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     121  0 Kommentare PNFP Reports 1Q24 Diluted EPS of $1.57

    Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.57 for the quarter ended March 31, 2024, compared to net income per diluted common share of $1.76 for the quarter ended March 31, 2023, a decrease of 10.8 percent.

    Several meaningful items impacted first quarter 2024 results. The firm’s allowance for credit losses increased to 1.12 percent of total loans at March 31, 2024, compared to 1.08 percent at Dec. 31, 2023. Although, key loan quality metrics like the potential problem loans to total loans ratio and the classified asset ratio remain better than many of the firm's peers and lower than where the firm has historically operated over the longer term, the firm determined additional reserves were needed to account for incremental weakness of one previously disclosed problem borrower and to better position the firm to navigate the credit implications of a higher-for-longer interest rate environment. Additionally, the firm recognized a mortgage servicing asset associated with its Freddie Mac Small Business Lending (SBL) platform of approximately $11.8 million, which has been reflected in other noninterest income. Lastly, in response to information provided by the FDIC during the quarter, the firm increased its other noninterest expense by $7.3 million for a FDIC special assessment. This is in addition to the $29.0 million that the company recognized in the fourth quarter of 2023.

    "Inflation appears to be more difficult to tame than the Fed had predicted," said M. Terry Turner, Pinnacle's President and Chief Executive Officer. "Regardless of the economic landscape, our focus continues to be on strengthening our balance sheet and growing our earnings and tangible book value, while continuing to take steps that we believe will position our firm for long-term growth.

    "We continued to execute our unique business model during the first quarter. We are reporting strong core earnings inclusive of a meaningful provision for credit losses. We recruited 37 new revenue producers during the quarter, including 14 in our newer markets of Atlanta, Washington D.C., Birmingham and Jacksonville. And as another demonstration of why we are so successful in hiring the best bankers in our markets, FORTUNE and Great Place to Work recognized our firm as No. 11 on their list of the 100 Best Companies to Work For in the United States. We have been on FORTUNE’s top 100 list for the last eight years, but this is our highest ranking, further demonstrating the staying power of our culture, even as we have become a larger, high-growth bank.

    "Our firm is uniquely positioned in what we believe are many of the best banking markets in the Southeast. As a result, combined with our distinctive operating model, we remain confident in our ability to generate long-term sustainable growth in loans, deposits and earnings in spite of the current economic volatility."

    BALANCE SHEET GROWTH AND LIQUIDITY:

    Total assets at March 31, 2024, were $48.9 billion, an increase of approximately $934.3 million from Dec. 31, 2023, and $3.8 billion from March 31, 2023, reflecting a year-over-year increase of 8.4 percent and a linked-quarter annualized increase of 7.8 percent, respectively. A further analysis of select balance sheet trends follows:

     

    Balances at

    Linked-
    Quarter
    Annualized
    % Change

    Balances at

    Year-over-Year
    % Change

    (dollars in thousands)

    March 31,
    2024

    December 31,
    2023

    March 31,
    2023

    Loans

    $

    33,162,873

    $

    32,676,091

    6.0

    %

    $

    30,297,871

    9.5

    %

    Securities

     

    7,371,847

     

    7,323,887

    2.6

    %

     

    6,878,831

    7.2

    %

    Other interest-earning assets

     

    3,195,211

     

    2,673,235

    78.1

    %

     

    3,201,938

    (0.2

    )%

    Total interest-earning assets

    $

    43,729,931

    $

    42,673,213

    9.9

    %

    $

    40,378,640

    8.3

    %

     

     

     

     

     

     

    Core deposits:

     

     

     

     

     

    Noninterest-bearing deposits

    $

    7,958,739

    $

    7,906,502

    2.6

    %

    $

    9,018,439

    (11.8

    )%

    Interest-bearing core deposits(1)

     

    26,679,871

     

    25,832,415

    13.1

    %

     

    23,035,672

    15.8

    %

    Noncore deposits and other funding(2)

     

    7,506,409

     

    7,573,489

    (3.5

    )%

     

    6,865,003

    9.3

    %

    Total funding

    $

    42,145,019

    $

    41,312,406

    8.1

    %

    $

    38,919,114

    8.3

    %

    (1):

    Interest-bearing core deposits are interest-bearing deposits, money market accounts and time deposits less than $250,000 including reciprocating time and money market deposits.

    (2):

    Noncore deposits and other funding consists of time deposits greater than $250,000, securities sold under agreements to repurchase, public funds, brokered deposits, FHLB advances and subordinated debt.

     

    Three months ended

     

    March 31,
    2024

    December 31,
    2023

    March 31,
    2023

    Average loan to deposit ratio

    84.73

    %

    84.05

    %

    83.97

    %

    Uninsured/uncollateralized deposits to total deposits(1)

    30.48

    %

    31.32

    %

    33.23

    %

    (1):

    Includes the effect of placement of deposits through the IntraFi network.

    • Approximately 46.5 percent of first quarter 2024 loan growth was related to commercial and industrial and owner-occupied commercial real estate categories, two segments the firm intends to continue to emphasize throughout the remainder of 2024.
    • On-balance sheet liquidity, defined as cash and cash equivalents plus unpledged securities, remained strong, totaling $7.6 billion as of March 31, 2024, representing a $646.7 million increase from the on-balance sheet liquidity level of $6.9 billion as of Dec. 31, 2023. Increased deposit inflows during the quarter contributed to the increase in other interest earning assets and are expected to be used to fund future loan growth of the firm.
    • Noninterest bearing deposits increased 2.6 percent on a linked-quarter annualized basis as of March 31, 2024, when compared to Dec. 31, 2023. In comparison to March 31, 2023, noninterest bearing deposits decreased by 11.8 percent. The average balance of the firm’s noninterest bearing accounts was $31,353 at March 31, 2024, compared to $31,603 at Dec. 31, 2023.

    "We are particularly pleased with our strong deposit growth during the first quarter, which grew $862.2 million in the quarter, a 9.0 percent linked-quarter annualized growth rate," Turner said. "Importantly, our end-of-period noninterest-bearing demand deposit accounts grew 2.6 percent linked-quarter annualized after having experienced declining demand deposit volumes for several quarters. During the first quarter, our loans grew at an annualized rate of 6.0 percent, which is slightly below what we expect for all of 2024. While we are benefited by operating in several of the best banking markets in the Southeast, our loan and deposit growth is primarily a result of the market share movement associated with our ongoing hiring in those markets over the last several years."

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

    Pre-tax, pre-provision net revenues (PPNR) for the three months ended March 31, 2024, were $185.8 million, a decrease of 2.2 percent from the $190.0 million recognized in the three months ended March 31, 2023.

     

    Three months ended

     

    March 31,

    (dollars in thousands)

    2024

    2023

    % change

    Revenues:

     

     

     

    Net interest income

    $

    318,034

     

    $

    312,231

    1.9

    %

    Noninterest income

     

    110,103

     

     

    89,529

    23.0

    %

    Total revenues

     

    428,137

     

     

    401,760

    6.6

    %

    Noninterest expense

     

    242,365

     

     

    211,727

    14.5

    %

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

     

    185,772

     

     

    190,033

    (2.2

    )%

    Adjustments:

     

     

     

    ORE expense (benefit)

     

    84

     

     

    99

    (15.2

    )%

    FDIC special assessment

     

    7,250

     

     

    NM

    Recognition of mortgage servicing asset

     

    (11,812

    )

     

    NM

    Adjusted PPNR

    $

    181,294

     

    $

    190,132

    (4.6

    )%

     

    Three months ended

     

    March 31,
    2024

    December 31,
    2023

    March 31,
    2023

    Net interest margin

    3.04

    %

    3.06

    %

    3.40

    %

    Efficiency ratio

    56.61

    %

    63.37

    %

    52.70

    %

    Return on average assets

    1.00

    %

    0.76

    %

    1.26

    %

    Return on average tangible common equity (TCE)

    12.11

    %

    9.53

    %

    15.43

    %

    Average loan to deposit ratio

    84.73

    %

    84.05

    %

    83.97

    %

    • Revenue per fully diluted common share was $5.60 for the first quarter of 2024, compared to $5.16 for the fourth quarter of 2023 and $5.28 for the first quarter of 2023, an increase of 6.1 percent year-over-year.
    • Net interest income for the first quarter of 2024, was $318.0 million, compared to $317.3 million for the fourth quarter of 2023 and $312.2 million for the first quarter of 2023, a year-over-year growth rate of 1.9 percent. Net interest margin was 3.04 percent for the first quarter of 2024, compared to 3.06 percent for the fourth quarter of 2023 and 3.40 percent for the first quarter of 2023.
    • Noninterest income for the first quarter of 2024, was $110.1 million, compared to $79.1 million for the fourth quarter of 2023 and $89.5 million for the first quarter of 2023, a year-over-year increase of 23.0 percent.
      • Wealth management revenues, which include investment, trust and insurance services, were $26.0 million for the first quarter of 2024, compared to $23.5 million for the fourth quarter of 2023 and $22.5 million for the first quarter of 2023, a year-over-year increase of 15.7 percent. The increase in wealth management revenues was attributable to several factors, but primarily is the result of an increase in capacity with more revenue producers and the placement of those producers in Pinnacle’s newer markets like Washington D.C., Birmingham and others.
      • During the first quarter of 2024, net gains from mortgage loans sold were $2.9 million, compared to $879,000 in the fourth quarter of 2023 and $2.1 million in the first quarter of 2023. Similar to wealth management, the increase in mortgage fee income was primarily attributable to increases in capacity with more originators in Pinnacle's newer markets.
      • Income from the firm's investment in Banker's Healthcare Group (BHG) was $16.0 million for the first quarter of 2024, compared to $14.4 million for the fourth quarter of 2023 and $19.1 million for the first quarter of 2023, a year-over-year decline of 16.0 percent.
        • BHG's loan originations decreased to $692 million in the first quarter of 2024, compared to $786 million in the fourth quarter of 2023 and $1.0 billion in the first quarter of 2023.
        • Loans sold to BHG's community bank partners were approximately $533 million in the first quarter of 2024, compared to approximately $446 million in the fourth quarter of 2023 and $704 million in the first quarter of 2023.
        • BHG increased its reserves for on-balance sheet loan losses to $306 million, or 10.3 percent of loans held for investment at March 31, 2024, compared to 9.3 percent at Dec. 31, 2023 and 5.2 percent at March 31, 2023. The year-over-year increase in reserves as a percentage of loans held for investment was impacted by BHG's adoption for lifetime credit losses associated with its implementation of the current expected credit loss (CECL) methodology on Oct. 1, 2023.
        • BHG increased its accrual for estimated losses attributable to loan substitutions and prepayments to $391 million, or 5.7 percent of the unpaid loan balances that were previously purchased by BHG's community bank network, at March 31, 2024, compared to 5.4 percent, or $357 million, at Dec. 31, 2023 and 5.81 percent, or $350 million, at March 31, 2023.
      • Other noninterest income increased $24.1 million between the first quarter of 2024 and the fourth quarter of 2023 and $17.6 million from the first quarter of 2023. Impacting other noninterest income was approximately $11.8 million associated with the aforementioned recognition of the SBL mortgage servicing asset, as well as increased income from the firm’s Bank Owned Life Insurance (BOLI) policies compared to the first quarter of 2023. In the fourth quarter of 2023, the firm incurred approximately $7.2 million in policy surrender charges and $9.1 million in tax penalties attributable to restructuring BOLI policies. The firm believes the reimbursement ("payback") period from the date of the restructuring should approximate 18 months.
    • Noninterest expense for the quarter ended March 31, 2024, was $242.4 million, compared to $251.2 million in the fourth quarter of 2023 and $211.7 million in the first quarter of 2023, reflecting a year-over-year increase of 14.5 percent.
      • Salaries and employee benefits were $146.0 million in the first quarter of 2024, compared to $133.3 million in the fourth quarter of 2023 and $135.7 million in the first quarter of 2023, reflecting a year-over-year increase of 7.6 percent.
        • Full-time equivalent associates increased to 3,386.5 at March 31, 2024 from 3,357.0 at Dec. 31, 2023 and 3,281.5 at March 31, 2023, a year-over-year increase of 3.2 percent.
        • Incentive costs in the first quarter of 2024 were approximately $1.7 million higher than the fourth quarter of 2023 and $1.1 million higher than the amounts recorded in the first quarter of 2023.
        • Employee benefits costs reflect the seasonality of payroll taxes, medical deductibles, and other benefits costs. Benefit costs in the first quarter of 2024 were approximately $5.5 million higher than the fourth quarter of 2023 and $898,000 higher than the amounts recorded in the first quarter of 2023.
      • Equipment and occupancy costs were $39.6 million in the first quarter of 2024, compared to $38.0 million in the fourth quarter of 2023 and $30.4 million in the first quarter of 2023, reflecting a year-over-year increase of 30.6 percent. Impacting the quarterly changes in equipment and occupancy expense between the first quarter of 2024 compared to the fourth quarter of 2023 was the impact of new equipment and facilities annual rent escalators on various properties and equipment that have been placed into service. Compared to the first quarter of 2023, several factors contributed to the increase of equipment and occupancy costs, including new equipment and facilities, rent escalators on various properties and the previously disclosed sale-leaseback transaction executed in the second quarter of 2023.
      • Noninterest expense categories, other than those specifically noted above, were $56.7 million in the first quarter of 2024, compared to $79.8 million in the fourth quarter of 2023 and $45.7 million in the first quarter of 2023, reflecting a year-over-year increase of 24.2 percent. Primarily impacting the quarterly changes in other noninterest expense between the fourth quarter of 2023 and first quarter of 2024 was the impact of a reduction in the amount of FDIC special assessment charges in the first quarter of 2024 compared to the fourth quarter of 2023. The special assessment also impacted the comparison of other noninterest expense to the first quarter of 2023, given there was no special assessment last year.

    "With the most recent CPI release, we have adjusted our forecast for Fed funds rate decreases from four to two with the first of those starting late in the third quarter of this year,” said Harold R. Carpenter, Pinnacle's Chief Financial Officer. "Therefore, we are modifying our net interest income outlook slightly for the year. Our belief is that we will experience 8 to 10 percent growth in net interest income for this year. As to fee income, we believe the strong start in the first quarter means our core fee revenues should be higher than originally anticipated for 2024. Accordingly, excluding the impact of BHG, the recognition of the $11.8 million of mortgage servicing rights in the first quarter of this year and, in the case of 2023, the $85.7 million gain on the sale of fixed assets as a result of the sale-leaseback transaction, $19.7 million in losses on sale of investments securities and $7.2 million in BOLI restructuring charges, we believe our growth in fee revenues should approximate 10 to 14 percent in 2024 over 2023.

    "We continue to estimate that BHG fee income should approximate a mid-single digit percentage increase in 2024 over the $85.4 million in 2023. BHG's first quarter was impacted by the successful completion of their ninth securitization issuance of approximately $300 million. This securitization was comprised completely of consumer loans with a yield difference between the borrower's coupon rate and the securitization borrowing rate of approximately 10.1 percent, one of the highest spreads for a securitization by BHG in its history, reflective of the significant amount of interest BHG received for the transaction. BHG's ability to access the capital markets to secure incremental funding through securitizations of its held-for-investment loan portfolio has contributed to additional flexibility for BHG to fund its operations.

    "Excluding the additional FDIC special assessment in the first quarter of 2024, our operating expense was in line with our expectations. We did reduce our anticipated incentive costs for the first quarter primarily as a result of increased provision expense triggered largely by the increase in our allowance for credit losses. We currently are accruing for payout on our annual cash incentive plan at approximately 80 percent of target, less than we had originally planned. Even through all of these matters, we are maintaining our expense outlook at $950 million to $975 million for the year, exclusive of the impact of the FDIC special assessments we incurred in the first quarter and any additional assessments the FDIC may decide to impose this year."

    CAPITAL AND SOUNDNESS:

     

    As of

     

    March 31,
    2024

    December 31,
    2023

    March 31,
    2023

    Shareholders' equity to total assets

     

    12.5

    %

     

    12.6

    %

     

    12.6

    %

    Tangible common equity to tangible assets

     

    8.5

    %

     

    8.6

    %

     

    8.3

    %

    Book value per common share

    $

    76.23

     

    $

    75.80

     

    $

    71.24

     

    Tangible book value per common share

    $

    51.98

     

    $

    51.38

     

    $

    46.75

     

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

     

    0.20

    %

     

    0.17

    %

     

    0.10

    %

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

     

    0.33

    %

     

    0.27

    %

     

    0.15

    %

    Classified asset ratio (Pinnacle Bank) (2)

     

    4.94

    %

     

    5.22

    %

     

    2.71

    %

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

     

    77.50

    %

     

    84.20

    %

     

    88.50

    %

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

     

    258.00

    %

     

    259.00

    %

     

    261.10

    %

    Allowance for credit losses (ACL) to total loans

     

    1.12

    %

     

    1.08

    %

     

    1.04

    %

    (1):

    Annualized net loan charge-offs to average loans ratios are computed by annualizing quarterly net loan charge-offs and dividing the result by average loans for the quarter.

    (2):

    Classified assets as a percentage of Tier 1 capital plus allowance for credit losses.

    (3):

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

    • The allowance and provision for credit losses both increased at March 31, 2024, over Dec. 31, 2023, and March 31, 2023, to account for incremental weakness of a certain borrower as well as better position the firm to navigate the credit implications of a higher-for-longer interest rate environment.
    • Nonperforming assets increased at March 31, 2024, over Dec. 31, 2023, and March 31, 2023, primarily as a result of downgrading of two loans, one in the Company's construction portfolio and another in its C&I portfolio, each experiencing cash flow challenges at this time.
    • Both of the firm’s ratios associated with construction and land development and CRE loans in comparison to total capital decreased from the prior quarter. Importantly, and consistent with the firm’s target of achieving a threshold of below 70 percent, the firm’s ratio of construction and land development in relation to total capital at March 31, 2024 showed continued progress and decreased to 77.5 percent.

    "Net charge-offs to average loans for the first quarter of 2024 increased during the quarter to 0.20 percent from 0.17 percent in the prior quarter," Carpenter said. "We also experienced modest increases in nonperforming loans in relation to total loans and, conversely, we experienced improvement in similar ratios for past dues and potential problem loans. Net charge-offs at 0.20 percent compare favorably to longer-term historical levels, as do our ratios for nonperforming assets, past dues and potential problem loans. That said, we strive to be diligent with respect to monitoring our entire loan portfolio. A higher-for-longer rate environment coupled with stubborn inflation has required banks to maintain a higher level of caution with respect to credit. Accordingly, we now estimate net charge-offs for the firm may range between 0.20 percent and 0.25 percent of average loans for 2024.

    "Also, during the quarter, we experienced an increase in book value per common share from $75.80 to $76.23, an annualized linked-quarter increase of 2.3 percent and an increase in tangible book value per common share from $51.38 at Dec. 31, 2023 to $51.98 at March 31, 2024, an annualized linked-quarter increase of 4.7 percent. As we've previously communicated, increasing our tangible book value per common share remains an important priority for our firm’s leadership."

    WEBCAST AND CONFERENCE CALL INFORMATION

    Pinnacle will host a webcast and conference call at 8:30 a.m. CDT on April 23, 2024, to discuss first quarter 2024 results and other matters. To access the call for audio only, please call 1-877-209-7255. For the presentation and streaming audio, please access the webcast on the investor relations page of Pinnacle's website at www.pnfp.com.

    For those unable to participate in the webcast, it will be archived on the investor relations page of Pinnacle's website at www.pnfp.com for 90 days following the presentation.

    Pinnacle Financial Partners provides a full range of banking, investment, trust, mortgage and insurance products and services designed for businesses and their owners and individuals interested in a comprehensive relationship with their financial institution. The firm is the No. 1 and fastest growing bank in the Nashville-Murfreesboro-Franklin MSA, according to 2023 deposit data from the FDIC. Pinnacle is No. 11 on the 2024 list of 100 Best Companies to Work For in the U.S., its eighth consecutive appearance and was recognized by American Banker as one of America's Best Banks to Work For 11 years in a row and No. 1 among banks with more than $10 billion in assets in 2023.

    Pinnacle Bank owns a 49 percent interest in Bankers Healthcare Group (BHG), which provides innovative, hassle-free financial solutions to healthcare practitioners and other professionals. Great Place to Work and FORTUNE ranked BHG No. 4 on its 2021 list of Best Workplaces in New York State in the small/medium business category.

    The firm began operations in a single location in downtown Nashville, TN in October 2000 and has since grown to approximately $48.9 billion in assets as of March 31, 2024. As the second-largest bank holding company in Tennessee, Pinnacle operates in several primarily urban markets across the Southeast.

    Additional information concerning Pinnacle, which is included in the Nasdaq Financial-100 Index, can be accessed at www.pnfp.com.

    Forward-Looking Statements

    All statements, other than statements of historical fact, included in this press release, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "expect," "anticipate," "intend," "may," "should," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: (i) deterioration in the financial condition of borrowers of Pinnacle Bank and its subsidiaries or BHG, including as a result of the negative impact of inflationary pressures and challenging economic conditions on our and BHG's customers and their businesses, resulting in significant increases in loan losses and provisions for those losses and, in the case of BHG, substitutions; (ii) fluctuations or differences in interest rates on loans or deposits from those that Pinnacle Financial is modeling or anticipating, including as a result of Pinnacle Bank's inability to better match deposit rates with the changes in the short-term rate environment, or that affect the yield curve; (iii) the sale of investment securities in a loss position before their value recovers, including as a result of asset liability management strategies or in response to liquidity needs; (iv) adverse conditions in the national or local economies including in Pinnacle Financial's markets throughout the Southeast region of the United States, particularly in commercial and residential real estate markets; (v) the inability of Pinnacle Financial, or entities in which it has significant investments, like BHG, to maintain the long-term historical growth rate of its, or such entities', loan portfolio; (vi) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits, including during times when Pinnacle Bank is seeking to limit the rates it pays on deposits or uncertainty exists in the financial services sector; (vii) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (viii) effectiveness of Pinnacle Financial's asset management activities in improving, resolving or liquidating lower-quality assets; (ix) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on Pinnacle Financial’s results, including as a result of the negative impact to net interest margin from rising deposit and other funding costs; (x) the results of regulatory examinations of Pinnacle Financial, Pinnacle Bank or BHG, or companies with whom they do business; (xi) BHG's ability to profitably grow its business and successfully execute on its business plans; (xii) risks of expansion into new geographic or product markets; (xiii) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including goodwill or other intangible assets; (xiv) the ineffectiveness of Pinnacle Bank's hedging strategies, or the unexpected counterparty failure or hedge failure of the underlying hedges; (xv) reduced ability to attract additional financial advisors (or failure of such advisors to cause their clients to switch to Pinnacle Bank), to retain financial advisors (including as a result of the competitive environment for associates) or otherwise to attract customers from other financial institutions; (xvi) deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xvii) inability to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies, required capital maintenance levels or regulatory requests or directives, particularly if Pinnacle Bank's level of applicable commercial real estate loans were to exceed percentage levels of total capital in guidelines recommended by its regulators; (xviii) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xix) the vulnerability of Pinnacle Bank's network and online banking portals, and the systems of parties with whom Pinnacle Bank contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (xx) the possibility of increased compliance and operational costs as a result of increased regulatory oversight (including by the Consumer Financial Protection Bureau), including oversight of companies in which Pinnacle Financial or Pinnacle Bank have significant investments, like BHG, and the development of additional banking products for Pinnacle Bank's corporate and consumer clients; (xxi) Pinnacle Financial's ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions; (xxii) difficulties and delays in integrating acquired businesses or fully realizing costs savings and other benefits from acquisitions; (xxiii) the risks associated with Pinnacle Bank being a minority investor in BHG, including the risk that the owners of a majority of the equity interests in BHG decide to sell the company or all or a portion of their ownership interests in BHG (triggering a similar sale by Pinnacle Bank); (xxiv) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, like BHG, including regulatory or legislative developments; (xxv) fluctuations in the valuations of Pinnacle Financial's equity investments and the ultimate success of such investments; (xxvi) the availability of and access to capital; (xxvii) adverse results (including costs, fines, reputational harm, inability to obtain necessary approvals and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions involving Pinnacle Financial, Pinnacle Bank or BHG; and (xxviii) general competitive, economic, political and market conditions. Additional factors which could affect the forward looking statements can be found in Pinnacle Financial's Annual Report on Form 10-K for the year ended December 31, 2023, and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC and available on the SEC's website at http://www.sec.gov. Pinnacle Financial disclaims any obligation to update or revise any forward-looking statements contained in this press release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise.

    Non-GAAP Financial Matters

    This release contains certain non-GAAP financial measures, including, without limitation, total revenues, net income to common shareholders, earnings per diluted common share, revenue per diluted common share, PPNR, efficiency ratio, noninterest expense, noninterest income and the ratio of noninterest expense to average assets, excluding in certain instances the impact of expenses related to other real estate owned, gains or losses on sale of investment securities, gains associated with the sale-leaseback transaction completed in the second quarter of 2023, losses on the restructuring of certain BOLI contracts, charges related to the FDIC special assessment, income associated with the recognition of a mortgage servicing asset in the first quarter of 2024 and other matters for the accounting periods presented. This release may also contain certain other non-GAAP capital ratios and performance measures that exclude the impact of goodwill and core deposit intangibles associated with Pinnacle Financial's acquisitions of BNC, Avenue Bank, Magna Bank, CapitalMark Bank & Trust, Mid-America Bancshares, Inc., Cavalry Bancorp, Inc. and other acquisitions which collectively are less material to the non-GAAP measure as well as the impact of Pinnacle Financial's Series B Preferred Stock. The presentation of the non-GAAP financial information is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Because non-GAAP financial measures presented in this release are not measurements determined in accordance with GAAP and are susceptible to varying calculations, these non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures presented by other companies.

    Pinnacle Financial believes that these non-GAAP financial measures facilitate making period-to-period comparisons and are meaningful indications of its operating performance. In addition, because intangible assets such as goodwill and the core deposit intangible, and the other items excluded each vary extensively from company to company, Pinnacle Financial believes that the presentation of this information allows investors to more easily compare Pinnacle Financial's results to the results of other companies. Pinnacle Financial's management utilizes this non-GAAP financial information to compare Pinnacle Financial's operating performance for 2024 versus certain periods in 2023 and to internally prepared projections.

    PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

    CONSOLIDATED BALANCE SHEETS – UNAUDITED

     

     

     

     

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

    March 31, 2024

    December 31, 2023

    March 31, 2023

    ASSETS

     

     

     

    Cash and noninterest-bearing due from banks

    $

    175,826

     

    $

    228,620

     

    $

    209,255

     

    Restricted cash

     

    58,285

     

     

    86,873

     

     

    13,049

     

    Interest-bearing due from banks

     

    2,472,250

     

     

    1,914,856

     

     

    2,597,172

     

    Cash and cash equivalents

     

    2,706,361

     

     

    2,230,349

     

     

    2,819,476

     

    Securities purchased with agreement to resell

     

    554,022

     

     

    558,009

     

     

    509,872

     

    Securities available-for-sale, at fair value

     

    4,378,718

     

     

    4,317,530

     

     

    3,825,203

     

    Securities held-to-maturity (fair value of $2.7 billion, $2.8 billion, and $2.8 billion, net of allowance for credit losses of $1.7 million, $1.7 million, and $1.9 million at March 31, 2024, Dec. 31, 2023, and March 31, 2023, respectively)

     

    2,993,129

     

     

    3,006,357

     

     

    3,053,628

     

    Consumer loans held-for-sale

     

    104,586

     

     

    104,217

     

     

    58,758

     

    Commercial loans held-for-sale

     

    6,068

     

     

    9,280

     

     

    23,087

     

    Loans

     

    33,162,873

     

     

    32,676,091

     

     

    30,297,871

     

    Less allowance for credit losses

     

    (371,337

    )

     

    (353,055

    )

     

    (313,841

    )

    Loans, net

     

    32,791,536

     

     

    32,323,036

     

     

    29,984,030

     

    Premises and equipment, net

     

    265,579

     

     

    256,877

     

     

    354,713

     

    Equity method investment

     

    457,657

     

     

    445,223

     

     

    438,303

     

    Accrued interest receivable

     

    219,887

     

     

    217,491

     

     

    143,965

     

    Goodwill

     

    1,846,973

     

     

    1,846,973

     

     

    1,846,973

     

    Core deposits and other intangible assets

     

    25,881

     

     

    27,465

     

     

    32,761

     

    Other real estate owned

     

    2,766

     

     

    3,937

     

     

    7,802

     

    Other assets

     

    2,541,033

     

     

    2,613,139

     

     

    2,021,016

     

    Total assets

    $

    48,894,196

     

    $

    47,959,883

     

    $

    45,119,587

     

    LIABILITIES AND SHAREHOLDERS' EQUITY

     

     

     

    Deposits:

     

     

     

    Noninterest-bearing

    $

    7,958,739

     

    $

    7,906,502

     

    $

    9,018,439

     

    Interest-bearing

     

    12,178,471

     

     

    11,365,349

     

     

    8,944,353

     

    Savings and money market accounts

     

    14,761,573

     

     

    14,427,206

     

     

    14,136,850

     

    Time

     

    4,503,242

     

     

    4,840,753

     

     

    4,078,911

     

    Total deposits

     

    39,402,025

     

     

    38,539,810

     

     

    36,178,553

     

    Securities sold under agreements to repurchase

     

    201,418

     

     

    209,489

     

     

    149,777

     

    Federal Home Loan Bank advances

     

    2,116,417

     

     

    2,138,169

     

     

    2,166,508

     

    Subordinated debt and other borrowings

     

    425,159

     

     

    424,938

     

     

    424,276

     

    Accrued interest payable

     

    58,069

     

     

    66,967

     

     

    31,728

     

    Other liabilities

     

    587,257

     

     

    544,722

     

     

    484,617

     

    Total liabilities

     

    42,790,345

     

     

    41,924,095

     

     

    39,435,459

     

    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, 2024, Dec. 31, 2023, and March 31, 2023, respectively

     

    217,126

     

     

    217,126

     

     

    217,126

     

    Common stock, par value $1.00; 180.0 million shares authorized; 77.2 million, 76.8 million and 76.7 million shares issued and outstanding at March 31, 2024, Dec. 31, 2023, and March 31, 2023, respectively

     

    77,219

     

     

    76,767

     

     

    76,739

     

    Additional paid-in capital

     

    3,100,817

     

     

    3,109,493

     

     

    3,079,020

     

    Retained earnings

     

    2,887,804

     

     

    2,784,927

     

     

    2,458,006

     

    Accumulated other comprehensive loss, net of taxes

     

    (179,115

    )

     

    (152,525

    )

     

    (146,763

    )

    Total shareholders' equity

     

    6,103,851

     

     

    6,035,788

     

     

    5,684,128

     

    Total liabilities and shareholders' equity

    $

    48,894,196

     

    $

    47,959,883

     

    $

    45,119,587

     

    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, 2024

    December 31, 2023

    March 31, 2023

    Interest income:

     

     

     

    Loans, including fees

    $

    541,199

     

    $

    530,604

     

    $

    431,902

     

    Securities

     

     

     

    Taxable

     

    44,470

     

     

    42,458

     

     

    29,358

     

    Tax-exempt

     

    24,600

     

     

    25,035

     

     

    23,802

     

    Federal funds sold and other

     

    40,214

     

     

    46,699

     

     

    20,977

     

    Total interest income

     

    650,483

     

     

    644,796

     

     

    506,039

     

    Interest expense:

     

     

     

    Deposits

     

    300,968

     

     

    297,556

     

     

    176,589

     

    Securities sold under agreements to repurchase

     

    1,399

     

     

    1,295

     

     

    595

     

    FHLB advances and other borrowings

     

    30,082

     

     

    28,693

     

     

    16,624

     

    Total interest expense

     

    332,449

     

     

    327,544

     

     

    193,808

     

    Net interest income

     

    318,034

     

     

    317,252

     

     

    312,231

     

    Provision for credit losses

     

    34,497

     

     

    16,314

     

     

    18,767

     

    Net interest income after provision for credit losses

     

    283,537

     

     

    300,938

     

     

    293,464

     

    Noninterest income:

     

     

     

    Service charges on deposit accounts

     

    13,439

     

     

    12,660

     

     

    11,718

     

    Investment services

     

    14,751

     

     

    13,410

     

     

    11,595

     

    Insurance sales commissions

     

    3,852

     

     

    3,072

     

     

    4,464

     

    Gains on mortgage loans sold, net

     

    2,879

     

     

    879

     

     

    2,053

     

    Investment gains on sales, net

     

     

     

    14

     

     

     

    Trust fees

     

    7,415

     

     

    6,987

     

     

    6,429

     

    Income from equity method investment

     

    16,035

     

     

    14,432

     

     

    19,079

     

    Gain on sale of fixed assets

     

    58

     

     

    102

     

     

    135

     

    Other noninterest income

     

    51,674

     

     

    27,532

     

     

    34,056

     

    Total noninterest income

     

    110,103

     

     

    79,088

     

     

    89,529

     

    Noninterest expense:

     

     

     

    Salaries and employee benefits

     

    146,010

     

     

    133,333

     

     

    135,708

     

    Equipment and occupancy

     

    39,646

     

     

    38,021

     

     

    30,353

     

    Other real estate, net

     

    84

     

     

    125

     

     

    99

     

    Marketing and other business development

     

    6,125

     

     

    6,829

     

     

    5,942

     

    Postage and supplies

     

    2,771

     

     

    2,840

     

     

    2,819

     

    Amortization of intangibles

     

    1,584

     

     

    1,751

     

     

    1,794

     

    Other noninterest expense

     

    46,145

     

     

    68,269

     

     

    35,012

     

    Total noninterest expense

     

    242,365

     

     

    251,168

     

     

    211,727

     

    Income before income taxes

     

    151,275

     

     

    128,858

     

     

    171,266

     

    Income tax expense

     

    27,331

     

     

    33,879

     

     

    33,995

     

    Net income

     

    123,944

     

     

    94,979

     

     

    137,271

     

    Preferred stock dividends

     

    (3,798

    )

     

    (3,798

    )

     

    (3,798

    )

    Net income available to common shareholders

    $

    120,146

     

    $

    91,181

     

    $

    133,473

     

    Per share information:

     

     

     

    Basic net income per common share

    $

    1.58

     

    $

    1.20

     

    $

    1.76

     

    Diluted net income per common share

    $

    1.57

     

    $

    1.19

     

    $

    1.76

     

    Weighted average common shares outstanding:

     

     

     

    Basic

     

    76,278,453

     

     

    76,068,016

     

     

    75,921,282

     

    Diluted

     

    76,428,885

     

     

    76,823,991

     

     

    76,042,328

     

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

     

    PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

    (Unaudited)

     

    (dollars and shares in thousands)

    Preferred

    Stock

    Amount

    Common Stock

    Additional Paid-in Capital

    Retained Earnings

    Accumulated Other Comp. Income (Loss), net

    Total Shareholders' Equity

     

    Shares

    Amounts

    Balance at December 31, 2022

    $

    217,126

    76,454

     

    $

    76,454

     

    $

    3,074,867

     

    $

    2,341,706

     

    $

    (190,761

    )

    $

    5,519,392

     

    Exercise of employee common stock options & related tax benefits

     

    40

     

     

    40

     

     

    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 restricted stock unit (RSU) and performance stock unit (PSU) agreements, net of shares withheld for taxes & related tax benefits

     

    93

     

     

    93

     

     

    (3,738

    )

     

     

     

     

     

    (3,645

    )

    Compensation expense for restricted shares & performance stock units

     

     

     

     

     

    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

     

     

     

     

     

     

     

     

     

    Balance at December 31, 2023

    $

    217,126

    76,767

     

    $

    76,767

     

    $

    3,109,493

     

    $

    2,784,927

     

    $

    (152,525

    )

    $

    6,035,788

     

    Exercise of employee common stock options & related tax benefits

     

     

     

     

     

     

     

     

     

     

     

     

    Preferred dividends paid ($16.88 per share)

     

     

     

     

     

     

     

    (3,798

    )

     

     

     

    (3,798

    )

    Common dividends paid ($0.22 per share)

     

     

     

     

     

     

     

    (17,269

    )

     

     

     

    (17,269

    )

    Issuance of restricted common shares, net of forfeitures

     

    190

     

     

    190

     

     

    (190

    )

     

     

     

     

     

     

    Restricted shares withheld for taxes & related tax benefits

     

    (49

    )

     

    (49

    )

     

    (4,088

    )

     

     

     

     

     

    (4,137

    )

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

     

    311

     

     

    311

     

     

    (14,738

    )

     

     

     

     

     

    (14,427

    )

    Compensation expense for restricted shares & performance stock units

     

     

     

     

     

    10,340

     

     

     

     

     

     

    10,340

     

    Net income

     

     

     

     

     

     

     

    123,944

     

     

     

     

    123,944

     

    Other comprehensive loss

     

     

     

     

     

     

     

     

     

    (26,590

    )

     

    (26,590

    )

    Balance at March 31, 2024

    $

    217,126

    77,219

     

    $

    77,219

     

    $

    3,100,817

     

    $

    2,887,804

     

    $

    (179,115

    )

    $

    6,103,851

     

     

    PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

    SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

     

     

     

     

     

     

     

    (dollars in thousands)

    March

    December

    September

    June

    March

    December

    2024

    2023

    2023

    2023

    2023

    2022

    Balance sheet data, at quarter end:

     

     

     

     

     

     

    Commercial and industrial loans

    $

    11,893,198

     

    11,666,691

     

    11,307,611

     

    10,983,911

     

    10,723,327

     

    10,241,362

     

    Commercial real estate - owner occupied loans

     

    4,044,973

     

    4,044,896

     

    3,944,616

     

    3,845,359

     

    3,686,796

     

    3,587,257

     

    Commercial real estate - investment loans

     

    6,138,711

     

    5,929,595

     

    5,957,426

     

    5,682,652

     

    5,556,484

     

    5,277,454

     

    Commercial real estate - multifamily and other loans

     

    1,924,931

     

    1,605,899

     

    1,490,184

     

    1,488,236

     

    1,331,249

     

    1,265,165

     

    Consumer real estate - mortgage loans

     

    4,828,416

     

    4,851,531

     

    4,768,780

     

    4,692,673

     

    4,531,285

     

    4,435,046

     

    Construction and land development loans

     

    3,818,334

     

    4,041,081

     

    3,942,143

     

    3,904,774

     

    3,909,024

     

    3,679,498

     

    Consumer and other loans

     

    514,310

     

    536,398

     

    532,524

     

    555,685

     

    559,706

     

    555,823

     

    Total loans

     

    33,162,873

     

    32,676,091

     

    31,943,284

     

    31,153,290

     

    30,297,871

     

    29,041,605

     

    Allowance for credit losses

     

    (371,337

    )

    (353,055

    )

    (346,192

    )

    (337,459

    )

    (313,841

    )

    (300,665

    )

    Securities

     

    7,371,847

     

    7,323,887

     

    6,882,276

     

    6,623,457

     

    6,878,831

     

    6,637,920

     

    Total assets

     

    48,894,196

     

    47,959,883

     

    47,523,790

     

    46,875,982

     

    45,119,587

     

    41,970,021

     

    Noninterest-bearing deposits

     

    7,958,739

     

    7,906,502

     

    8,324,325

     

    8,436,799

     

    9,018,439

     

    9,812,744

     

    Total deposits

     

    39,402,025

     

    38,539,810

     

    38,295,809

     

    37,722,661

     

    36,178,553

     

    34,961,238

     

    Securities sold under agreements to repurchase

     

    201,418

     

    209,489

     

    195,999

     

    163,774

     

    149,777

     

    194,910

     

    FHLB advances

     

    2,116,417

     

    2,138,169

     

    2,110,598

     

    2,200,917

     

    2,166,508

     

    464,436

     

    Subordinated debt and other borrowings

     

    425,159

     

    424,938

     

    424,718

     

    424,497

     

    424,276

     

    424,055

     

    Total shareholders' equity

     

    6,103,851

     

    6,035,788

     

    5,837,641

     

    5,843,759

     

    5,684,128

     

    5,519,392

     

    Balance sheet data, quarterly averages:

     

     

     

     

     

     

    Total loans

    $

    33,041,954

     

    32,371,506

     

    31,529,854

     

    30,882,205

     

    29,633,640

     

    28,402,197

     

    Securities

     

    7,307,201

     

    6,967,488

     

    6,801,285

     

    6,722,247

     

    6,765,126

     

    6,537,262

     

    Federal funds sold and other

     

    3,274,062

     

    3,615,908

     

    4,292,956

     

    3,350,705

     

    2,100,757

     

    1,828,588

     

    Total earning assets

     

    43,623,217

     

    42,954,902

     

    42,624,095

     

    40,955,157

     

    38,499,523

     

    36,768,047

     

    Total assets

     

    48,311,260

     

    47,668,519

     

    47,266,199

     

    45,411,961

     

    42,983,854

     

    41,324,251

     

    Noninterest-bearing deposits

     

    7,962,217

     

    8,342,572

     

    8,515,733

     

    8,599,781

     

    9,332,317

     

    10,486,233

     

    Total deposits

     

    38,995,709

     

    38,515,560

     

    38,078,665

     

    36,355,859

     

    35,291,775

     

    34,177,281

     

    Securities sold under agreements to repurchase

     

    210,888

     

    202,601

     

    184,681

     

    162,429

     

    219,082

     

    199,610

     

    FHLB advances

     

    2,214,489

     

    2,112,809

     

    2,132,638

     

    2,352,045

     

    1,130,356

     

    701,813

     

    Subordinated debt and other borrowings

     

    428,281

     

    426,999

     

    426,855

     

    426,712

     

    426,564

     

    427,503

     

    Total shareholders' equity

     

    6,082,616

     

    5,889,075

     

    5,898,196

     

    5,782,239

     

    5,605,604

     

    5,433,274

     

    Statement of operations data, for the three months ended:

    Interest income

    $

    650,483

     

    644,796

     

    627,294

     

    575,239

     

    506,039

     

    451,178

     

    Interest expense

     

    332,449

     

    327,544

     

    310,052

     

    259,846

     

    193,808

     

    131,718

     

    Net interest income

     

    318,034

     

    317,252

     

    317,242

     

    315,393

     

    312,231

     

    319,460

     

    Provision for credit losses

     

    34,497

     

    16,314

     

    26,826

     

    31,689

     

    18,767

     

    24,805

     

    Net interest income after provision for credit losses

     

    283,537

     

    300,938

     

    290,416

     

    283,704

     

    293,464

     

    294,655

     

    Noninterest income

     

    110,103

     

    79,088

     

    90,797

     

    173,839

     

    89,529

     

    82,321

     

    Noninterest expense

     

    242,365

     

    251,168

     

    213,233

     

    211,641

     

    211,727

     

    202,047

     

    Income before income taxes

     

    151,275

     

    128,858

     

    167,980

     

    245,902

     

    171,266

     

    174,929

     

    Income tax expense

     

    27,331

     

    33,879

     

    35,377

     

    48,603

     

    33,995

     

    37,082

     

    Net income

     

    123,944

     

    94,979

     

    132,603

     

    197,299

     

    137,271

     

    137,847

     

    Preferred stock dividends

     

    (3,798

    )

    (3,798

    )

    (3,798

    )

    (3,798

    )

    (3,798

    )

    (3,798

    )

    Net income available to common shareholders

    $

    120,146

     

    91,181

     

    128,805

     

    193,501

     

    133,473

     

    134,049

     

    Profitability and other ratios:

     

     

     

     

     

     

    Return on avg. assets (1)

     

    1.00

    %

    0.76

    %

    1.08

    %

    1.71

    %

    1.26

    %

    1.29

    %

    Return on avg. equity (1)

     

    7.94

    %

    6.14

    %

    8.66

    %

    13.42

    %

    9.66

    %

    9.79

    %

    Return on avg. common equity (1)

     

    8.24

    %

    6.38

    %

    9.00

    %

    13.95

    %

    10.05

    %

    10.20

    %

    Return on avg. tangible common equity (1)

     

    12.11

    %

    9.53

    %

    13.43

    %

    21.06

    %

    15.43

    %

    15.95

    %

    Common stock dividend payout ratio (14)

     

    12.59

    %

    12.26

    %

    11.35

    %

    11.04

    %

    12.07

    %

    12.26

    %

    Net interest margin (2)

     

    3.04

    %

    3.06

    %

    3.06

    %

    3.20

    %

    3.40

    %

    3.60

    %

    Noninterest income to total revenue (3)

     

    25.72

    %

    19.95

    %

    22.25

    %

    35.53

    %

    22.28

    %

    20.49

    %

    Noninterest income to avg. assets (1)

     

    0.92

    %

    0.66

    %

    0.76

    %

    1.54

    %

    0.84

    %

    0.79

    %

    Noninterest exp. to avg. assets (1)

     

    2.02

    %

    2.09

    %

    1.79

    %

    1.87

    %

    2.00

    %

    1.94

    %

    Efficiency ratio (4)

     

    56.61

    %

    63.37

    %

    52.26

    %

    43.26

    %

    52.70

    %

    50.29

    %

    Avg. loans to avg. deposits

     

    84.73

    %

    84.05

    %

    82.80

    %

    84.94

    %

    83.97

    %

    83.10

    %

    Securities to total assets

     

    15.08

    %

    15.27

    %

    14.48

    %

    14.13

    %

    15.25

    %

    15.82

    %

    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, 2024

     

    March 31, 2023

     

    Average
    Balances

    Interest

    Rates/
    Yields

     

    Average
    Balances

    Interest

    Rates/
    Yields

    Interest-earning assets

     

     

     

     

     

     

     

    Loans (1) (2)

    $

    33,041,954

    $

    541,199

    6.67

    %

     

    $

    29,633,640

    $

    431,902

     

    6.00

    %

    Securities

     

     

     

     

     

     

     

    Taxable

     

    3,919,534

     

    44,470

    4.56

    %

     

     

    3,508,946

     

    29,358

     

    3.39

    %

    Tax-exempt (2)

     

    3,387,667

     

    24,600

    3.48

    %

     

     

    3,256,180

     

    23,802

     

    3.54

    %

    Interest-bearing due from banks

     

    2,476,800

     

    32,753

    5.32

    %

     

     

    1,392,492

     

    15,941

     

    4.64

    %

    Resell agreements

     

    543,788

     

    3,858

    2.85

    %

     

     

    512,660

     

    3,329

     

    2.63

    %

    Federal funds sold

     

     

    %

     

     

     

    (9

    )

    %

    Other

     

    253,474

     

    3,603

    5.72

    %

     

     

    195,605

     

    1,716

     

    3.56

    %

    Total interest-earning assets

     

    43,623,217

    $

    650,483

    6.11

    %

     

     

    38,499,523

    $

    506,039

     

    5.45

    %

    Nonearning assets

     

     

     

     

     

     

     

    Intangible assets

     

    1,873,871

     

     

     

     

    1,880,890

     

     

    Other nonearning assets

     

    2,814,172

     

     

     

     

    2,603,441

     

     

    Total assets

    $

    48,311,260

     

     

     

    $

    42,983,854

     

     

     

     

     

     

     

     

     

     

    Interest-bearing liabilities

     

     

     

     

     

     

     

    Interest-bearing deposits:

     

     

     

     

     

     

     

    Interest checking

     

    11,567,773

     

    112,728

    3.92

    %

     

     

    7,793,823

     

    52,474

     

    2.73

    %

    Savings and money market

     

    14,608,687

     

    134,752

    3.71

    %

     

     

    14,377,996

     

    97,519

     

    2.75

    %

    Time

     

    4,857,032

     

    53,488

    4.43

    %

     

     

    3,787,639

     

    26,596

     

    2.85

    %

    Total interest-bearing deposits

     

    31,033,492

     

    300,968

    3.90

    %

     

     

    25,959,458

     

    176,589

     

    2.76

    %

    Securities sold under agreements to repurchase

     

    210,888

     

    1,399

    2.67

    %

     

     

    219,082

     

    595

     

    1.10

    %

    Federal Home Loan Bank advances

     

    2,214,489

     

    24,120

    4.38

    %

     

     

    1,130,356

     

    10,970

     

    3.94

    %

    Subordinated debt and other borrowings

     

    428,281

     

    5,962

    5.60

    %

     

     

    426,564

     

    5,654

     

    5.38

    %

    Total interest-bearing liabilities

     

    33,887,150

     

    332,449

    3.95

    %

     

     

    27,735,460

     

    193,808

     

    2.83

    %

    Noninterest-bearing deposits

     

    7,962,217

     

     

     

     

    9,332,317

     

     

     

    Total deposits and interest-bearing liabilities

     

    41,849,367

    $

    332,449

    3.20

    %

     

     

    37,067,777

    $

    193,808

     

    2.12

    %

    Other liabilities

     

    379,277

     

     

     

     

    310,473

     

     

    Shareholders' equity

     

    6,082,616

     

     

     

     

    5,605,604

     

     

    Total liabilities and shareholders' equity

    $

    48,311,260

     

     

     

    $

    42,983,854

     

     

    Net interest income

     

    $

    318,034

     

     

     

    $

    312,231

     

     

    Net interest spread (3)

     

     

    2.16

    %

     

     

     

    2.61

    %

    Net interest margin (4)

     

     

    3.04

    %

     

     

     

    3.40

    %

     

     

     

     

     

     

     

     

    (1) Average balances of nonperforming loans are included in the above amounts.

    (2) Yields computed on tax-exempt instruments on a tax equivalent basis and included $11.8 million of taxable equivalent income for the three months ended March 31, 2024 compared to $10.9 million for the three months ended March 31, 2023. The tax-exempt benefit has been reduced by the projected impact of tax-exempt income that will be disallowed pursuant to IRS Regulations as of and for the then current period presented.

    (3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the three months ended March 31, 2024 would have been 2.91% compared to a net interest spread of 3.32% for the three months ended March 31, 2023.

    (4) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.

     

     

     

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

     

     

     

    PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

    SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

     

     

     

     

     

     

     

    (dollars in thousands)

    March

    December

    September

    June

    March

    December

    2024

    2023

    2023

    2023

    2023

    2022

    Asset quality information and ratios:

     

     

     

     

     

     

    Nonperforming assets:

     

     

     

     

     

     

    Nonaccrual loans

    $

    108,325

     

    82,288

     

    42,950

     

    44,289

     

    36,988

     

    38,116

     

    ORE and other nonperforming assets (NPAs)

     

    2,766

     

    4,347

     

    3,019

     

    3,105

     

    7,802

     

    7,952

     

    Total nonperforming assets

    $

    111,091

     

    86,635

     

    45,969

     

    47,394

     

    44,790

     

    46,068

     

    Past due loans over 90 days and still accruing interest

    $

    5,273

     

    6,004

     

    4,969

     

    5,257

     

    5,284

     

    4,406

     

    Accruing purchase credit deteriorated loans

    $

    6,222

     

    6,501

     

    7,010

     

    7,415

     

    7,684

     

    8,060

     

    Net loan charge-offs

    $

    16,215

     

    13,451

     

    18,093

     

    9,771

     

    7,291

     

    11,729

     

    Allowance for credit losses to nonaccrual loans

     

    342.8

    %

    429.0

    %

    806.0

    %

    762.0

    %

    848.5

    %

    788.8

    %

    As a percentage of total loans:

     

     

     

     

     

     

    Past due accruing loans over 30 days

     

    0.17

    %

    0.23

    %

    0.16

    %

    0.14

    %

    0.14

    %

    0.15

    %

    Potential problem loans

     

    0.28

    %

    0.39

    %

    0.42

    %

    0.32

    %

    0.22

    %

    0.19

    %

    Allowance for credit losses

     

    1.12

    %

    1.08

    %

    1.08

    %

    1.08

    %

    1.04

    %

    1.04

    %

    Nonperforming assets to total loans, ORE and other NPAs

     

    0.33

    %

    0.27

    %

    0.14

    %

    0.15

    %

    0.15

    %

    0.16

    %

    Classified asset ratio (Pinnacle Bank) (6)

     

    4.9

    %

    5.2

    %

    4.6

    %

    3.3

    %

    2.7

    %

    2.4

    %

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

     

    0.20

    %

    0.17

    %

    0.23

    %

    0.13

    %

    0.10

    %

    0.17

    %

     

     

     

     

     

     

     

    Interest rates and yields:

     

     

     

     

     

     

    Loans

     

    6.67

    %

    6.62

    %

    6.50

    %

    6.30

    %

    6.00

    %

    5.54

    %

    Securities

     

    4.06

    %

    4.12

    %

    3.81

    %

    3.66

    %

    3.47

    %

    3.19

    %

    Total earning assets

     

    6.11

    %

    6.09

    %

    5.95

    %

    5.74

    %

    5.45

    %

    5.02

    %

    Total deposits, including non-interest bearing

     

    3.10

    %

    3.07

    %

    2.92

    %

    2.52

    %

    2.03

    %

    1.40

    %

    Securities sold under agreements to repurchase

     

    2.67

    %

    2.54

    %

    2.30

    %

    1.93

    %

    1.10

    %

    0.94

    %

    FHLB advances

     

    4.38

    %

    4.26

    %

    4.22

    %

    4.20

    %

    3.94

    %

    3.04

    %

    Subordinated debt and other borrowings

     

    5.60

    %

    5.59

    %

    5.54

    %

    5.44

    %

    5.38

    %

    4.98

    %

    Total deposits and interest-bearing liabilities

     

    3.20

    %

    3.15

    %

    3.01

    %

    2.65

    %

    2.12

    %

    1.47

    %

     

     

     

     

     

     

     

    Capital and other ratios (6):

     

     

     

     

     

     

    Pinnacle Financial ratios:

     

     

     

     

     

     

    Shareholders' equity to total assets

     

    12.5

    %

    12.6

    %

    12.3

    %

    12.5

    %

    12.6

    %

    13.2

    %

    Common equity Tier one

     

    10.4

    %

    10.3

    %

    10.3

    %

    10.2

    %

    9.9

    %

    10.0

    %

    Tier one risk-based

     

    10.9

    %

    10.8

    %

    10.9

    %

    10.8

    %

    10.5

    %

    10.5

    %

    Total risk-based

     

    12.9

    %

    12.7

    %

    12.8

    %

    12.7

    %

    12.4

    %

    12.4

    %

    Leverage

     

    9.5

    %

    9.4

    %

    9.4

    %

    9.5

    %

    9.6

    %

    9.7

    %

    Tangible common equity to tangible assets

     

    8.5

    %

    8.6

    %

    8.2

    %

    8.3

    %

    8.3

    %

    8.5

    %

    Pinnacle Bank ratios:

     

     

     

     

     

     

    Common equity Tier one

     

    11.3

    %

    11.1

    %

    11.2

    %

    11.1

    %

    10.8

    %

    10.9

    %

    Tier one risk-based

     

    11.3

    %

    11.1

    %

    11.2

    %

    11.1

    %

    10.8

    %

    10.9

    %

    Total risk-based

     

    12.2

    %

    12.0

    %

    12.0

    %

    11.9

    %

    11.6

    %

    11.6

    %

    Leverage

     

    9.7

    %

    9.7

    %

    9.7

    %

    9.8

    %

    9.9

    %

    10.1

    %

    Construction and land development loans

    as a percentage of total capital (17)

     

    77.5

    %

    84.2

    %

    83.1

    %

    84.5

    %

    88.5

    %

    85.9

    %

    Non-owner occupied commercial real estate and

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

     

    258.0

    %

    259.0

    %

    256.4

    %

    256.7

    %

    261.1

    %

    249.6

    %

     

     

     

     

     

     

     

    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

     

    2024

    2023

    2023

    2023

    2023

    2022

     

     

     

     

     

     

     

     

    Per share data:

     

     

     

     

     

     

     

    Earnings per common share – basic

    $

    1.58

     

    1.20

     

    1.69

     

    2.55

     

    1.76

     

    1.77

     

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

    $

    1.54

     

    1.70

     

    1.79

     

    1.80

     

    1.76

     

    1.77

     

    Earnings per common share – diluted

    $

    1.57

     

    1.19

     

    1.69

     

    2.54

     

    1.76

     

    1.76

     

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

    $

    1.53

     

    1.68

     

    1.79

     

    1.79

     

    1.76

     

    1.76

     

    Common dividends per share

    $

    0.22

     

    0.22

     

    0.22

     

    0.22

     

    0.22

     

    0.22

     

    Book value per common share at quarter end (7)

    $

    76.23

     

    75.80

     

    73.23

     

    73.32

     

    71.24

     

    69.35

     

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

    $

    51.98

     

    51.38

     

    48.78

     

    48.85

     

    46.75

     

    44.74

     

    Revenue per diluted common share

    $

    5.60

     

    5.16

     

    5.35

     

    6.43

     

    5.28

     

    5.27

     

    Revenue per diluted common share, excluding non-GAAP adjustments

    $

    5.45

     

    5.25

     

    5.48

     

    5.43

     

    5.28

     

    5.27

     

     

     

     

     

     

     

     

     

    Investor information:

     

     

     

     

     

     

     

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

    $

    85.88

     

    87.22

     

    67.04

     

    56.65

     

    55.16

     

    73.40

     

    High closing sales price of common stock during quarter

    $

    91.82

     

    89.34

     

    75.95

     

    57.93

     

    82.79

     

    87.81

     

    Low closing sales price of common stock during quarter

    $

    79.26

     

    60.77

     

    56.41

     

    46.17

     

    52.51

     

    70.74

     

     

     

     

     

     

     

     

     

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

    $

    23.62

     

    22.60

     

    22.70

     

    23.75

     

    24.15

     

    25.35

     

    High closing sales price of depositary shares during quarter

    $

    24.44

     

    23.65

     

    23.85

     

    24.90

     

    25.71

     

    25.60

     

    Low closing sales price of depositary shares during quarter

    $

    22.71

     

    21.00

     

    21.54

     

    19.95

     

    20.77

     

    23.11

     

     

     

     

     

     

     

     

     

    Other information:

     

     

     

     

     

     

     

    Residential mortgage loan sales:

     

     

     

     

     

     

     

    Gross loans sold

    $

    148,576

     

    142,556

     

    198,247

     

    192,948

     

    120,146

     

    134,514

     

    Gross fees (8)

    $

    3,540

     

    3,191

     

    4,350

     

    4,133

     

    2,795

     

    3,149

     

    Gross fees as a percentage of loans originated

     

    2.38

    %

    2.24

    %

    2.19

    %

    2.14

    %

    2.33

    %

    2.34

    %

    Net gain (loss) on residential mortgage loans sold

    $

    2,879

     

    879

     

    2,012

     

    1,567

     

    2,053

     

    (65

    )

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

    $

     

    14

     

    (9,727

    )

    (9,961

    )

     

     

    Brokerage account assets, at quarter end (9)

    $

    10,756,108

     

    9,810,457

     

    9,041,716

     

    9,007,230

     

    8,634,339

     

    8,049,125

     

    Trust account managed assets, at quarter end

    $

    6,297,887

     

    5,530,495

     

    5,047,128

     

    5,084,592

     

    4,855,951

     

    4,560,752

     

    Core deposits (10)

    $

    34,638,610

     

    33,738,917

     

    33,606,783

     

    32,780,767

     

    32,054,111

     

    31,301,077

     

    Core deposits to total funding (10)

     

    82.2

    %

    81.7

    %

    81.9

    %

    80.9

    %

    82.4

    %

    86.8

    %

    Risk-weighted assets

    $

    40,531,311

     

    40,205,295

     

    39,527,086

     

    38,853,588

     

    38,117,659

     

    36,216,901

     

    Number of offices

     

    128

     

    128

     

    128

     

    127

     

    126

     

    123

     

    Total core deposits per office

    $

    270,614

     

    263,585

     

    262,553

     

    258,116

     

    254,398

     

    254,480

     

    Total assets per full-time equivalent employee

    $

    14,438

     

    14,287

     

    14,274

     

    14,166

     

    13,750

     

    12,948

     

    Annualized revenues per full-time equivalent employee

    $

    508.5

     

    468.4

     

    486.2

     

    593.0

     

    496.5

     

    491.8

     

    Annualized expenses per full-time equivalent employee

    $

    287.8

     

    296.8

     

    254.1

     

    256.5

     

    261.7

     

    247.3

     

    Number of employees (full-time equivalent)

     

    3,386.5

     

    3,357.0

     

    3,329.5

     

    3,309.0

     

    3,281.5

     

    3,241.5

     

    Associate retention rate (11)

     

    94.2

    %

    94.2

    %

    93.6

    %

    94.1

    %

    93.8

    %

    93.8

    %

     

     

     

     

     

     

     

     

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

     

    PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

    RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

     

    Three months ended

    (dollars in thousands, except per share data)

    March

    December

    March

    2024

    2023

    2023

     

     

     

     

    Net interest income

    $

    318,034

     

    317,252

     

    312,231

     

     

     

     

     

    Noninterest income

     

    110,103

     

    79,088

     

    89,529

     

    Total revenues

     

    428,137

     

    396,340

     

    401,760

     

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

     

     

    (14

    )

     

    Loss on BOLI restructuring

     

     

    7,166

     

     

    Recognition of mortgage servicing asset

     

    (11,812

    )

     

     

    Total revenues excluding the impact of adjustments noted above

    $

    416,325

     

    403,492

     

    401,760

     

     

     

     

     

    Noninterest expense

    $

    242,365

     

    251,168

     

    211,727

     

    Less: ORE expense (benefit)

     

    84

     

    125

     

    99

     

    FDIC special assessment

     

    7,250

     

    29,000

     

     

    Noninterest expense excluding the impact of adjustments noted above

    $

    235,031

     

    222,043

     

    211,628

     

     

     

     

     

    Pre-tax income

    $

    151,275

     

    128,858

     

    171,266

     

    Provision for credit losses

     

    34,497

     

    16,314

     

    18,767

     

    Pre-tax pre-provision net revenue

     

    185,772

     

    145,172

     

    190,033

     

    Less: Adjustments noted above

     

    (4,478

    )

    36,277

     

    99

     

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

    $

    181,294

     

    181,449

     

    190,132

     

     

     

     

     

    Noninterest income

    $

    110,103

     

    79,088

     

    89,529

     

    Less: Adjustments noted above

     

    (11,812

    )

    7,152

     

     

    Noninterest income excluding the impact of adjustments noted above

    $

    98,291

     

    86,240

     

    89,529

     

     

     

     

     

    Efficiency ratio (4)

     

    56.61

    %

    63.37

    %

    52.70

    %

    Adjustments noted above

     

    (0.16

    )%

    (8.34

    )%

    (0.02

    )%

    Efficiency ratio excluding adjustments noted above (4)

     

    56.45

    %

    55.03

    %

    52.68

    %

     

     

     

     

    Total average assets

    $

    48,311,260

     

    47,668,519

     

    42,983,854

     

     

     

     

     

    Noninterest income to average assets (1)

     

    0.92

    %

    0.66

    %

    0.84

    %

    Less: Adjustments noted above

     

    (0.10

    )%

    0.06

    %

    %

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

     

    0.82

    %

    0.72

    %

    0.84

    %

     

     

     

     

    Noninterest expense to average assets (1)

     

    2.02

    %

    2.09

    %

    2.00

    %

    Adjustments as noted above

     

    (0.06

    )%

    (0.24

    )%

    %

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

     

    1.96

    %

    1.85

    %

    2.00

    %

     

     

     

     

    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

     

    2024

     

    2023

     

    2023

     

    2023

     

    2023

     

    2022

     

    Net income available to common shareholders

    $

    120,146

     

    91,181

     

    128,805

     

    193,501

     

    133,473

     

    134,049

     

    Investment (gains) losses on sales of securities, net

     

     

    (14

    )

    9,727

     

    9,961

     

     

     

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

     

     

     

     

    (85,692

    )

     

     

    Loss on BOLI restructuring

     

     

    16,252

     

     

     

     

     

    FDIC special assessment

     

    7,250

     

    29,000

     

     

     

     

     

    ORE expense (benefit)

     

    84

     

    125

     

    33

     

    58

     

    99

     

    179

     

    Recognition of mortgage servicing asset

     

    (11,812

    )

     

     

     

     

     

    Tax effect on above noted adjustments (16)

     

    1,120

     

    (7,278

    )

    (2,440

    )

    18,918

     

    (25

    )

    (47

    )

    Net income available to common shareholders excluding adjustments noted above

    $

    116,788

     

    129,266

     

    136,125

     

    136,746

     

    133,547

     

    134,181

     

     

     

     

     

     

     

     

    Basic earnings per common share

    $

    1.58

     

    1.20

     

    1.69

     

    2.55

     

    1.76

     

    1.77

     

    Less:

     

     

     

     

     

     

    Investment (gains) losses on sales of securities, net

     

     

     

    0.13

     

    0.13

     

     

     

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

     

     

     

     

    (1.13

    )

     

     

    Loss on BOLI restructuring

     

     

    0.21

     

     

     

     

     

    FDIC special assessment

     

    0.10

     

    0.38

     

     

     

     

     

    ORE expense (benefit)

     

     

     

     

     

     

     

    Recognition of mortgage servicing asset

     

    (0.15

    )

     

     

     

     

     

    Tax effect on above noted adjustments (16)

     

    0.01

     

    (0.10

    )

    (0.03

    )

    0.25

     

     

     

    Basic earnings per common share excluding adjustments noted above

    $

    1.54

     

    1.70

     

    1.79

     

    1.80

     

    1.76

     

    1.77

     

     

     

     

     

     

     

     

    Diluted earnings per common share

    $

    1.57

     

    1.19

     

    1.69

     

    2.54

     

    1.76

     

    1.76

     

    Less:

     

     

     

     

     

     

    Investment (gains) losses on sales of securities, net

     

     

     

    0.13

     

    0.13

     

     

     

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

     

     

     

     

    (1.13

    )

     

     

    Loss on BOLI restructuring

     

     

    0.21

     

     

     

     

     

    FDIC special assessment

     

    0.10

     

    0.38

     

     

     

     

     

    ORE expense (benefit)

     

     

     

     

     

     

     

    Recognition of mortgage servicing asset

     

    (0.15

    )

     

     

     

     

     

    Tax effect on above noted adjustments (16)

     

    0.01

     

    (0.09

    )

    (0.03

    )

    0.25

     

     

     

    Diluted earnings per common share excluding the adjustments noted above

    $

    1.53

     

    1.68

     

    1.79

     

    1.80

     

    1.76

     

    1.76

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Revenue per diluted common share

    $

    5.60

     

    5.16

     

    5.35

     

    6.43

     

    5.28

     

    5.27

     

    Adjustments due to revenue-impacting items as noted above

     

    (0.15

    )

    0.09

     

    0.13

     

    (1.00

    )

     

     

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

    $

    5.45

     

    5.25

     

    5.48

     

    5.43

     

    5.28

     

    5.27

     

     

     

     

     

     

     

     

    Book value per common share at quarter end (7)

    $

    76.23

     

    75.80

     

    73.23

     

    73.32

     

    71.24

     

    69.35

     

    Adjustment due to goodwill, core deposit and other intangible assets

     

    (24.25

    )

    (24.42

    )

    (24.45

    )

    (24.47

    )

    (24.49

    )

    (24.61

    )

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

    $

    51.98

     

    51.38

     

    48.78

     

    48.85

     

    46.75

     

    44.74

     

     

     

     

     

     

     

     

    Equity method investment (15)

     

     

     

     

     

     

    Fee income from BHG, net of amortization

    $

    16,035

     

    14,432

     

    24,967

     

    26,924

     

    19,079

     

    21,005

     

    Funding cost to support investment

     

    5,974

     

    5,803

     

    6,546

     

    6,005

     

    5,768

     

    5,438

     

    Pre-tax impact of BHG

     

    10,061

     

    8,629

     

    18,421

     

    20,919

     

    13,311

     

    15,567

     

    Income tax expense at statutory rates (16)

     

    2,515

     

    2,157

     

    4,605

     

    5,230

     

    3,328

     

    4,069

     

    Earnings attributable to BHG

    $

    7,546

     

    6,472

     

    13,816

     

    15,689

     

    9,983

     

    11,498

     

     

     

     

     

     

     

     

    Basic earnings per common share attributable to BHG

    $

    0.10

     

    0.09

     

    0.18

     

    0.21

     

    0.13

     

    0.15

     

    Diluted earnings per common share attributable to BHG

    $

    0.10

     

    0.08

     

    0.18

     

    0.21

     

    0.13

     

    0.15

     

     

     

     

     

     

     

     

    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

     

    2024

    2023

    2023

     

     

     

     

     

     

    Return on average assets (1)

     

    1.00

    %

    0.76

    %

    1.26

    %

     

    Adjustments as noted above

     

    (0.03

    )%

    0.32

    %

    %

     

    Return on average assets excluding adjustments noted above (1)

     

    0.97

    %

    1.08

    %

    1.26

    %

     

     

     

     

     

     

    Tangible assets:

     

     

     

     

    Total assets

    $

    48,894,196

     

    47,959,883

     

    45,119,587

     

     

    Less: Goodwill

     

    (1,846,973

    )

    (1,846,973

    )

    (1,846,973

    )

     

    Core deposit and other intangible assets

     

    (25,881

    )

    (27,465

    )

    (32,761

    )

     

    Net tangible assets

    $

    47,021,342

     

    46,085,445

     

    43,239,853

     

     

     

     

     

     

     

    Tangible common equity:

     

     

     

     

    Total shareholders' equity

    $

    6,103,851

     

    6,035,788

     

    5,684,128

     

     

    Less: Preferred shareholders' equity

     

    (217,126

    )

    (217,126

    )

    (217,126

    )

     

    Total common shareholders' equity

     

    5,886,725

     

    5,818,662

     

    5,467,002

     

     

    Less: Goodwill

     

    (1,846,973

    )

    (1,846,973

    )

    (1,846,973

    )

     

    Core deposit and other intangible assets

     

    (25,881

    )

    (27,465

    )

    (32,761

    )

     

    Net tangible common equity

    $

    4,013,871

     

    3,944,224

     

    3,587,268

     

     

     

     

     

     

     

    Ratio of tangible common equity to tangible assets

     

    8.54

    %

    8.56

    %

    8.30

    %

     

     

     

     

     

     

    Average tangible assets:

     

     

     

     

    Average assets

    $

    48,311,260

     

    47,668,519

     

    42,983,854

     

     

    Less: Average goodwill

     

    (1,846,973

    )

    (1,846,973

    )

    (1,846,973

    )

     

    Average core deposit and other intangible assets

     

    (26,898

    )

    (28,573

    )

    (33,917

    )

     

    Net average tangible assets

    $

    46,437,389

     

    45,792,973

     

    41,102,964

     

     

     

     

     

     

     

    Return on average assets (1)

     

    1.00

    %

    0.76

    %

    1.26

    %

     

    Adjustment due to goodwill, core deposit and other intangible assets

     

    0.04

    %

    0.03

    %

    0.06

    %

     

    Return on average tangible assets (1)

     

    1.04

    %

    0.79

    %

    1.32

    %

     

    Adjustments as noted above

     

    (0.03

    )%

    0.33

    %

    %

     

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

     

    1.01

    %

    1.12

    %

    1.32

    %

     

     

     

     

     

     

    Average tangible common equity:

     

     

     

     

    Average shareholders' equity

    $

    6,082,616

     

    5,889,075

     

    5,605,604

     

     

    Less: Average preferred equity

     

    (217,126

    )

    (217,126

    )

    (217,126

    )

     

    Average common equity

     

    5,865,490

     

    5,671,949

     

    5,388,478

     

     

    Less: Average goodwill

     

    (1,846,973

    )

    (1,846,973

    )

    (1,846,973

    )

     

    Average core deposit and other intangible assets

     

    (26,898

    )

    (28,573

    )

    (33,917

    )

     

    Net average tangible common equity

    $

    3,991,619

     

    3,796,403

     

    3,507,588

     

     

     

     

     

     

     

    Return on average equity (1)

     

    7.94

    %

    6.14

    %

    9.66

    %

     

    Adjustment due to average preferred shareholders' equity

     

    0.30

    %

    0.24

    %

    0.39

    %

     

    Return on average common equity (1)

     

    8.24

    %

    6.38

    %

    10.05

    %

     

    Adjustment due to goodwill, core deposit and other intangible assets

     

    3.87

    %