

 

89,529

 

 

82,321

 

 

103,496

 

Noninterest expense:

 

 

 

Salaries and employee benefits

 

135,708

 

 

131,802

 

 

121,852

 

Equipment and occupancy

 

30,353

 

 

29,329

 

 

25,536

 

Other real estate, net

 

99

 

 

179

 

 

105

 

Marketing and other business development

 

5,942

 

 

7,579

 

 

3,777

 

Postage and supplies

 

2,819

 

 

2,682

 

 

2,371

 

Amortization of intangibles

 

1,794

 

 

1,937

 

 

1,871

 

Other noninterest expense

 

35,012

 

 

28,539

 

 

27,149

 

Total noninterest expense

 

211,727

 

 

202,047

 

 

182,661

 

Income before income taxes

 

171,266

 

 

174,929

 

 

157,590

 

Income tax expense

 

33,995

 

 

37,082

 

 

28,480

 

Net income

 

137,271

 

 

137,847

 

 

129,110

 

Preferred stock dividends

 

(3,798

)

 

(3,798

)

 

(3,798

)

Net income available to common shareholders

$

133,473

 

$

134,049

 

$

125,312

 

Per share information:

 

 

 

Basic net income per common share

$

1.76

 

$

1.77

 

$

1.66

 

Diluted net income per common share

$

1.76

 

$

1.76

 

$

1.65

 

Weighted average common shares outstanding:

 

 

 

Basic

 

75,921,282

 

 

75,771,828

 

 

75,654,986

 

Diluted

 

76,042,328

 

 

76,198,411

 

 

75,930,372

 

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

 

6

 

 

6

 

 

124

 

 

 

 

 

 

130

 

Preferred dividends paid ($16.88 per share)

 

 

 

 

 

 

 

(3,798

)

 

 

 

(3,798

)

Common dividends paid ($0.22 per share)

 

 

 

 

 

 

 

(16,976

)

 

 

 

(16,976

)

Issuance of restricted common shares, net of forfeitures

 

158

 

 

158

 

 

(158

)

 

 

 

 

 

 

Restricted shares withheld for taxes & related tax benefits

 

(35

)

 

(35

)

 

(3,736

)

 

 

 

 

 

(3,771

)

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

 

105

 

 

105

 

 

(5,566

)

 

 

 

 

 

(5,461

)

Compensation expense for restricted shares & performance stock units

 

 

 

 

 

9,448

 

 

 

 

 

 

9,448

 

Net income

 

 

 

 

 

 

 

129,110

 

 

 

 

129,110

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

(138,339

)

 

(138,339

)

Balance at March 31, 2022

$

217,126

76,377

 

$

76,377

 

$

3,045,914

 

$

1,972,686

 

$

(31,153

)

$

5,280,950

 

 

 

 

 

 

 

 

 

Balance at December 31, 2022

$

217,126

76,454

 

$

76,454

 

$

3,074,867

 

$

2,341,706

 

$

(190,761

)

$

5,519,392

 

Exercise of employee common stock options & related tax benefits

 

40

 

 

40

 

 

920

 

 

 

 

 

 

960

 

Preferred dividends paid ($16.88 per share)

 

 

 

 

 

 

 

(3,798

)

 

 

 

(3,798

)

Common dividends paid ($0.22 per share)

 

 

 

 

 

 

 

(17,173

)

 

 

 

(17,173

)

Issuance of restricted common shares, net of forfeitures

 

193

 

 

193

 

 

(193

)

 

 

 

 

 

 

Restricted shares withheld for taxes & related tax benefits

 

(41

)

 

(41

)

 

(3,035

)

 

 

 

 

 

(3,076

)

Issuance of common stock pursuant to 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

 

 

 

 

 

10,199

 

 

 

 

 

 

10,199

 

Net income

 

 

 

 

 

 

 

137,271

 

 

 

 

137,271

 

Other comprehensive gain

 

 

 

 

 

 

 

 

 

43,998

 

 

43,998

 

Balance at March 31, 2023

$

217,126

76,739

 

$

76,739

 

$

3,079,020

 

$

2,458,006

 

$

(146,763

)

$

5,684,128

 

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

 

 

 

 

 

 

(dollars in thousands)

March

December

September

June

March

December

2023

2022

2022

2022

2022

2021

Balance sheet data, at quarter end:

 

 

 

 

 

 

Commercial and industrial loans

$

10,716,945

 

10,233,395

 

9,738,271

 

9,244,708

 

8,213,204

 

7,703,428

 

Commercial real estate - owner occupied loans

 

3,686,796

 

3,587,257

 

3,426,271

 

3,243,018

 

3,124,275

 

3,048,822

 

Commercial real estate - investment loans

 

5,556,484

 

5,277,454

 

5,122,127

 

4,909,598

 

4,707,761

 

4,607,048

 

Commercial real estate - multifamily and other loans

 

1,331,249

 

1,265,165

 

1,042,854

 

951,998

 

718,822

 

614,656

 

Consumer real estate - mortgage loans

 

4,531,285

 

4,435,046

 

4,271,913

 

4,047,051

 

3,813,252

 

3,680,684

 

Construction and land development loans

 

3,909,024

 

3,679,498

 

3,548,970

 

3,386,866

 

3,277,029

 

2,903,017

 

Consumer and other loans

 

559,706

 

555,823

 

550,565

 

498,757

 

487,499

 

485,489

 

Paycheck protection program loans

 

6,382

 

7,967

 

10,723

 

51,100

 

157,180

 

371,118

 

Total loans

 

30,297,871

 

29,041,605

 

27,711,694

 

26,333,096

 

24,499,022

 

23,414,262

 

Allowance for credit losses

 

(313,841

)

(300,665

)

(288,088

)

(272,483

)

(261,618

)

(263,233

)

Securities

 

6,878,831

 

6,637,920

 

6,481,018

 

6,553,893

 

6,136,109

 

6,070,152

 

Total assets

 

45,119,587

 

41,970,021

 

41,000,118

 

40,121,292

 

39,400,378

 

38,469,399

 

Noninterest-bearing deposits

 

9,018,439

 

9,812,744

 

10,567,873

 

11,058,198

 

10,986,194

 

10,461,071

 

Total deposits

 

36,178,553

 

34,961,238

 

33,690,049

 

32,595,303

 

32,295,814

 

31,304,533

 

Securities sold under agreements to repurchase

 

149,777

 

194,910

 

190,554

 

199,585

 

219,530

 

152,559

 

FHLB advances

 

2,166,508

 

464,436

 

889,248

 

1,289,059

 

888,870

 

888,681

 

Subordinated debt and other borrowings

 

424,276

 

424,055

 

423,834

 

423,614

 

423,319

 

423,172

 

Total shareholders' equity

 

5,684,128

 

5,519,392

 

5,342,112

 

5,315,239

 

5,280,950

 

5,310,607

 

Balance sheet data, quarterly averages:

 

 

 

 

 

 

Total loans

$

29,633,640

 

28,402,197

 

27,021,031

 

25,397,389

 

23,848,533

 

23,225,735

 

Securities

 

6,765,126

 

6,537,262

 

6,542,026

 

6,446,774

 

6,143,664

 

5,813,636

 

Federal funds sold and other

 

2,100,757

 

1,828,588

 

2,600,978

 

2,837,679

 

4,799,946

 

4,356,113

 

Total earning assets

 

38,499,523

 

36,768,047

 

36,164,035

 

34,681,842

 

34,792,143

 

33,395,484

 

Total assets

 

42,983,854

 

41,324,251

 

40,464,649

 

38,780,786

 

38,637,221

 

37,132,078

 

Noninterest-bearing deposits

 

9,332,317

 

10,486,233

 

10,926,069

 

10,803,439

 

10,478,403

 

10,240,393

 

Total deposits

 

35,291,775

 

34,177,281

 

33,108,415

 

31,484,100

 

31,538,985

 

30,034,026

 

Securities sold under agreements to repurchase

 

219,082

 

199,610

 

215,646

 

216,846

 

179,869

 

141,781

 

FHLB advances

 

1,130,356

 

701,813

 

1,010,865

 

1,095,531

 

888,746

 

888,559

 

Subordinated debt and other borrowings

 

426,564

 

427,503

 

426,267

 

427,191

 

441,755

 

484,389

 

Total shareholders' equity

 

5,605,604

 

5,433,274

 

5,403,244

 

5,316,219

 

5,331,405

 

5,262,586

 

Statement of operations data, for the three months ended:

Interest income

$

506,039

 

451,178

 

371,764

 

292,376

 

258,617

 

259,193

 

Interest expense

 

193,808

 

131,718

 

65,980

 

27,802

 

19,142

 

20,430

 

Net interest income

 

312,231

 

319,460

 

305,784

 

264,574

 

239,475

 

238,763

 

Provision for credit losses

 

18,767

 

24,805

 

27,493

 

12,907

 

2,720

 

2,675

 

Net interest income after provision for credit losses

 

293,464

 

294,655

 

278,291

 

251,667

 

236,755

 

236,088

 

Noninterest income

 

89,529

 

82,321

 

104,805

 

125,502

 

103,496

 

100,723

 

Noninterest expense

 

211,727

 

202,047

 

199,253

 

196,038

 

182,661

 

170,417

 

Income before income taxes

 

171,266

 

174,929

 

183,843

 

181,131

 

157,590

 

166,394

 

Income tax expense

 

33,995

 

37,082

 

35,185

 

36,004

 

28,480

 

32,866

 

Net income

 

137,271

 

137,847

 

148,658

 

145,127

 

129,110

 

133,528

 

Preferred stock dividends

 

(3,798

)

(3,798

)

(3,798

)

(3,798

)

(3,798

)

(3,798

)

Net income available to common shareholders

$

133,473

 

134,049

 

144,860

 

141,329

 

125,312

 

129,730

 

Profitability and other ratios:

 

 

 

 

 

 

Return on avg. assets (1)

 

1.26

%

1.29

%

1.42

%

1.46

%

1.32

%

1.39

%

Return on avg. equity (1)

 

9.66

%

9.79

%

10.64

%

10.66

%

9.53

%

9.78

%

Return on avg. common equity (1)

 

10.05

%

10.20

%

11.08

%

11.12

%

9.94

%

10.20

%

Return on avg. tangible common equity (1)

 

15.43

%

15.95

%

17.40

%

17.62

%

15.63

%

16.13

%

Common stock dividend payout ratio (14)

 

12.07

%

12.26

%

12.34

%

12.63

%

12.94

%

10.65

%

Net interest margin (2)

 

3.40

%

3.60

%

3.47

%

3.17

%

2.89

%

2.96

%

Noninterest income to total revenue (3)

 

22.28

%

20.49

%

25.53

%

32.17

%

30.18

%

29.67

%

Noninterest income to avg. assets (1)

 

0.84

%

0.79

%

1.03

%

1.30

%

1.09

%

1.08

%

Noninterest exp. to avg. assets (1)

 

2.00

%

1.94

%

1.95

%

2.03

%

1.92

%

1.82

%

Efficiency ratio (4)

 

52.70

%

50.29

%

48.53

%

50.26

%

53.26

%

50.20

%

Avg. loans to avg. deposits

 

83.97

%

83.10

%

81.61

%

80.67

%

75.62

%

77.33

%

Securities to total assets

 

15.25

%

15.82

%

15.81

%

16.34

%

15.57

%

15.78

%

This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

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

 

 

 

 

(dollars in thousands)

Three months ended

 

Three months ended

March 31, 2023

 

March 31, 2022

 

Average Balances

Interest

Rates/ Yields

 

Average Balances

Interest

Rates/ Yields

Interest-earning assets

 

 

 

 

 

 

 

Loans (1) (2)

$

29,633,640

$

431,902

 

6.00

%

 

$

23,848,533

$

227,047

3.94

%

Securities

 

 

 

 

 

 

 

Taxable

 

3,508,946

 

29,358

 

3.39

%

 

 

3,234,641

 

11,048

1.39

%

Tax-exempt (2)

 

3,256,180

 

23,802

 

3.54

%

 

 

2,909,023

 

17,446

2.94

%

Interest-bearing due from banks

 

1,392,492

 

15,941

 

4.64

%

 

 

3,347,804

 

1,303

0.16

%

Resell agreements

 

512,660

 

3,329

 

2.63

%

 

 

1,281,746

 

1,214

0.38

%

Federal funds sold

 

 

(9

)

%

 

 

 

%

Other

 

195,605

 

1,716

 

3.56

%

 

 

170,396

 

559

1.33

%

Total interest-earning assets

 

38,499,523

$

506,039

 

5.45

%

 

 

34,792,143

$

258,617

3.11

%

Nonearning assets

 

 

 

 

 

 

 

Intangible assets

 

1,880,890

 

 

 

 

1,863,730

 

 

Other nonearning assets

 

2,603,441

 

 

 

 

1,981,348

 

 

Total assets

$

42,983,854

 

 

 

$

38,637,221

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

Interest checking

 

7,793,823

 

52,474

 

2.73

%

 

 

6,391,316

 

2,599

0.16

%

Savings and money market

 

14,377,996

 

97,519

 

2.75

%

 

 

12,587,219

 

5,124

0.17

%

Time

 

3,787,639

 

26,596

 

2.85

%

 

 

2,082,047

 

2,527

0.49

%

Total interest-bearing deposits

 

25,959,458

 

176,589

 

2.76

%

 

 

21,060,582

 

10,250

0.20

%

Securities sold under agreements to repurchase

 

219,082

 

595

 

1.10

%

 

 

179,869

 

56

0.13

%

Federal Home Loan Bank advances

 

1,130,356

 

10,970

 

3.94

%

 

 

888,746

 

4,474

2.04

%

Subordinated debt and other borrowings

 

426,564

 

5,654

 

5.38

%

 

 

441,755

 

4,362

4.00

%

Total interest-bearing liabilities

 

27,735,460

 

193,808

 

2.83

%

 

 

22,570,952

 

19,142

0.34

%

Noninterest-bearing deposits

 

9,332,317

 

 

 

 

 

10,478,403

 

 

Total deposits and interest-bearing liabilities

 

37,067,777

$

193,808

 

2.12

%

 

 

33,049,355

$

19,142

0.23

%

Other liabilities

 

310,473

 

 

 

 

256,461

 

 

Shareholders' equity

 

5,605,604

 

 

 

 

5,331,405

 

 

Total liabilities and shareholders' equity

$

42,983,854

 

 

 

$

38,637,221

 

 

Net interest income

 

$

312,231

 

 

 

 

$

239,475

 

Net interest spread (3)

 

 

2.61

%

 

 

 

2.77

%

Net interest margin (4)

 

 

3.40

%

 

 

 

2.89

%

 

 

 

 

 

 

 

 

(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 $10.9 million of taxable equivalent income for the three months ended March 31, 2023 compared to $8.5 million for the three months ended March 31, 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 March 31, 2023 would have been 3.32% compared to a net interest spread of 2.88% for the three months ended March 31, 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)

March

December

September

June

March

December

2023

2022

2022

2022

2022

2021

Asset quality information and ratios:

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

Nonaccrual loans

$

36,988

 

38,116

 

34,115

 

15,459

 

26,616

 

31,569

 

ORE and other nonperforming assets (NPAs)

 

7,802

 

7,952

 

7,787

 

8,237

 

8,437

 

8,537

 

Total nonperforming assets

$

44,790

 

46,068

 

41,902

 

23,696

 

35,053

 

40,106

 

Past due loans over 90 days and still accruing interest

$

5,284

 

4,406

 

6,757

 

3,840

 

1,605

 

1,607

 

Accruing purchase credit deteriorated loans

$

7,684

 

8,060

 

8,759

 

9,194

 

12,661

 

13,086

 

Net loan charge-offs

$

7,291

 

11,729

 

10,983

 

877

 

2,958

 

8,077

 

Allowance for credit losses to nonaccrual loans

��

848.5

%

788.8

%

844.5

%

1,762.6

%

982.9

%

833.8

%

As a percentage of total loans:

 

 

 

 

 

 

Past due accruing loans over 30 days

 

0.14

%

0.15

%

0.13

%

0.11

%

0.11

%

0.09

%

Potential problem loans

 

0.22

%

0.19

%

0.21

%

0.32

%

0.41

%

0.47

%

Allowance for credit losses

 

1.04

%

1.04

%

1.04

%

1.03

%

1.07

%

1.12

%

Nonperforming assets to total loans, ORE and other NPAs

 

0.15

%

0.16

%

0.15

%

0.09

%

0.14

%

0.17

%

Classified asset ratio (Pinnacle Bank) (6)

 

2.7

%

2.4

%

2.6

%

2.9

%

3.6

%

4.1

%

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

 

0.10

%

0.17

%

0.16

%

0.01

%

0.05

%

0.14

%

 

 

 

 

 

 

 

Interest rates and yields:

 

 

 

 

 

 

Loans

 

6.00

%

5.54

%

4.73

%

4.07

%

3.94

%

4.04

%

Securities

 

3.47

%

3.19

%

2.66

%

2.29

%

2.12

%

2.08

%

Total earning assets

 

5.45

%

5.02

%

4.20

%

3.49

%

3.11

%

3.20

%

Total deposits, including non-interest bearing

 

2.03

%

1.40

%

0.66

%

0.23

%

0.13

%

0.14

%

Securities sold under agreements to repurchase

 

1.10

%

0.94

%

0.34

%

0.15

%

0.13

%

0.15

%

FHLB advances

 

3.94

%

3.04

%

2.26

%

1.92

%

2.04

%

2.04

%

Subordinated debt and other borrowings

 

5.38

%

4.98

%

4.51

%

4.04

%

4.00

%

4.23

%

Total deposits and interest-bearing liabilities

 

2.12

%

1.47

%

0.75

%

0.34

%

0.23

%

0.26

%

 

 

 

 

 

 

 

Capital and other ratios (6):

 

 

 

 

 

 

Pinnacle Financial ratios:

 

 

 

 

 

 

Shareholders' equity to total assets

 

12.6

%

13.2

%

13.0

%

13.2

%

13.4

%

13.8

%

Common equity Tier one

 

9.9

%

10.0

%

10.0

%

10.2

%

10.5

%

10.9

%

Tier one risk-based

 

10.5

%

10.5

%

10.7

%

10.9

%

11.2

%

11.7

%

Total risk-based

 

12.4

%

12.4

%

12.6

%

12.9

%

13.3

%

13.8

%

Leverage

 

9.6

%

9.7

%

9.7

%

9.8

%

9.5

%

9.7

%

Tangible common equity to tangible assets

 

8.3

%

8.5

%

8.3

%

8.4

%

8.5

%

8.8

%

Pinnacle Bank ratios:

 

 

 

 

 

 

Common equity Tier one

 

10.8

%

10.9

%

11.1

%

11.0

%

11.4

%

11.9

%

Tier one risk-based

 

10.8

%

10.9

%

11.1

%

11.0

%

11.4

%

11.9

%

Total risk-based

 

11.6

%

11.6

%

11.8

%

11.7

%

12.1

%

12.6

%

Leverage

 

9.9

%

10.1

%

10.1

%

9.9

%

9.6

%

9.9

%

Construction and land development loans

as a percentage of total capital (17)

 

88.5

%

85.9

%

85.4

%

87.4

%

87.4

%

79.1

%

Non-owner occupied commercial real estate and

multi-family as a percentage of total capital (17)

 

261.1

%

249.6

%

244.0

%

250.2

%

243.7

%

234.1

%

 

 

 

 

 

 

 

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)

March

December

September

June

March

December

2023

2022

2022

2022

2022

2021

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

Earnings per common share – basic

$

1.76

 

1.77

 

1.91

 

1.87

 

1.66

 

1.72

 

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

$

1.76

 

1.77

 

1.91

 

1.87

 

1.66

 

1.71

 

Earnings per common share – diluted

$

1.76

 

1.76

 

1.91

 

1.86

 

1.65

 

1.71

 

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

$

1.76

 

1.76

 

1.91

 

1.86

 

1.65

 

1.70

 

Common dividends per share

$

0.22

 

0.22

 

0.22

 

0.22

 

0.22

 

0.18

 

Book value per common share at quarter end (7)

$

71.24

 

69.35

 

67.07

 

66.74

 

66.30

 

66.89

 

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

$

46.75

 

44.74

 

42.44

 

42.08

 

41.65

 

42.55

 

Revenue per diluted common share

$

5.28

 

5.27

 

5.40

 

5.14

 

4.52

 

4.47

 

Revenue per diluted common share, excluding non-GAAP adjustments

$

5.28

 

5.27

 

5.40

 

5.14

 

4.52

 

4.46

 

 

 

 

 

 

 

 

 

Investor information:

 

 

 

 

 

 

 

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

$

55.16

 

73.40

 

81.10

 

72.31

 

92.08

 

95.50

 

High closing sales price of common stock during quarter

$

82.79

 

87.81

 

87.66

 

91.42

 

110.41

 

104.72

 

Low closing sales price of common stock during quarter

$

52.51

 

70.74

 

68.68

 

68.56

 

90.46

 

90.20

 

 

 

 

 

 

 

 

 

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

$

24.15

 

25.35

 

25.33

 

25.19

 

26.72

 

28.21

 

High closing sales price of depositary shares during quarter

$

25.71

 

25.60

 

26.23

 

26.44

 

28.53

 

28.99

 

Low closing sales price of depositary shares during quarter

$

20.77

 

23.11

 

24.76

 

24.75

 

25.63

 

27.42

 

 

 

 

 

 

 

 

 

Other information:

 

 

 

 

 

 

 

Residential mortgage loan sales:

 

 

 

 

 

 

 

Gross loans sold

$

120,146

 

134,514

 

181,139

 

239,736

 

270,793

 

352,342

 

Gross fees (8)

$

2,795

 

3,149

 

3,189

 

6,523

 

5,700

 

10,098

 

Gross fees as a percentage of loans originated

 

2.33

%

2.34

%

1.76

%

2.72

%

2.11

%

2.87

%

Net gain (loss) on residential mortgage loans sold

$

2,053

 

(65

)

1,117

 

2,150

 

4,066

 

4,244

 

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

$

 

 

217

 

 

(61

)

393

 

Brokerage account assets, at quarter end (9)

$

8,634,339

 

8,049,125

 

7,220,405

 

6,761,480

 

7,158,939

 

7,187,085

 

Trust account managed assets, at quarter end

$

4,855,951

 

4,560,752

 

4,162,639

 

4,207,406

 

4,499,911

 

4,720,290

 

Core deposits (10)

$

32,054,111

 

31,301,077

 

30,748,817

 

30,011,444

 

30,398,683

 

29,316,911

 

Core deposits to total funding (10)

 

82.4

%

86.8

%

87.4

%

87.0

%

89.9

%

89.5

%

Risk-weighted assets

$

38,117,659

 

36,216,901

 

35,281,315

 

33,366,074

 

31,170,258

 

29,349,534

 

Number of offices

 

126

 

123

 

120

 

119

 

119

 

118

 

Total core deposits per office

$

254,398

 

254,480

 

256,240

 

252,197

 

255,451

 

248,448

 

Total assets per full-time equivalent employee

$

13,750

 

12,948

 

12,875

 

13,052

 

13,186

 

13,541

 

Annualized revenues per full-time equivalent employee

$

496.5

 

491.8

 

511.5

 

509.0

 

465.5

 

474.1

 

Annualized expenses per full-time equivalent employee

$

261.7

 

247.3

 

248.2

 

255.8

 

247.9

 

238.0

 

Number of employees (full-time equivalent)

 

3,281.5

 

3,241.5

 

3,184.5

 

3,074.0

 

2,988.0

 

2,841.0

 

Associate retention rate (11)

 

93.8

%

93.8

%

93.6

%

93.3

%

93.1

%

93.4

%

 

 

 

 

 

 

 

 

This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

Three months ended

(dollars in thousands, except per share data)

March

December

March

2023

2022

2022

 

 

 

 

Net interest income

$

312,231

 

319,460

 

239,475

 

 

 

 

 

Noninterest income

 

89,529

 

82,321

 

103,496

 

Total revenues

 

401,760

 

401,781

 

342,971

 

Less: Investment losses on sales of securities, net

 

 

 

61

 

Total revenues excluding the impact of adjustments noted above

$

401,760

 

401,781

 

343,032

 

 

 

 

 

Noninterest expense

$

211,727

 

202,047

 

182,661

 

Less: ORE expense

 

99

 

179

 

105

 

Noninterest expense excluding the impact of adjustments noted above

$

211,628

 

201,868

 

182,556

 

 

 

 

 

Pre-tax income

$

171,266

 

174,929

 

157,590

 

Provision for credit losses

 

18,767

 

24,805

 

2,720

 

Pre-tax pre-provision net revenue

 

190,033

 

199,734

 

160,310

 

Adjustments noted above

 

99

 

179

 

166

 

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

$

190,132

 

199,913

 

160,476

 

 

 

 

 

Noninterest income

$

89,529

 

82,321

 

103,496

 

Less: Adjustments as noted above

 

 

 

61

 

Noninterest income excluding the impact of adjustments noted above

$

89,529

 

82,321

 

103,557

 

 

 

 

 

Efficiency ratio (4)

 

52.70

%

50.29

%

53.26

%

Adjustments as noted above

 

(0.02

) %

(0.05

) %

(0.04

) %

Efficiency ratio (excluding adjustments noted above) (4)

 

52.68

%

50.24

%

53.22

%

 

 

 

 

Total average assets

$

42,983,854

 

41,324,251

 

38,637,221

 

 

 

 

 

Noninterest income to average assets (1)

 

0.84

%

0.79

%

1.09

%

Adjustments as noted above

 

%

%

%

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

 

0.84

%

0.79

%

1.09

%

 

 

 

 

Noninterest expense to average assets (1)

 

2.00

%

1.94

%

1.92

%

Adjustments as noted above

 

%

%

%

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

 

2.00

%

1.94

%

1.92

%

 

 

 

 

This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

 

RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

 

Three months ended

(dollars in thousands, except per share data)

March

December

September

June

March

December

2023

2022

2022

2022

2022

2021

Net income available to common shareholders

$

133,473

 

134,049

 

144,860

 

141,329

 

125,312

 

129,730

 

Investment (gains) losses on sales of securities, net

 

 

 

(217

)

 

61

 

(393

)

ORE expense (benefit)

 

99

 

179

 

(90

)

86

 

105

 

37

 

Tax effect on adjustments noted above (16)

 

(25

)

(47

)

80

 

(22

)

(43

)

93

 

Net income available to common shareholders excluding adjustments noted above

$

133,547

 

134,181

 

144,633

 

141,393

 

125,435

 

129,467

 

 

 

 

 

 

 

 

Basic earnings per common share

$

1.76

 

1.77

 

1.91

 

1.87

 

1.66

 

1.72

 

Adjustment due to investment (gains) losses on sales of securities, net

 

 

 

 

 

 

(0.01

)

Adjustment due to ORE expense (benefit)

 

 

 

 

 

 

 

Adjustment due to tax effect on adjustments noted above (16)

 

 

 

 

 

 

 

Basic earnings per common share excluding adjustments noted above

$

1.76

 

1.77

 

1.91

 

1.87

 

1.66

 

1.71

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

1.76

 

1.76

 

1.91

 

1.86

 

1.65

 

1.71

 

Adjustment due to investment (gains) losses on sales of securities, net

 

 

 

 

 

 

(0.01

)

Adjustment due to ORE expense (benefit)

 

 

 

 

 

 

 

Adjustment due to tax effect on adjustments noted above (16)

 

 

 

 

 

 

 

Diluted earnings per common share excluding the adjustments noted above

$

1.76

 

1.76

 

1.91

 

1.86

 

1.65

 

1.70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue per diluted common share

$

5.28

 

5.27

 

5.40

 

5.14

 

4.52

 

4.47

 

Adjustments as noted above

 

 

 

 

 

 

(0.01

)

Revenue per diluted common share excluding adjustments noted above

$

5.28

 

5.27

 

5.40

 

5.14

 

4.52

 

4.46

 

 

 

 

 

 

 

 

Book value per common share at quarter end (7)

$

71.24

 

69.35

 

67.07

 

66.74

 

66.30

 

66.89

 

Adjustment due to goodwill, core deposit and other intangible assets

 

(24.49

)

(24.61

)

(24.63

)

(24.66

)

(24.65

)

(24.34

)

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

$

46.75

 

44.74

 

42.44

 

42.08

 

41.65

 

42.55

 

 

 

 

 

 

 

 

Paycheck Protection Program (PPP)

 

 

 

 

 

 

PPP net interest income

$

20

 

72

 

755

 

4,060

 

10,690

 

15,131

 

Income tax expense at statutory rates (16)

 

5

 

19

 

197

 

1,061

 

2,794

 

3,955

 

Earnings attributable to PPP

 

15

 

53

 

558

 

2,999

 

7,896

 

11,176

 

 

 

 

 

 

 

 

Basic earnings per common share attributable to PPP

$

 

 

0.01

 

0.04

 

0.10

 

0.15

 

Diluted earnings per common share attributable to PPP

$

 

 

0.01

 

0.04

 

0.10

 

0.15

 

 

 

 

 

 

 

 

Equity method investment (15)

 

 

 

 

 

 

Fee income from BHG, net of amortization

$

19,079

 

21,005

 

41,341

 

49,465

 

33,655

 

30,844

 

Funding cost to support investment

 

5,093

 

4,586

 

3,891

 

1,998

 

666

 

388

 

Pre-tax impact of BHG

 

13,986

 

16,419

 

37,450

 

47,467

 

32,989

 

30,456

 

Income tax expense at statutory rates (16)

 

3,497

 

4,292

 

9,789

 

12,408

 

8,623

 

7,961

 

Earnings attributable to BHG

$

10,489

 

12,127

 

27,661

 

35,059

 

24,366

 

22,495

 

 

 

 

 

 

 

 

Basic earnings per common share attributable to BHG

$

0.14

 

0.16

 

0.37

 

0.46

 

0.32

 

0.30

 

Diluted earnings per common share attributable to BHG

$

0.14

 

0.16

 

0.36

 

0.46

 

0.32

 

0.30

 

 

 

 

 

 

 

 

This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

Three months ended

(dollars in thousands, except per share data)

March

December

March

2023

2022

2022

 

 

 

 

Return on average assets (1)

 

1.26

%

1.29

%

1.32

%

Adjustments as noted above

 

%

%

%

Return on average assets excluding adjustments noted above (1)

 

1.26

%

1.29

%

1.32

%

 

 

 

 

Tangible assets:

 

 

 

Total assets

$

45,119,587

 

41,970,021

 

39,400,378

 

Less: Goodwill

 

(1,846,973

)

(1,846,973

)

(1,850,951

)

Core deposit and other intangible assets

 

(32,761

)

(34,555

)

(31,997

)

Net tangible assets

$

43,239,853

 

40,088,493

 

37,517,430

 

 

 

 

 

Tangible common equity:

 

 

 

Total shareholders' equity

$

5,684,128

 

5,519,392

 

5,280,950

 

Less: Preferred shareholders' equity

 

(217,126

)

(217,126

)

(217,126

)

Total common shareholders' equity

 

5,467,002

 

5,302,266

 

5,063,824

 

Less: Goodwill

 

(1,846,973

)

(1,846,973

)

(1,850,951

)

Core deposit and other intangible assets

 

(32,761

)

(34,555

)

(31,997

)

Net tangible common equity

$

3,587,268

 

3,420,738

 

3,180,876

 

 

 

 

 

Ratio of tangible common equity to tangible assets

 

8.30

%

8.53

%

8.48

%

 

 

 

 

Average tangible assets:

 

 

 

Average assets

$

42,983,854

 

41,324,251

 

38,637,221

 

Less: Average goodwill

 

(1,846,973

)

(1,846,471

)

(1,830,553

)

Average core deposit and other intangible assets

 

(33,917

)

(35,126

)

(33,177

)

Net average tangible assets

$

41,102,964

 

39,442,654

 

36,773,491

 

 

 

 

 

Return on average assets (1)

 

1.26

%

1.29

%

1.32

%

Adjustment due to goodwill, core deposit and other intangible assets

 

0.06

%

0.06

%

0.06

%

Return on average tangible assets (1)

 

1.32

%

1.35

%

1.38

%

Adjustments as noted above

 

%

%

%

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

 

1.32

%

1.35

%

1.38

%

 

 

 

 

Average tangible common equity:

 

 

 

Average shareholders' equity

$

5,605,604

 

5,433,274

 

5,331,405

 

Less: Average preferred equity

 

(217,126

)

(217,126

)

(217,126

)

Average common equity

 

5,388,478

 

5,216,148

 

5,114,279

 

Less: Average goodwill

 

(1,846,973

)

(1,846,471

)

(1,830,553

)

Average core deposit and other intangible assets

 

(33,917

)

(35,126

)

(33,177

)

Net average tangible common equity

$

3,507,588

 

3,334,551

 

3,250,549

 

 

 

 

 

Return on average equity (1)

 

9.66

%

9.79

%

9.53

%

Adjustment due to average preferred shareholders' equity

 

0.39

%

0.41

%

0.41

%

Return on average common equity (1)

 

10.05

%

10.20

%

9.94

%

Adjustment due to goodwill, core deposit and other intangible assets

 

5.38

%

5.75

%

5.69

%

Return on average tangible common equity (1)

 

15.43

%

15.95

%

15.63

%

Adjustments as noted above

 

0.01

%

0.01

%

0.02

%

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

 

15.44

%

15.96

%

15.65

%

 

 

 

 

 

 

 

 

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 operations 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. Associate retention rate does not include associates at acquired institutions displaced by merger.

12. Adjusted pre-tax, pre-provision net revenue excludes the impact of ORE expenses and income and investment gains and losses on sales of securities.

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 issuance of subordinated debt as well as the funding costs of the overall franchise. 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

Contacts

MEDIA CONTACT: Joe Bass, 615-743-8219

FINANCIAL CONTACT: Harold Carpenter, 615-744-3742

WEBSITE: www.pnfp.com

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