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     506  0 Kommentare PNFP Reports Diluted EPS of $1.31, ROAA of 1.55% and ROTCE of 17.74% For 2Q 2019

    Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.31 for the quarter ended June 30, 2019, compared to net income per diluted common share of $1.12 for the quarter ended June 30, 2018, an increase of 17.0 percent. Net income per diluted common share was $2.53 for the six months ended June 30, 2019, compared to net income per diluted common share of $2.20 for the six months ended June 30, 2018, an increase of 15.0 percent.

    The following items impacted Pinnacle Financial’s second quarter of 2019 results:

    • $4.5 million in net losses on the sale of $382.0 million of investment securities as the firm seeks to better position its balance sheet for potential reductions in short-term rates,
    • $1.5 million loss from the sale of its remaining non-prime automobile portfolio, to finalize our exit from that business, which has been underway for some time,
    • $2.4 million write-down of facilities and land acquired in the BNC acquisition that previously had been held for potential expansion, and
    • $3.2 million non-cash impairment charge related to the proposed consolidation of five offices across the firm's footprint.

    Excluding these items, as well as merger-related charges in 2018 and ORE expense in each period, net income per diluted common share was $1.42 for the three months ended June 30, 2019, compared to net income per diluted common share of $1.16 for the three months ended June 30, 2018, a growth rate of 22.4 percent. Excluding the same adjustments noted above for the six months ended June 30, 2019 and 2018, net income per diluted common share was $2.66 for the six months ended June 30, 2019, compared to net income per diluted common share of $2.28 for the six months ended June 30, 2018, a growth rate of 16.7 percent.

    "Obviously, we are excited about our very strong earnings growth in the second quarter and first six months of 2019," said M. Terry Turner, Pinnacle's president and chief executive officer. "Highlights for the quarter included double-digit loan growth, strong hiring throughout our footprint and better than anticipated fee income associated with our investment in BHG. During the quarter, we also implemented plans for rationalization of certain assets. Our decision to sell the remainder of our non-prime automobile loans and to consolidate a number of branch offices, along with the other items noted above, negatively impacted the second quarter by approximately $12.0 million in additional expenses. However, by incurring these expenses, we believe we are much better positioned to absorb potential decreases in short-term interest rates. These actions also eliminate any future losses that could have been incurred from the non-prime automobile portfolio."

    GROWING THE CORE EARNINGS CAPACITY OF THE FIRM:

    • Loans at June 30, 2019 were a record $18.8 billion, an increase of $1.8 billion from June 30, 2018, reflecting year-over-year growth of 10.4 percent. Loans at June 30, 2019 increased $639.4 million from March 31, 2019, reflecting a linked-quarter annualized growth rate of 14.1 percent.
      • Average loans were $18.6 billion for the three months ended June 30, 2019, up $672.7 million from $17.9 billion for the three months ended March 31, 2019, an annualized growth rate of 15.0 percent.
      • At June 30, 2019, the remaining discount associated with fair value accounting adjustments on acquired loans was $75.4 million, compared to $85.8 million at March 31, 2019.
    • Deposits at June 30, 2019 were $19.4 billion, an increase of $1.6 billion from June 30, 2018, reflecting year-over-year growth of 8.9 percent. Deposits at June 30, 2019 increased $968.9 million from March 31, 2019, reflecting a linked-quarter annualized growth rate of 21.0 percent.
      • Average deposits were $18.9 billion for the three months ended June 30, 2019, compared to $18.4 billion for the three months ended March 31, 2019, an annualized growth rate of 11.0 percent.
      • Core deposits were $16.5 billion at June 30, 2019, compared to $16.3 billion at March 31, 2019 and $15.4 billion at June 30, 2018, a year-over-year growth rate of 7.2 percent.
    • Revenues for the quarter ended June 30, 2019 were $259.6 million, an increase of $21.3 million from the $238.3 million recognized in the first quarter of 2019, and up $29.4 million from the second quarter of 2018. This represents a year-over-year growth rate of 12.8 percent. Second quarter 2019 revenues reflect the impact of a $7.2 million reduction in loan discount accretion when compared to the second quarter of 2018.
      • Revenue per fully diluted share was $3.39 for the three months ended June 30, 2019, compared to $3.09 for the first quarter of 2019 and $2.97 for the second quarter of 2018.

    "We hired 45 high-profile revenue producers during the first six months of 2019, a strong predictor of our continued future growth," Turner said. "We believe our recruiting success is creating even more opportunities for our firm to move meaningful market share from larger banks. Taking market share by virtue of being able to hire the best bankers in our market is the only way I know to reliably produce outsized growth on a sound basis over the long term.

    "We continue to experience much progress in the Carolinas and Virginia and could not be more proud of our successes there. We believe the BNC merger has been a great success and we anticipate many years of sustainable growth for our firm. BHG was another sound investment for our firm. Its franchise value, we believe, has increased significantly since our first investment in 2015. We believe the leadership and employees at BHG have worked tirelessly to grow their firm on a sound basis, and we anticipate more growth in future periods as our partnership continues to thrive."

    FOCUSING ON PROFITABILITY:

    • Return on average assets was 1.55 percent for the second quarter of 2019, compared to 1.52 percent for the first quarter of 2019 and 1.50 percent for the second quarter last year. Second quarter 2019 return on average tangible assets amounted to 1.67 percent, compared to 1.64 percent for the first quarter of 2019 and 1.63 percent for the second quarter of 2018.
      • Excluding the adjustments described above for both 2019 and 2018, return on average assets was 1.69 percent for the second quarter of 2019, compared to 1.55 percent for both the first quarter of 2019 and the second quarter of 2018. Likewise, excluding those same adjustments, the firm’s return on average tangible assets was 1.82 percent for the second quarter of 2019, compared to 1.67 percent for the first quarter of 2019 and 1.68 for the second quarter of 2018.
    • Return on average common equity for the second quarter of 2019 amounted to 9.77 percent, compared to 9.49 percent for the first quarter of 2019 and 9.18 percent for the second quarter of 2018. Second quarter 2019 return on average tangible common equity amounted to 17.74 percent, compared to 17.60 percent for the first quarter of 2019 and 18.01 for the second quarter of 2018.
      • Excluding the adjustments described above for both 2019 and 2018, return on average tangible common equity amounted to 19.28 percent for the second quarter of 2019, compared to 17.91 percent for the first quarter of 2019 and 18.58 percent for the second quarter of 2018.

    "Our profitability metrics remain strong and provide us the ongoing leverage to hire more revenue producers and continue investing in our future growth," said Harold R. Carpenter, Pinnacle's chief financial officer. "BHG reported a remarkable quarter that was the culmination of many initiatives they have been working on for several months. They have not only developed more sophisticated tools to better target potential borrowers, but they also have expanded their reach into other professional firms such as lawyers, accountants and others. This elevated production occurred during a time when FICO scores and their internally generated credit scores for their borrowers have actually improved. During the quarter, we also took the opportunity to critically evaluate certain assets. Specifically, we executed several initiatives during the quarter to better insulate our earnings in a down rate environment such as purchasing loan interest rate floors, unwinding fixed to floating loan interest rate swaps and repositioning a portion of the bond portfolio.

    "We are aware that our industry faces many macro challenges. In spite of these challenges, we continue to target top-quartile profitability and, more importantly, continue our focus on earnings per share growth and tangible book value per share accretion, having produced 5-year compounded annual growth rates of 23.7 percent and 15.8 percent, respectively, in those key metrics through the second quarter of 2019."

    MAINTAINING A FORTRESS BALANCE SHEET:

    • Net charge-offs were $4.1 million for the quarter ended June 30, 2019, compared to $3.6 million for the quarter ended March 31, 2019 and $4.0 million for the quarter ended June 30, 2018. Annualized net charge-offs as a percentage of average loans for the quarter ended June 30, 2019 were 0.09 percent, compared to 0.08 percent for the quarter ended March 31, 2019 and 0.10 percent for the second quarter of 2018.
    • Nonperforming assets decreased to 0.55 percent of total loans and ORE at June 30, 2019, from 0.61 percent at March 31, 2019, and up slightly from 0.53 percent at June 30, 2018. Nonperforming assets were $102.7 million at June 30, 2019, compared to $111.3 million at March 31, 2019 and $91.1 million at June 30, 2018.
    • The classified asset ratio at June 30, 2019 was 13.9 percent, compared to 13.0 percent at March 31, 2019 and 12.6 percent at June 30, 2018. Classified assets were $337.8 million at June 30, 2019, compared to $306.8 million at March 31, 2019 and $267.3 million at June 30, 2018.
    • The allowance for loan losses represented 0.48 percent of total loans at each of June 30, 2019 and March 31, 2019, compared to 0.44 percent at June 30, 2018.
      • The ratio of the allowance for loan losses to nonperforming loans increased to 118.6 percent at June 30, 2019, from 90.7 percent at March 31, 2019 and 106.7 percent at June 30, 2018. At June 30, 2019, purchase credit impaired loans of $7.2 million, which were recorded at fair value upon acquisition, represented 9.4 percent of the firm's nonperforming loans.
      • Provision for loan losses was $7.2 million in the second quarter of 2019, compared to $7.2 million in the first quarter of 2019 and $9.4 million in the second quarter of 2018.

    "Asset quality continues to be a highlight for our firm," Carpenter said. "Net charge-offs, nonperforming assets and classified assets remain very low. Net charge-offs in our primary loan segments of C&I, CRE and construction have been very low for an extended period of time. Year-to-date in 2019, net charge-offs in these segments were 0.07 percent annualized, compared to 0.07 percent in 2018 and 0.02 percent in 2017."

    GROWING REVENUES

    • Net interest income for the quarter ended June 30, 2019 was $188.9 million, compared to $187.2 million for the first quarter of 2019 and $182.2 million for the second quarter of 2018, a year-over-year growth rate of 3.7 percent. Net interest margin was 3.48 percent for the second quarter of 2019, compared to 3.62 percent for the first quarter of 2019 and 3.69 percent for the second quarter of 2018.
      • Included in net interest income for the second quarter of 2019 was $8.9 million of discount accretion associated with fair value adjustments, compared to $9.7 million of similar discount accretion recognized in the first quarter of 2019 and $16.1 million in the second quarter of 2018.
      • Average earning assets included $81.4 million of fair value adjustments related to our acquisitions at June 30, 2019, compared to $92.4 million at March 31, 2019 and $143.3 million at June 30, 2018.
    • Noninterest income for the quarter ended June 30, 2019 was $70.7 million, compared to $51.1 million for the first quarter of 2019 and $47.9 million for the second quarter of 2018, a year-over-year growth rate of 47.4 percent.
      • Wealth management revenues, which include investment, trust and insurance services, were $11.4 million for the quarter ended June 30, 2019, compared to $11.6 million for the first quarter of 2019 and $10.5 million for the second quarter of 2018.
      • Income from the firm's investment in BHG was $32.3 million for the quarter ended June 30, 2019, compared to $13.3 million for the quarter ended March 31, 2019 and $9.7 million for the quarter ended June 30, 2018. Income from the firm's investment in BHG grew more than 200 percent for the quarter ended June 30, 2019, compared to the quarter ended June 30, 2018.
      • Other noninterest income was $16.5 million for the quarter ended June 30, 2019 compared to $14.6 million for the quarter ended March 31, 2019 and $15.3 million for the quarter ended June 30, 2018. Contributing to the increase were increased credit card interchange fees and increased fees related to the firm's various lending programs. Other noninterest income for the quarter ended June 30, 2019 was also impacted by a $1.5 million charge associated with the sale of the firm's remaining non-prime automobile portfolio in the second quarter of 2019.

    "For good reason, the rate environment has attracted much attention from the broader banking community, including not only bankers but also investors and analysts," Carpenter said. "Operating in this environment while funding high quality loan growth as inexpensively as possible is clearly a challenge. We will continue to support our relationship managers as they attract great clients to our firm, which typically begins with loans.

    "We remain optimistic about our deposit-gathering strategies, which are largely dependent upon our continuing to recruit deposit gatherers to our firm. We are fortunate that we operate in markets with outstanding bankers that allow us to focus on growing revenues consistently and organically over the longer term. Our track record is strong, and we believe we have the runway in our current footprint to accomplish our goals of continuing to be a top-quartile performer."

    CREATING OPERATING LEVERAGE

    • Noninterest expense for the quarter ended June 30, 2019 was $127.7 million, compared to $114.1 million in the first quarter of 2019 and $110.9 million in the second quarter of 2018, reflecting a year-over-year increase of 15.1 percent. Excluding the impairment charges associated with our branch consolidation initiatives, ORE expenses and merger-related charges for the relevant periods as described above, noninterest expense increased 13.8 percent over the second quarter of 2018.
      • Salaries and employee benefits were $75.6 million in the second quarter of 2019, compared to $70.4 million in the first quarter of 2019 and $64.1 million in the second quarter of 2018, reflecting a year-over-year increase of 17.9 percent.
        • Included in salaries and employee benefits are costs related to the firm’s annual cash incentive plan. Incentive costs for this plan amounted to $11.0 million in the second quarter of 2019, compared to $6.3 million in the first quarter of 2019 and $6.9 million in the second quarter of last year.
      • The efficiency ratio for the second quarter of 2019 increased to 49.19 percent, compared to 47.86 percent for the first quarter of 2019 and 48.18 percent in the second quarter of 2018. The ratio of noninterest expenses to average assets increased to 1.98 percent for the second quarter of 2019 from 1.85 percent in the first quarter of 2019 and 1.91 percent in the second quarter of 2018.
        • Excluding the adjustments noted elsewhere in this release for both 2019 and 2018, the efficiency ratio was 45.92 percent for the second quarter of 2019, compared to 47.37 percent for the first quarter of 2019 and 46.57 percent for the second quarter of 2018. Excluding the above described impairment charge, ORE expense and merger-related charges, the ratio of noninterest expense to average assets was 1.89 percent for the second quarter of 2019, compared to 1.84 percent for the first quarter of 2019 and 1.85 percent for the second quarter of 2018.
      • The effective tax rate for the second quarter of 2019 was 19.6 percent, compared to 19.7 percent for the first quarter of 2019 and 20.9 percent for the second quarter of 2018. The effective tax rate for the second quarter of 2019 includes tax expense related to equity compensation of $68,000, compared to a benefit of $769,000 in the first quarter of 2019 and $72,000 in the second quarter of 2018, respectively, associated with vesting of equity-based awards.
      • During the second quarter of 2019, the firm acquired 130,888 shares of its common stock in open market transactions pursuant to its previously announced share repurchase program, at an average price of $56.31.

    "We continue to be pleased with the management of our expense base and our team’s focus on growing revenues," Carpenter said. "We reviewed our branch network for opportunities and believe the proposed consolidation of approximately five facilities is sufficient at this time. We are not exiting any market or entering into any formal personnel reduction programs as a result of these actions.

    "Additionally, we are reporting an adjusted efficiency ratio of 46 percent for our firm for the second quarter of 2019, providing further support that our firm can generate outsized returns efficiently and that we take our reputation of being sound operators seriously."

    BOARD OF DIRECTORS DECLARES DIVIDEND

    On July 16, 2019, Pinnacle's Board of Directors approved a quarterly cash dividend of $0.16 per common share to be paid on Aug. 30, 2019 to common shareholders of record as of the close of business on Aug. 2, 2019. The amount and timing of any future dividend payments to common shareholders will be subject to the discretion 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, 2019 to discuss second quarter 2019 results and other matters. To access the call for audio only, please call 1-877-602-7944. 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. Pinnacle Bank has the No. 1 deposit market share in the Nashville-Murfreesboro-Franklin MSA, according to June 30, 2018 deposit data from the FDIC. Pinnacle earned a place on FORTUNE’s 2017, 2018 and 2019 lists of the 100 Best Companies to Work For in the U.S., and American Banker recognized Pinnacle as one of America’s Best Banks to Work For six years in a row.

    The firm began operations in a single location in downtown Nashville, TN in October 2000 and has since grown to approximately $26.5 billion in assets as of June 30, 2019. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 11 primarily urban markets in Tennessee, the Carolinas and Virginia.

    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 resulting in significant increases in loan losses and provisions for those losses; (ii) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits; (iii) the inability of Pinnacle Financial, or entities in which it has significant investments, like BHG, to maintain the historical growth rate of its, or such entities', loan portfolio; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) effectiveness of Pinnacle Financial's asset management activities in improving, resolving or liquidating lower-quality assets; (vi) 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 compression to net interest margin; (vii) greater than anticipated adverse conditions in the national or local economies including in Pinnacle Financial's markets throughout Tennessee, North Carolina, South Carolina and Virginia, particularly in commercial and residential real estate markets; (viii) fluctuations or differences in interest rates on loans or deposits from those that Pinnacle Financial is modeling or anticipating or that affect the yield curve; (ix) the results of regulatory examinations; (x) a merger or acquisition; (xi) risks of expansion into new geographic or product markets; (xii) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including intangible assets; (xiii) 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; (xiv) the ability of Pinnacle Financial to implement its branch consolidation strategy on the timelines, and at the costs, presently contemplated; (xv) deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xvi) 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 Financial's level of applicable commercial real estate loans were to exceed percentage levels of total capital in guidelines recommended by its regulators; (xvii) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xviii) the vulnerability of Pinnacle Bank's network and online banking portals, and the systems of parties with whom Pinnacle Financial contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (xix) 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; (xx) the risks associated with Pinnacle Financial and 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 if not prohibited from doing so by Pinnacle Financial or Pinnacle Bank; (xxi) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, like BHG, including regulatory or legislative developments; (xxii) risks associated with the possible shutdown of the United States federal government, including adverse effects on the national or local economies and adverse effects resulting from a shutdown of the U.S. Small Business Administration's SBA loan program; (xxiii) the availability of and access to capital; (xxiv) 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 (xxv) 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, 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, earnings per diluted share, efficiency ratio 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, the charges associated with Pinnacle Financial's branch consolidation project, the sale of the remaining portion of Pinnacle Bank's non-prime automobile portfolio, the revaluation of Pinnacle Financial’s deferred tax assets and other matters for the accounting periods presented. This release also includes non-GAAP financial measures which exclude expenses associated with Pinnacle Bank's merger with BNC. 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. 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 2019 versus certain periods in 2018 and to internally prepared projections.

    PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

    CONSOLIDATED BALANCE SHEETS – UNAUDITED

    (dollars in thousands)

     

     

     

     

    June 30, 2019

    December 31, 2018

    June 30, 2018

    ASSETS

     

     

     

    Cash and noninterest-bearing due from banks

    $

    153,071

    $

    137,433

    $

    193,962

    Restricted cash

    121,440

    65,491

    16,233

    Interest-bearing due from banks

    332,862

    516,920

    407,265

    Federal funds sold and other

    20,214

    1,848

    29,463

    Cash and cash equivalents

    627,587

    721,692

    646,923

     

     

     

     

    Securities available-for-sale, at fair value

    3,256,906

    3,083,686

    2,960,128

    Securities held-to-maturity (fair value of $200.6 million, $193.1 million, and $15.3 million at June 30, 2019, Dec. 31, 2018, and June 30, 2018, respectively)

    190,928

    194,282

    15,341

    Consumer loans held-for-sale

    70,004

    34,196

    108,592

    Commercial loans held-for-sale

    21,295

    15,954

    21,277

     

     

     

     

    Loans

    18,814,318

    17,707,549

    17,042,853

    Less allowance for loan losses

    (90,253)

    (83,575)

    (75,670)

    Loans, net

    18,724,065

    17,623,974

    16,967,183

     

     

     

     

    Premises and equipment, net

    274,729

    265,560

    269,876

    Equity method investment

    243,875

    239,237

    217,283

    Accrued interest receivable

    84,582

    79,657

    65,175

    Goodwill

    1,807,121

    1,807,121

    1,807,121

    Core deposits and other intangible assets

    41,578

    46,161

    51,353

    Other real estate owned

    26,657

    15,165

    19,785

    Other assets

    1,171,028

    904,359

    838,333

    Total assets

    $

    26,540,355

    $

    25,031,044

    $

    23,988,370

     

     

     

     

    LIABILITIES AND STOCKHOLDERS' EQUITY

     

     

     

    Deposits:

     

     

     

    Noninterest-bearing

    $

    4,493,419

    $

    4,309,067

    $

    4,361,414

    Interest-bearing

    3,129,941

    3,464,001

    2,939,833

    Savings and money market accounts

    7,547,166

    7,607,796

    7,129,335

    Time

    4,278,857

    3,468,243

    3,426,836

    Total deposits

    19,449,383

    18,849,107

    17,857,418

    Securities sold under agreements to repurchase

    154,169

    104,741

    128,739

    Federal Home Loan Bank advances

    1,960,062

    1,443,589

    1,581,867

    Subordinated debt and other borrowings

    464,144

    485,130

    465,433

    Accrued interest payable

    30,376

    23,586

    15,604

    Other liabilities

    305,860

    158,951

    112,632

    Total liabilities

    22,363,994

    21,065,104

    20,161,693

     

     

     

     

    Preferred stock, no par value; 10.0 million shares authorized;

    no shares issued and outstanding

    Common stock, par value $1.00; 180.0 million shares authorized; 76.9 million, 77.5 million and 77.9 million shares issued and outstanding at June 30, 2019, Dec. 31, 2018 and June 30, 2018, respectively

    76,929

    77,484

    77,855

    Additional paid-in capital

    3,076,486

    3,107,431

    3,119,461

    Retained earnings

    1,002,434

    833,130

    667,594

    Accumulated other comprehensive income (loss), net of taxes

    20,512

    (52,105)

    (38,233)

    Total stockholders' equity

    4,176,361

    3,965,940

    3,826,677

    Total liabilities and stockholders' equity

    $

    26,540,355

    $

    25,031,044

    $

    23,988,370

     

     

     

     

    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 per share data)

    Three Months Ended

    Six Months Ended

     

    June 30,
    2019

    March 31,
    2019

    June 30,
    2018

    June 30,
    2019

    June 30,
    2018

    Interest income:

     

     

     

     

     

    Loans, including fees

    $

    237,653

    $

    229,379

    $

    208,758

    $

    467,032

    $

    399,972

    Securities

     

     

     

     

     

    Taxable

    12,243

    13,540

    11,748

    25,783

    22,970

    Tax-exempt

    12,556

    11,672

    8,350

    24,228

    15,635

    Federal funds sold and other

    3,399

    3,292

    2,128

    6,691

    3,935

    Total interest income

    265,851

    257,883

    230,984

    523,734

    442,512

     

     

     

     

     

     

    Interest expense:

     

     

     

     

     

    Deposits

    58,988

    54,217

    32,767

    113,205

    56,748

    Securities sold under agreements to repurchase

    142

    145

    143

    287

    273

    FHLB advances and other borrowings

    17,803

    16,275

    15,838

    34,078

    28,784

    Total interest expense

    76,933

    70,637

    48,748

    147,570

    85,805

    Net interest income

    188,918

    187,246

    182,236

    376,164

    356,707

    Provision for loan losses

    7,195

    7,184

    9,402

    14,379

    16,333

    Net interest income after provision for loan losses

    181,723

    180,062

    172,834

    361,785

    340,374

     

     

     

     

     

     

    Noninterest income:

     

     

     

     

     

    Service charges on deposit accounts

    8,940

    8,542

    8,456

    17,482

    16,361

    Investment services

    5,803

    5,404

    5,074

    11,207

    10,319

    Insurance sales commissions

    2,147

    2,928

    2,048

    5,075

    5,167

    Gains on mortgage loans sold, net

    6,011

    4,878

    3,777

    10,889

    7,521

    Investment gains (losses) on sales, net

    (4,466)

    (1,960)

    (6,426)

    30

    Trust fees

    3,461

    3,295

    3,564

    6,756

    6,681

    Income from equity method investment

    32,261

    13,290

    9,690

    45,551

    19,050

    Other noninterest income

    16,525

    14,686

    15,330

    31,211

    26,993

    Total noninterest income

    70,682

    51,063

    47,939

    121,745

    92,122

     

     

     

     

     

     

    Noninterest expense:

     

     

     

     

     

    Salaries and employee benefits

    75,620

    70,376

    64,112

    145,996

    127,831

    Equipment and occupancy

    23,844

    19,331

    18,208

    43,175

    35,951

    Other real estate, net

    2,523

    246

    819

    2,769

    25

    Marketing and other business development

    3,282

    2,948

    2,544

    6,230

    4,791

    Postage and supplies

    2,079

    1,892

    2,291

    3,971

    4,330

    Amortization of intangibles

    2,271

    2,311

    2,659

    4,582

    5,357

    Merger-related expenses

    2,906

    8,259

    Other noninterest expense

    18,067

    16,947

    17,369

    35,014

    32,944

    Total noninterest expense

    127,686

    114,051

    110,908

    241,737

    219,488

    Income before income taxes

    124,719

    117,074

    109,865

    241,793

    213,008

    Income tax expense

    24,398

    23,114

    23,000

    47,512

    42,633

    Net income

    $

    100,321

    $

    93,960

    $

    86,865

    $

    194,281

    $

    170,375

     

     

     

     

     

     

    Per share information:

     

     

     

     

     

    Basic net income per common share

    $

    1.31

    $

    1.22

    $

    1.13

    $

    2.54

    $

    2.21

    Diluted net income per common share

    $

    1.31

    $

    1.22

    $

    1.12

    $

    2.53

    $

    2.20

     

     

     

     

     

     

    Weighted average shares outstanding:

     

     

     

     

     

    Basic

    76,343,608

    76,803,171

    77,123,854

    76,572,120

    77,101,816

    Diluted

    76,611,657

    77,127,692

    77,468,082

    76,866,163

    77,417,930

     

     

     

     

     

     

    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
    2019

    March
    2019

    December
    2018

    September
    2018

    June
    2018

    March
    2018

    Balance sheet data, at quarter end:

     

     

     

     

     

     

    Commercial and industrial loans

    $

    5,795,107

    5,419,520

    5,271,420

    5,006,247

    4,821,299

    4,490,886

    Commercial real estate - owner occupied

     

    2,624,160

    2,617,541

    2,653,433

    2,688,247

    2,504,891

    2,427,946

    Commercial real estate - investment

     

    4,252,098

    4,107,953

    3,855,643

    3,818,055

    3,822,182

    3,714,854

    Commercial real estate - multifamily and other

     

    709,135

    693,652

    655,879

    708,817

    697,566

    651,488

    Consumer real estate - mortgage loans

     

    2,949,755

    2,887,628

    2,844,447

    2,815,160

    2,699,399

    2,580,766

    Construction and land development loans

     

    2,117,969

    2,097,570

    2,072,455

    2,059,009

    2,133,646

    2,095,875

    Consumer and other

     

    366,094

    351,042

    354,272

    368,474

    363,870

    364,202

    Total loans

     

    18,814,318

    18,174,906

    17,707,549

    17,464,009

    17,042,853

    16,326,017

    Allowance for loan losses

     

    (90,253)

    (87,194)

    (83,575)

    (79,985)

    (75,670)

    (70,204)

    Securities

     

    3,447,834

    3,444,049

    3,277,968

    3,199,579

    2,975,469

    2,981,301

    Total assets

     

    26,540,355

    25,557,858

    25,031,044

    24,557,545

    23,988,370

    22,935,174

    Noninterest-bearing deposits

     

    4,493,419

    4,317,787

    4,309,067

    4,476,925

    4,361,414

    4,274,213

    Total deposits

     

    19,449,383

    18,480,461

    18,849,107

    18,407,515

    17,857,418

    16,502,909

    Securities sold under agreements to repurchase

     

    154,169

    100,698

    104,741

    130,217

    128,739

    131,863

    FHLB advances

     

    1,960,062

    2,121,075

    1,443,589

    1,520,603

    1,581,867

    1,976,881

    Subordinated debt and other borrowings

     

    464,144

    484,703

    485,130

    465,487

    465,433

    465,550

    Total stockholders' equity

     

    4,176,361

    4,055,939

    3,965,940

    3,897,041

    3,826,677

    3,749,303

    Balance sheet data, quarterly averages:

     

     

     

     

     

     

    Total loans

    $

    18,611,164

    17,938,480

    17,630,281

    17,259,139

    16,729,734

    15,957,466

    Securities

     

    3,412,475

    3,302,676

    3,148,638

    3,075,633

    2,970,267

    2,829,604

    Federal funds sold and other

     

    530,556

    469,909

    645,644

    647,728

    442,401

    335,093

    Total earning assets

     

    22,554,195

    21,711,065

    21,424,563

    20,982,500

    20,142,402

    19,122,163

    Total assets

     

    25,915,971

    25,049,954

    24,616,733

    24,125,051

    23,236,945

    22,204,599

    Noninterest-bearing deposits

     

    4,399,766

    4,195,443

    4,317,782

    4,330,917

    4,270,459

    4,304,186

    Total deposits

     

    18,864,859

    18,358,094

    18,368,012

    18,112,766

    16,949,374

    16,280,581

    Securities sold under agreements to repurchase

     

    117,261

    109,306

    119,247

    146,864

    123,447

    129,969

    FHLB advances

     

    2,164,341

    1,926,358

    1,689,920

    1,497,511

    1,884,828

    1,584,281

    Subordinated debt and other borrowings

     

    469,498

    470,775

    469,074

    468,990

    474,328

    471,029

    Total stockholders' equity

     

    4,117,754

    4,017,375

    3,939,927

    3,874,430

    3,795,963

    3,732,633

    Statement of operations data, for the three months ended:

    Interest income

    $

    265,851

    257,883

    256,095

    248,110

    230,984

    211,528

    Interest expense

     

    76,933

    70,637

    65,880

    58,690

    48,748

    37,057

    Net interest income

     

    188,918

    187,246

    190,215

    189,420

    182,236

    174,471

    Provision for loan losses

     

    7,195

    7,184

    9,319

    8,725

    9,402

    6,931

    Net interest income after provision for loan losses

     

    181,723

    180,062

    180,896

    180,695

    172,834

    167,540

    Noninterest income

     

    70,682

    51,063

    57,270

    51,478

    47,939

    44,183

    Noninterest expense

     

    127,686

    114,051

    119,409

    113,990

    110,908

    108,580

    Income before taxes

     

    124,719

    117,074

    118,757

    118,183

    109,865

    103,143

    Income tax expense

     

    24,398

    23,114

    23,439

    24,436

    23,000

    19,633

    Net income

    $

    100,321

    93,960

    95,318

    93,747

    86,865

    83,510

     

     

     

     

     

     

     

    Profitability and other ratios:

     

     

     

     

     

     

    Return on avg. assets (1)

     

    1.55%

    1.52%

    1.54%

    1.54%

    1.50%

    1.53%

    Return on avg. common equity (1)

     

    9.77%

    9.49%

    9.60%

    9.60%

    9.18%

    9.07%

    Return on avg. tangible common equity (1)

     

    17.74%

    17.60%

    18.14%

    18.44%

    18.01%

    18.12%

    Dividend payout ratio (16)

     

    12.88%

    13.39%

    13.79%

    14.89%

    16.57%

    18.36%

    Net interest margin (2)

     

    3.48%

    3.62%

    3.63%

    3.65%

    3.69%

    3.77%

    Noninterest income to total revenue (3)

     

    27.23%

    21.43%

    23.14%

    21.37%

    20.83%

    20.21%

    Noninterest income to avg. assets (1)

     

    1.09%

    0.83%

    0.92%

    0.85%

    0.83%

    0.81%

    Noninterest exp. to avg. assets (1)

     

    1.98%

    1.85%

    1.92%

    1.87%

    1.91%

    1.98%

    Efficiency ratio (4)

     

    49.19%

    47.86%

    48.25%

    47.32%

    48.18%

    49.66%

    Avg. loans to avg. deposits

     

    98.66%

    97.71%

    95.98%

    95.29%

    98.70%

    98.02%

    Securities to total assets

     

    12.99%

    13.48%

    13.10%

    13.03%

    12.40%

    13.00%

     

     

     

     

     

     

     

    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, 2019

     

    June 30, 2018

     

    Average Balances

    Interest

    Rates/
    Yields

     

    Average Balances

    Interest

    Rates/
    Yields

    Interest-earning assets

     

     

     

     

     

     

     

    Loans (1) (2)

    $

    18,611,164

    $

    237,653

    5.22%

     

    $

    16,729,734

    $

    208,758

    5.04%

    Securities

     

     

     

     

     

     

     

    Taxable

    1,781,814

    12,243

    2.76%

     

    1,792,845

    11,748

    2.63%

    Tax-exempt (2)

    1,630,661

    12,556

    3.68%

     

    1,177,422

    8,350

    3.34%

    Federal funds sold and other

    530,556

    3,399

    2.57%

     

    442,401

    2,128

    1.93%

    Total interest-earning assets

    22,554,195

    $

    265,851

    4.85%

     

    20,142,402

    $

    230,984

    4.66%

    Nonearning assets

     

     

     

     

     

     

     

    Intangible assets

    1,850,146

     

     

     

    1,860,868

     

     

    Other nonearning assets

    1,511,630

     

     

     

    1,233,675

     

     

    Total assets

    $

    25,915,971

     

     

     

    $

    23,236,945

     

     

     

     

     

     

     

     

     

     

    Interest-bearing liabilities

     

     

     

     

     

     

     

    Interest-bearing deposits:

     

     

     

     

     

     

     

    Interest checking

    3,150,865

    9,305

    1.18%

     

    3,038,705

    6,395

    0.84%

    Savings and money market

    7,355,783

    26,947

    1.47%

     

    6,739,430

    16,165

    0.96%

    Time

    3,958,445

    22,736

    2.30%

     

    2,900,779

    10,207

    1.41%

    Total interest-bearing deposits

    14,465,093

    58,988

    1.64%

     

    12,678,914

    32,767

    1.04%

    Securities sold under agreements to repurchase

    117,261

    142

    0.49%

     

    123,447

    143

    0.47%

    Federal Home Loan Bank advances

    2,164,341

    11,552

    2.14%

     

    1,884,828

    9,690

    2.06%

    Subordinated debt and other borrowings

    469,498

    6,251

    5.34%

     

    474,328

    6,148

    5.20%

    Total interest-bearing liabilities

    17,216,193

    76,933

    1.79%

     

    15,161,517

    48,748

    1.29%

    Noninterest-bearing deposits

    4,399,766

     

    4,270,459

    Total deposits and interest-bearing liabilities

    21,615,959

    $

    76,933

    1.43%

     

    19,431,976

    $

    48,748

    1.01%

    Other liabilities

    182,258

     

     

     

    9,005

     

     

    Stockholders' equity

    4,117,754

     

     

     

    3,795,963

     

     

    Total liabilities and stockholders' equity

    $

    25,915,971

     

     

     

    $

    23,236,944

     

     

    Net interest income

     

    $

    188,918

     

     

     

    $

    182,236

     

    Net interest spread (3)

     

     

    3.06%

     

     

     

    3.37%

    Net interest margin (4)

     

     

    3.48%

     

     

     

    3.69%

     

     

     

     

     

     

     

     

    (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 include $6.9 million of taxable equivalent income for the three months ended June 30, 2019 compared to $3.1 million for the three months ended June 30, 2018. 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 quarter ended June 30, 2019 would have been 3.42% compared to a net interest spread of 3.66% for the quarter ended June 30, 2018.

    (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, 2019

     

    June 30, 2018

     

    Average Balances

    Interest

    Rates/
    Yields

     

    Average Balances

    Interest

    Rates/
    Yields

    Interest-earning assets

     

     

     

     

     

     

     

    Loans (1) (2)

    $

    18,276,680

    $

    467,032

    5.25%

     

    $

    16,345,734

    $

    399,972

    4.98%

    Securities

     

     

     

     

     

     

     

    Taxable

    1,813,693

    25,783

    2.87%

     

    1,793,619

    22,970

    2.58%

    Tax-exempt (2)

    1,544,186

    24,228

    3.77%

     

    1,106,705

    15,635

    3.33%

    Federal funds sold and other

    500,400

    6,691

    2.70%

     

    389,043

    3,935

    2.04%

    Total interest-earning assets

    22,134,959

    $

    523,734

    4.89%

     

    19,635,101

    $

    442,512

    4.61%

    Nonearning assets

     

     

     

     

     

     

     

    Intangible assets

    1,851,292

     

     

     

    1,862,294

     

     

    Other nonearning assets

    1,499,104

     

     

     

    1,226,229

     

     

    Total assets

    $

    25,485,355

     

     

     

    $

    22,723,624

     

     

     

     

     

     

     

     

     

     

    Interest-bearing liabilities

     

     

     

     

     

     

     

    Interest-bearing deposits:

     

     

     

     

     

     

     

    Interest checking

    3,140,734

    18,628

    1.20%

     

    3,006,328

    11,509

    0.77%

    Savings and money market

    7,446,911

    53,284

    1.44%

     

    6,597,734

    28,153

    0.86%

    Time

    3,727,061

    41,293

    2.23%

     

    2,725,534

    17,086

    1.26%

    Total interest-bearing deposits

    14,314,706

    113,205

    1.59%

     

    12,329,596

    56,748

    0.93%

    Securities sold under agreements to repurchase

    113,305

    287

    0.51%

     

    126,690

    273

    0.43%

    Federal Home Loan Bank advances

    2,046,007

    21,515

    2.12%

     

    1,735,385

    16,697

    1.94%

    Subordinated debt and other borrowings

    470,133

    12,563

    5.39%

     

    475,066

    12,087

    5.13%

    Total interest-bearing liabilities

    16,944,151

    147,570

    1.76%

     

    14,666,737

    85,805

    1.18%

    Noninterest-bearing deposits

    4,298,169

     

    4,287,229

    Total deposits and interest-bearing liabilities

    21,242,320

    $

    147,570

    1.40%

     

    18,953,966

    $

    85,805

    0.91%

    Other liabilities

    175,193

     

     

     

    5,185

     

     

    Stockholders' equity

    4,067,842

     

     

     

    3,764,473

     

     

    Total liabilities and stockholders' equity

    $

    25,485,355

     

     

     

    $

    22,723,624

     

     

    Net interest income

     

    $

    376,164

     

     

     

    $

    356,707

     

    Net interest spread (3)

     

     

    3.14%

     

     

     

    3.43%

    Net interest margin (4)

     

     

    3.55%

     

     

     

    3.73%

     

     

     

     

     

     

     

     

    (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 include $13.4 million of taxable equivalent income for the six months ended June 30, 2019 compared to $6.3 million for the six months ended June 30, 2018. 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, 2019 would have been 3.49% compared to a net interest spread of 3.70% for the six months ended June 30, 2018.

    (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
    2019

    March
    2019

    December
    2018

    September
    2018

    June
    2018

    March
    2018

    Asset quality information and ratios:

     

     

     

     

     

     

    Nonperforming assets:

     

     

     

     

     

     

    Nonaccrual loans

     

    76,077

    96,144

    87,834

    77,868

    70,887

    70,202

    Other real estate (ORE) and other nonperforming assets (NPAs)

     

    26,658

    15,138

    15,393

    17,731

    20,229

    24,533

    Total nonperforming assets

    $

    102,735

    111,282

    103,227

    95,599

    91,116

    94,735

    Past due loans over 90 days and still accruing interest

    $

    2,733

    1,982

    1,558

    1,773

    1,572

    1,131

    Accruing troubled debt restructurings (5)

    $

    7,412

    5,481

    5,899

    6,125

    5,647

    6,115

    Accruing purchase credit impaired loans

    $

    12,632

    13,122

    14,743

    21,473

    22,993

    24,398

    Net loan charge-offs

    $

    4,136

    3,565

    5,729

    4,410

    3,936

    3,967

    Allowance for loan losses to nonaccrual loans

     

    118.6%

    90.7%

    95.2%

    102.7%

    106.7%

    100.0%

    As a percentage of total loans:

     

     

     

     

     

     

    Past due accruing loans over 30 days

     

    0.21%

    0.22%

    0.34%

    0.25%

    0.23%

    0.24%

    Potential problem loans (6)

     

    1.21%

    1.05%

    1.00%

    1.16%

    1.00%

    0.97%

    Allowance for loan losses

     

    0.48%

    0.48%

    0.47%

    0.46%

    0.44%

    0.43%

    Nonperforming assets to total loans, ORE and other NPAs

     

    0.55%

    0.61%

    0.58%

    0.55%

    0.53%

    0.58%

    Nonperforming assets to total assets

     

    0.39%

    0.44%

    0.41%

    0.39%

    0.38%

    0.41%

    Classified asset ratio (Pinnacle Bank) (8)

     

    13.9%

    13.0%

    12.4%

    13.7%

    12.6%

    12.6%

    Annualized net loan charge-offs to avg. loans (7)

     

    0.09%

    0.08%

    0.11%

    0.10%

    0.10%

    0.10%

    Wtd. avg. commercial loan internal risk ratings (6)

     

    44.9

    44.9

    44.4

    4.5

    4.4

    4.4

     

     

    44.4

    4.5

    4.4

    4.4

    4.5

    Interest rates and yields:

     

     

     

     

     

     

    Loans

     

    5.22%

    5.28%

    5.22%

    5.15%

    5.04%

    4.91%

    Securities

     

    3.20%

    3.37%

    3.22%

    3.11%

    2.91%

    2.87%

    Total earning assets

     

    4.85%

    4.94%

    4.85%

    4.76%

    4.66%

    4.56%

    Total deposits, including non-interest bearing

     

    1.25%

    1.20%

    1.08%

    0.97%

    0.78%

    0.60%

    Securities sold under agreements to repurchase

     

    0.49%

    0.54%

    0.50%

    0.44%

    0.47%

    0.40%

    FHLB advances

     

    2.14%

    2.10%

    2.18%

    2.16%

    2.06%

    1.79%

    Subordinated debt and other borrowings

     

    5.34%

    5.44%

    5.33%

    5.29%

    5.20%

    5.11%

    Total deposits and interest-bearing liabilities

     

    1.43%

    1.37%

    1.27%

    1.15%

    1.01%

    0.81%

     

     

     

     

     

     

     

    Capital and other ratios (8):

     

     

     

     

     

     

    Pinnacle Financial ratios:

     

     

     

     

     

     

    Stockholders' equity to total assets

     

    15.7%

    15.9%

    15.8%

    15.9%

    16.0%

    16.3%

    Common equity Tier one

     

    9.5%

    9.4%

    9.6%

    9.4%

    9.3%

    9.2%

    Tier one risk-based

     

    9.5%

    9.4%

    9.6%

    9.4%

    9.3%

    9.2%

    Total risk-based

     

    12.0%

    12.0%

    12.2%

    12.1%

    12.0%

    12.0%

    Leverage

     

    9.1%

    9.0%

    8.9%

    8.8%

    8.8%

    8.8%

    Tangible common equity to tangible assets

     

    9.4%

    9.3%

    9.1%

    9.0%

    8.9%

    9.0%

    Pinnacle Bank ratios:

     

     

     

     

     

     

    Common equity Tier one

     

    10.3%

    10.4%

    10.5%

    10.3%

    10.2%

    10.3%

    Tier one risk-based

     

    10.3%

    10.4%

    10.5%

    10.3%

    10.2%

    10.3%

    Total risk-based

     

    11.3%

    11.4%

    11.5%

    11.4%

    11.2%

    11.3%

    Leverage

     

    9.8%

    9.9%

    9.8%

    9.6%

    9.7%

    9.8%

    Construction and land development loans as a percentage of total capital (19)

     

    82.6%

    84.1%

    85.2%

    87.8%

    94.6%

    96.1%

    Non-owner occupied commercial real estate and multi-family as a percentage of total capital (19)

     

    288.9%

    282.5%

    277.7%

    287.6%

    304.3%

    306.2%

     

     

     

     

     

     

     

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

     

    PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

    SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

     

     

     

     

     

     

     

     

    (dollars in thousands, except per share data)

     

    June
    2019

    March
    2019

    December
    2018

    September
    2018

    June
    2018

    March
    2018

     

     

     

     

     

     

     

     

    Per share data:

     

     

     

     

     

     

     

    Earnings – basic

    $

    1.31

    1.22

    1.24

    1.22

    1.13

    1.08

    Earnings - basic, excluding the adjustments noted below

    $

    1.43

    1.24

    1.26

    1.22

    1.15

    1.13

    Earnings – diluted

    $

    1.31

    1.22

    1.23

    1.21

    1.12

    1.08

    Earnings - diluted, excluding the adjustments noted below

    $

    1.42

    1.24

    1.25

    1.21

    1.15

    1.13

    Common dividends per share

    $

    0.16

    0.16

    0.16

    0.14

    0.14

    0.14

    Book value per common share at quarter end (9)

    $

    54.29

    52.63

    51.18

    50.05

    49.15

    48.16

    Tangible book value per common share at quarter end (9)

    $

    30.26

    28.61

    27.27

    26.21

    25.28

    24.24

    Revenue per diluted share

    $

    3.39

    3.09

    3.19

    3.11

    2.97

    2.83

    Revenue per diluted share, excluding the adjustments noted below

    $

    3.47

    3.12

    3.22

    3.11

    2.97

    2.83

    Noninterest expense per diluted share

    $

    1.67

    1.48

    1.54

    1.47

    1.43

    1.40

    Noninterest expense per diluted share, excluding the adjustments noted below

    $

    1.59

    1.48

    1.53

    1.47

    1.38

    1.34

     

     

     

     

     

     

     

     

    Investor information:

     

     

     

     

     

     

     

    Closing sales price on last trading day of quarter

    $

    57.48

    54.70

    46.10

    60.15

    61.35

    64.20

    High closing sales price during quarter

    $

    59.23

    59.55

    61.04

    66.20

    68.10

    69.45

    Low closing sales price during quarter

    $

    52.95

    46.35

    44.03

    60.05

    61.35

    60.20

     

     

     

     

     

     

     

     

    Other information:

     

     

     

     

     

     

     

    Gains on residential mortgage loans sold:

     

     

     

     

     

     

     

    Residential mortgage loan sales:

     

     

     

     

     

     

     

    Gross loans sold

    $

    291,813

    193,830

    236,861

    278,073

    264,934

    237,667

    Gross fees (10)

    $

    8,485

    5,695

    6,184

    7,756

    7,134

    6,036

    Gross fees as a percentage of loans originated

     

    2.91%

    2.94%

    2.61%

    2.79%

    2.69%

    2.54%

    Net gain on residential mortgage loans sold

    $

    6,011

    4,878

    3,141

    3,902

    3,777

    3,744

    Investment gains (losses) on sales of securities, net (15)

    $

    (4,466)

    (1,960)

    (2,295)

    11

    30

    Brokerage account assets, at quarter end (11)

    $

    4,287,985

    4,122,980

    3,763,911

    3,998,774

    3,745,635

    3,508,669

    Trust account managed assets, at quarter end

    $

    2,425,791

    2,263,095

    2,055,861

    2,074,027

    1,920,226

    1,844,871

    Core deposits (12)

    $

    16,503,686

    16,340,763

    16,489,173

    16,076,859

    15,400,142

    14,750,211

    Core deposits to total funding (12)

     

    74.9%

    77.1%

    79.0%

    78.3%

    76.9%

    77.3%

    Risk-weighted assets

    $

    22,706,512

    22,001,959

    21,137,263

    20,705,547

    20,151,827

    19,286,101

    Number of offices

     

    114

    114

    114

    115

    115

    114

    Total core deposits per office

    $

    144,769

    143,340

    144,642

    139,799

    133,914

    129,388

    Total assets per full-time equivalent employee

    $

    11,241

    10,997

    10,897

    10,917

    10,911

    10,677

    Annualized revenues per full-time equivalent employee

    $

    441.0

    415.9

    427.5

    424.9

    419.9

    412.8

    Annualized expenses per full-time equivalent employee

    $

    216.9

    199.0

    206.2

    201.0

    202.3

    205.0

    Number of employees (full-time equivalent)

     

    2,361.0

    2,324.0

    2,297.0

    2,249.5

    2,198.5

    2,148.0

    Associate retention rate (13)

     

    93.0%

    92.8%

    92.3%

    91.1%

    89.6%

    89.9%

     

     

     

     

     

     

     

     

    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 30,
    2019

    March 31,
    2019

    June 30,
    2018

     

    June 30,
    2019

    June 30,
    2018

     

     

     

     

     

     

     

     

    Net interest income

    $

    188,918

    187,246

    182,236

     

    376,164

    356,707

     

     

     

     

     

     

     

     

    Noninterest income

     

    70,682

    51,063

    47,939

     

    121,745

    92,122

    Total revenues

     

    259,600

    238,309

    230,175

     

    497,909

    448,829

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

     

    4,466

    1,960

     

    6,426

    (30)

    Loss on sale of non-prime automobile portfolio

     

    1,536

     

    1,536

    Total revenues excluding the impact of adjustments noted above

     

    265,602

    240,269

    230,175

     

    505,871

    448,799

     

     

     

     

     

     

     

     

    Noninterest expense

     

    127,686

    114,051

    110,908

     

    241,737

    219,488

    Less: Other real estate (ORE) expense

     

    2,523

    246

    819

     

    2,769

    25

    Merger-related charges

     

    2,906

     

    8,259

    Branch consolidation

     

    3,189

     

    3,189

    Noninterest expense excluding the impact of adjustments noted above

     

    121,974

    113,805

    107,183

     

    235,779

    211,204

     

     

     

     

     

     

     

     

    Adjusted pre-tax pre-provision income(14)

    $

    143,628

    126,464

    122,992

     

    270,092

    237,595

     

     

     

     

     

     

     

     

    Efficiency ratio (4)

     

    49.19%

    47.86%

    48.18%

     

    48.55%

    48.90%

    Adjustments as noted above

     

    (3.27)%

    (0.49)%

    (1.61)%

     

    (1.94)%

    (1.84)%

    Efficiency ratio (excluding adjustments noted above)

     

    45.92%

    47.37%

    46.57%

     

    46.61%

    47.06%

     

     

     

     

     

     

     

     

    Total average assets

    $

    25,915,971

    25,049,954

    23,236,945

     

    25,485,355

    22,723,624

     

     

     

     

     

     

     

     

    Noninterest income to average assets

     

    1.09%

    0.83%

    0.83%

     

    0.96%

    0.82%

    Adjustments as noted above

     

    0.10%

    0.03%

    —%

     

    0.07%

    —%

    Noninterest income (excluding adjustments noted above) to average assets

     

    1.19%

    0.86%

    0.83%

     

    1.03%

    0.82%

     

     

     

     

     

     

     

     

    Noninterest expense to average assets

     

    1.98%

    1.85%

    1.91%

     

    1.91%

    1.95%

    Adjustments as noted above

     

    (0.09)%

    (0.01)%

    (0.06)%

     

    (0.04)%

    (0.08)%

    Noninterest expense (excluding adjustments noted above) to average assets

     

    1.89%

    1.84%

    1.85%

     

    1.87%

    1.87%

     

     

     

     

     

     

     

     

    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 30,
    2019

    March 31,
    2019

    June 30,
    2018

     

    June 30,
    2019

    June 30,
    2018

    Net income

    $

    100,321

    93,960

    86,865

     

    194,281

    170,375

    Merger-related charges

     

    2,906

     

    8,259

    Investment (gains) losses on sales of securities, net

     

    4,466

    1,960

     

    6,426

    (30)

    Sale of non-prime automobile portfolio

     

    1,536

     

    1,536

    ORE expense

     

    2,523

    246

    819

     

    2,769

    25

    Branch rationalization

     

    3,189

     

    3,189

    Tax effect on adjustments noted above (18)

     

    (3,062)

    (577)

    (974)

     

    (3,639)

    (2,158)

    Net income excluding adjustments noted above

    $

    108,973

    95,589

    89,616

     

    204,562

    176,471

     

     

     

     

     

     

     

     

    Basic earnings per share

    $

    1.31

    1.22

    1.13

     

    2.54

    2.21

    Adjustment due to merger-related charges

     

    0.04

     

    0.11

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

     

    0.06

    0.03

     

    0.08

    Adjustment due to sale of non-prime automobile portfolio

     

    0.02

     

    0.02

    Adjustment due to ORE expense

     

    0.04

    0.01

     

    0.04

    Adjustment due to branch consolidation

     

    0.04

     

    0.04

    Adjustment due to tax effect on adjustments noted above (18)

     

    (0.04)

    (0.01)

    (0.01)

     

    (0.05)

    (0.03)

    Basic earnings per share excluding adjustments noted above

     

    1.43

    1.24

    1.17

     

    2.67

    2.29

     

     

     

     

     

     

     

     

    Diluted earnings per share

    $

    1.31

    1.22

    1.12

     

    2.53

    2.20

    Adjustment due to merger-related charges

     

    0.04

     

    0.11

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

     

    0.06

    0.03

     

    0.08

    Adjustment due to sale of non-prime automobile portfolio

     

    0.02

     

    0.02

    Adjustment due to ORE expense

     

    0.03

    0.01

     

    0.04

    Adjustment due to branch consolidation

     

    0.04

     

    0.04

    Adjustment due to tax effect on adjustments noted above (18)

     

    (0.04)

    (0.01)

    (0.01)

     

    (0.05)

    (0.03)

    Diluted earnings per share excluding the adjustments noted above

    $

    1.42

    1.24

    1.16

     

    2.66

    2.28

     

     

     

     

     

     

     

     

    Noninterest expense per diluted share

    $

    1.67

    1.48

    1.43

     

    3.14

    2.84

    Adjustments as noted above

     

    (0.08)

    (0.05)

     

    (0.07)

    (0.11)

    Noninterest expense (excluding adjustments noted above) per diluted share

    $

    1.59

    1.48

    1.38

     

    3.07

    2.73

     

     

     

     

     

     

     

     

    Revenue per diluted share

    $

    3.39

    3.09

    2.97

     

    6.48

    5.80

    Adjustments as noted above

     

    0.08

    0.03

     

    0.10

    Revenue per diluted share (excluding adjustments noted above) per diluted share

    $

    3.47

    3.12

    2.97

     

    6.58

    5.80

     

     

     

     

     

     

     

     

    Equity method investment (17)

     

     

     

     

     

     

     

    Fee income from BHG, net of amortization

    $

    32,261

    13,290

    9,690

     

    45,551

    19,050

    Funding cost to support investment

     

    2,399

    2,379

    2,114

     

    4,779

    4,118

    Pre-tax impact of BHG

     

    29,862

    10,911

    7,576

     

    40,772

    14,932

    Income tax expense at statutory rates

     

    7,806

    2,852

    1,980

     

    10,658

    3,903

    Earnings attributable to BHG

    $

    22,056

    8,059

    5,596

     

    30,114

    11,029

     

     

     

     

     

     

     

     

    Basic earnings per share attributable to BHG

    $

    0.29

    0.10

    0.07

     

    0.39

    0.14

    Diluted earnings per share attributable to BHG

    $

    0.29

    0.10

    0.07

     

    0.39

    0.14

     

     

     

     

     

     

     

     

    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 30,
    2019

    March 31,
    2019

    June 30,
    2018

     

    June 30,
    2019

    June 30,
    2018

     

     

     

     

     

     

     

     

    Return on average assets

     

    1.55%

    1.52%

    1.50%

     

    1.54%

    1.51%

    Adjustments as noted above

     

    0.14%

    0.03%

    0.05%

     

    0.08%

    0.06%

    Return on average assets excluding adjustments noted above

     

    1.69%

    1.55%

    1.55%

     

    1.62%

    1.57%

     

     

     

     

     

     

     

     

    Tangible assets:

     

     

     

     

     

     

     

    Total assets

    $

    26,540,355

    25,557,858

    23,988,370

     

    26,540,355

    23,988,370

    Less: Goodwill

     

    (1,807,121)

    (1,807,121)

    (1,807,121)

     

    (1,807,121)

    (1,807,121)

    Core deposit and other intangible assets

     

    (41,578)

    (43,850)

    (51,353)

     

    (41,578)

    (51,353)

    Net tangible assets

    $

    24,691,656

    23,706,887

    22,129,896

     

    24,691,656

    22,129,896

     

     

     

     

     

     

     

     

    Tangible equity:

     

     

     

     

     

     

     

    Total stockholders' equity

    $

    4,176,361

    4,055,939

    3,826,677

     

    4,176,361

    3,826,677

    Less: Goodwill

     

    (1,807,121)

    (1,807,121)

    (1,807,121)

     

    (1,807,121)

    (1,807,121)

    Core deposit and other intangible assets

     

    (41,578)

    (43,850)

    (51,353)

     

    (41,578)

    (51,353)

    Net tangible common equity

    $

    2,327,662

    2,204,968

    1,968,203

     

    2,327,662

    1,968,203

     

     

     

     

     

     

     

     

    Ratio of tangible common equity to tangible assets

     

    9.43%

    9.30%

    8.89%

     

    9.43%

    8.89%

     

     

     

     

     

     

     

     

    Average tangible assets:

     

     

     

     

     

     

     

    Average assets

    $

    25,915,971

    25,049,954

    23,236,945

     

    25,485,355

    22,723,624

    Less: Average goodwill

     

    (1,807,121)

    (1,807,121)

    (1,807,850)

     

    (1,807,121)

    (1,807,952)

    Average core deposit and other intangible assets

     

    (43,025)

    (45,330)

    (53,018)

     

    (44,171)

    (54,342)

    Net average tangible assets

    $

    24,065,825

    23,197,503

    21,376,077

     

    23,634,063

    20,861,330

     

     

     

     

     

     

     

     

    Return on average assets

     

    1.55%

    1.52%

    1.50%

     

    1.54%

    1.51%

    Adjustment due to goodwill, core deposit and other intangible assets

     

    0.12%

    0.12%

    0.13%

     

    0.12%

    0.14%

    Return on average tangible assets

     

    1.67%

    1.64%

    1.63%

     

    1.66%

    1.65%

    Adjustments as noted above

     

    0.15%

    0.03%

    0.05%

     

    0.09%

    0.06%

    Return on average tangible assets excluding adjustments noted above

     

    1.82%

    1.67%

    1.68%

     

    1.75%

    1.71%

     

     

     

     

     

     

     

     

    Average tangible stockholders' equity:

     

     

     

     

     

     

     

    Average stockholders' equity

    $

    4,117,754

    4,017,375

    3,795,963

     

    4,067,842

    3,764,473

    Less: Average goodwill

     

    (1,807,121)

    (1,807,121)

    (1,807,850)

     

    (1,807,121)

    (1,807,952)

    Average core deposit and other intangible assets

     

    (43,025)

    (45,330)

    (53,018)

     

    (44,171)

    (54,342)

    Net average tangible common equity

    $

    2,267,608

    2,164,924

    1,935,095

     

    2,216,550

    1,902,179

     

     

     

     

     

     

     

     

    Return on average common equity

     

    9.77%

    9.49%

    9.18%

     

    9.63%

    9.13%

    Adjustment due to goodwill, core deposit and other intangible assets

     

    7.97%

    8.11%

    8.83%

     

    8.05%

    8.93%

    Return on average tangible common equity (1)

     

    17.74%

    17.60%

    18.01%

     

    17.68%

    18.06%

    Adjustments as noted above

     

    1.54%

    0.31%

    0.57%

     

    0.93%

    0.65%

    Return on average tangible common equity excluding adjustments noted above

     

    19.28%

    17.91%

    18.58%

     

    18.61%

    18.71%

     

     

     

     

     

     

     

     

    Total average assets

    $

    25,915,971

    25,049,954

    23,236,945

     

    25,485,355

    22,723,624

     

     

     

     

     

     

     

     

    Book value per common share at quarter end

    $

    54.29

    52.63

    49.15

     

    54.29

    49.15

    Adjustment due to goodwill, core deposit and other intangible assets

     

    (24.03)

    (24.02)

    (23.87)

     

    (24.03)

    (23.87)

    Tangible book value per common share at quarter end (9)

    $

    30.26

    28.61

    25.28

     

    30.26

    25.28

     

     

     

     

     

     

     

     

    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. Troubled debt restructurings include loans where the company, as a result of the borrower's financial difficulties, has granted a credit concession to the borrower (i.e., interest only payments for a significant period of time, extending the maturity of the loan, etc.). All of these loans continue to accrue interest at the contractual rate.

    6. Average risk ratings are based on an internal loan review system which assigns a numeric value of 1 to 10 for quarters ended prior to Dec. 31, 2018 and 10 to 100 for all subsequent periods to all loans to commercial entities based on their underlying risk characteristics as of the end of each quarter. The risk rating scale was changed to allow for granularity, if needed, in criticized and classified risk ratings to distinguish accrual status or structural loan issues. A "10" risk rating is assigned to credits that exhibit Excellent risk characteristics, "20" exhibit Very Good risk characteristics, "30" Good, "40" Satisfactory, "50" Acceptable or Average, "60" Watch List, "70" Criticized, "80" Classified or Substandard, "90" Doubtful and "100" Loss (which are charged-off immediately). Additionally, loans rated "80" or worse that are not nonperforming or restructured loans are considered potential problem loans. Generally, consumer loans are not subjected to internal risk ratings.

    7. 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.

    8. 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 stockholders' equity as a percentage of end of period assets.

    Tangible common equity to tangible assets - End of period total stockholders' equity less end of period goodwill, core deposit and other intangibles as a percentage of end of period assets.

    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 loan 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.

    9. Book value per share computed by dividing total stockholders' equity by common shares outstanding. Tangible book value per share computed by dividing total stockholder's equity, less goodwill, core deposit and other intangibles by common shares outstanding.

    10. Amounts are included in the statement of operations in "Gains on mortgage loans sold, net", net of commissions paid on such amounts.

    11. At fair value, based on information obtained from Pinnacle's third party broker/dealer for non-FDIC insured financial products and services.

    12. 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. Periods prior to the second quarter of 2018 have been restated to reflect regulatory changes that were adopted in the second quarter of 2018 that permit reciprocal deposits to be treated as core deposits if they otherwise qualify as such. 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.

    13. 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.

    14. Adjusted pre-tax, pre-provision income excludes the impact of other real estate expenses and income, investment gains and losses on sales of securities, merger-related charges, loss on the sale of our non-prime automobile portfolio and branch rationalization, as described above.

    15. 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.

    16. The dividend payout ratio is calculated as the sum of the annualized dividend rate divided by the trailing 12-months fully diluted earnings per share as of the dividend declaration date.

    17. 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.

    18. Tax effect calculated using the blended statutory rate of 26.14 percent.

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

     



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    PNFP Reports Diluted EPS of $1.31, ROAA of 1.55% and ROTCE of 17.74% For 2Q 2019 Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.31 for the quarter ended June 30, 2019, compared to net income per diluted common share of $1.12 for the quarter ended June 30, 2018, an increase …