3Q23 annualized linked-quarter,
end-of-period loans and core deposits grew 10.1%
Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported
net income per diluted common share of $1.69 for the quarter ended
Sept. 30, 2023, compared to net income per diluted common share of
$1.91 for the quarter ended Sept. 30, 2022, a decrease of 11.5
percent. Net income per diluted common share was $5.99 for the nine
months ended Sept. 30, 2023, compared to $5.42 for the nine months
ended Sept. 30, 2022, an increase of approximately 10.5
percent.
Three Months Ended
Nine Months Ended
September 30,
2023
June 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Diluted earnings per common share
$
1.69
$
2.54
$
1.91
$
5.99
$
5.42
Adjustments:
Investment losses on sales of securities,
net
0.13
0.13
—
0.26
—
Gain on sale of fixed assets as a result
of sale-leaseback transaction
—
(1.13
)
—
(1.13
)
—
Tax effect of above noted adjustments
(0.03
)
0.25
—
0.22
—
Diluted earnings per common share after
adjustments
$
1.79
$
1.79
$
1.91
$
5.34
$
5.42
After considering the adjustments noted in the table above for
the three months ended Sept. 30, 2023 and 2022, net income per
diluted common share was $1.79, compared to $1.91 for the three
months ended Sept. 30, 2022. Net income per diluted common share
adjusted for the items noted in the table above was $5.34 for the
nine months ended Sept. 30, 2023, compared to $5.42 for the nine
months ended Sept. 30, 2022.
"Despite a volatile economic backdrop, our firm continues to
benefit from our unmatched ability to attract talent and create
raving clients that refuse to leave us," said M. Terry Turner,
Pinnacle's president and chief executive officer. "We continued to
deliver outsized growth to our already strong client deposit base,
with our core deposits increasing by 10.1 percent annualized this
quarter. The 2023 FDIC summary of deposits reflects significant
market share growth over 2022 in all our major markets, validating
both the exportability of our model and the sustainability of our
outsized growth by taking market share from our larger, more
vulnerable competitors.
"Additionally, during the quarter we continued to avoid certain
asset classes and reduced our exposure in loan segments with
elevated risks and expect that to continue for the next few
quarters. Against that backdrop, we are also pleased that overall
loan growth during the third quarter of 2023 was $790 million, or
10.1 percent linked-quarter annualized.
"We also added 29 revenue producers during the third quarter.
Going forward, I have asked our line leadership to accelerate their
efforts to recruit the best relationship bankers in our markets in
order to seize on the vulnerabilities that exist at many of our
larger competitors. It is this ability to attract market-leading
revenue producers that enables us to continue compounding earnings
and growing tangible book value more reliably than peers, even in a
very challenging operating environment. Historically, our operating
leverage has compared favorably to our peers; however, given the
outsized number of non-revenue support hires we have invested in
over the last few years, I would now expect our focus on recruiting
more revenue producers to yield an even stronger operating leverage
advantage for us as we move into 2024."
BALANCE SHEET GROWTH AND LIQUIDITY:
Total assets at Sept. 30, 2023 were $47.5 billion, an increase
of approximately $6.5 billion from Sept. 30, 2022 and $647.8
million from June 30, 2023, reflecting a year-over-year increase of
15.9 percent and a linked-quarter annualized increase of 5.5
percent, respectively. A further analysis of select balance sheet
trends follows:
Balances at
Linked-
Quarter
Annualized
% Change
Balances at
Year-over-Year
% Change
(dollars in thousands)
Sept. 30, 2023
June 30, 2023
Sept. 30, 2022
Loans
$
31,943,284
$
31,153,290
10.1
%
$
27,711,694
15.3
%
Securities
6,882,276
6,623,457
15.6
%
6,481,018
6.2
%
Other interest-earning assets
3,512,452
4,001,844
(48.9
)%
2,225,435
57.8
%
Total interest-earning assets
$
42,338,012
$
41,778,591
5.4
%
$
36,418,147
16.3
%
Core deposits:
Noninterest-bearing deposits
$
8,324,325
$
8,436,799
(5.3
)%
$
10,567,873
(21.2
)%
Interest-bearing core deposits(1)
25,282,458
24,343,968
15.4
%
20,180,944
25.3
%
Noncore deposits and other funding(2)
7,420,341
7,731,082
(16.1
)%
4,444,868
66.9
%
Total funding
$
41,027,124
$
40,511,849
5.1
%
$
35,193,685
16.6
%
(1):
Interest-bearing core deposits are
interest-bearing deposits, money market accounts, time deposits
less than $250,000 including reciprocating time and money market
deposits.
(2):
Noncore deposits and other funding
consists of time deposits greater than $250,000, securities sold
under agreements to repurchase, public funds, brokered deposits,
FHLB advances and subordinated debt.
- Approximately 54 percent of third quarter 2023 loan growth was
related to commercial and industrial and owner-occupied commercial
real estate categories, two segments the firm intends to continue
to emphasize for the remainder of 2023 and 2024.
- During the quarter ended Sept. 30, 2023, the firm acquired
$583.6 million in floating rate US treasuries offset by the sale of
$129.7 million in other investment securities, premium amortization
and market value adjustments.
- On-balance sheet liquidity, defined as cash and cash
equivalents plus unpledged securities, remained strong, totaling
$7.4 billion as of Sept. 30, 2023, representing a $381 million
decrease from the on-balance sheet liquidity level of $7.8 billion
as of June 30, 2023.
"As we entered the third quarter, we expected three important
deposit related trends to materialize for our firm," Turner said.
"First, we believed that we would continue to grow our core deposit
base more rapidly than peers. Our core deposits increased by 10.1
percent linked-quarter annualized in the third quarter, which we
believe is exceptional in this environment. Second, we also
believed the rate of decrease in noninterest bearing deposits
should begin to subside, which it has. Demand deposit contraction
in the third quarter was only $112.5 million, compared to $581.6
million and $794.3 million in the second and first quarters of
2023, respectively. And third, we expected the rate of increase in
our overall deposit costs would lessen, which it did, having
increased by 40 basis points in the third quarter, compared to 49
basis points and 63 basis points in the second and first quarters,
respectively. We are pleased to see these three critical trends
improve during the third quarter and are optimistic about continued
improvement as we enter the fourth quarter of 2023."
PRE-TAX, PRE-PROVISION NET REVENUE (PPNR) GROWTH:
Pre-tax, pre-provision net revenues (PPNR) for the three and
nine months ended Sept. 30, 2023 were $194.8 million and $662.4
million, respectively, a decrease of 7.8 percent and an increase of
17.1 percent, respectively, from the $211.3 million and $565.7
million, respectively, recognized in the three and nine months
ended Sept. 30, 2022.
Three months ended
Nine months ended
Sept. 30,
Sept. 30,
(dollars in thousands)
2023
2022
% change
2023
2022
% change
Revenues:
Net interest income
$
317,242
$
305,784
3.7
%
$
944,866
$
809,833
16.7
%
Noninterest income
90,797
104,805
(13.4
)%
354,165
333,803
6.1
%
Total revenues
408,039
410,589
(0.6
)%
1,299,031
1,143,636
13.6
%
Noninterest expense
213,233
199,253
7.0
%
636,601
577,952
10.1
%
Pre-tax, pre-provision net revenue
(PPNR)
194,806
211,336
(7.8
)%
662,430
565,684
17.1
%
Adjustments:
Investment losses (gains) on sales of
securities, net
9,727
(217
)
NM
19,688
(156
)
NM
Gain on the sale of fixed assets as a
result of sale leaseback
—
—
NM
(85,692
)
—
NM
ORE expense (benefit)
33
(90
)
NM
190
101
88.1
%
Adjusted PPNR
$
204,566
$
211,029
(3.1
)%
$
596,616
$
565,629
5.5
%
- Revenue per fully diluted common share was $5.35 for the third
quarter of 2023, compared to $6.43 for the second quarter of 2023
and $5.40 for the third quarter of 2022, a decline of 0.9 percent
year-over-year. Excluding net losses on sales of investment
securities and ORE expense, revenue per fully diluted share for the
third quarter of 2023 was $5.49.
- Net interest income for the quarter ended Sept. 30, 2023 was
$317.2 million, compared to $315.4 million for the second quarter
of 2023 and $305.8 million for the third quarter of 2022, a
year-over-year growth rate of 3.7 percent.
- Noninterest income for the quarter ended Sept. 30, 2023 was
$90.8 million, compared to $173.8 million for the second quarter of
2023 and $104.8 million for the third quarter of 2022, a
year-over-year decrease of 13.4 percent.
- Gain on the sale of fixed assets was $87,000 for the quarter
ended Sept. 30, 2023, compared to $85.7 million and $227,000,
respectively, for the quarters ended June 30, 2023 and Sept. 30,
2022. The quarter ended June 30, 2023 included a gain on the sale
of fixed assets as a result of the sale-leaseback transaction
completed in the second quarter of 2023 of $85.7 million.
- Net losses on the sale of investment securities were $9.7
million for the quarter ended Sept. 30, 2023, compared to $10.0
million in net losses for the quarter ended June 30, 2023 and
$217,000 in net gains for the quarter ended Sept. 30, 2022.
- Wealth management revenues, which include investment, trust and
insurance services, were $22.8 million for the third quarter of
2023, compared to $24.1 million for the second quarter of 2023 and
$19.4 million for the third quarter of 2022, a year-over-year
increase of 17.3 percent.
- During the third quarter of 2023, mortgage loans sold resulted
in a $2.0 million net gain, compared to $1.6 million in the second
quarter of 2023 and $1.1 million in the third quarter of 2022.
- Income from the firm's investment in BHG was $25.0 million for
the third quarter 2023, compared to $26.9 million for the second
quarter of 2023 and $41.3 million for the third quarter of 2022, a
year-over-year decline of 39.6 percent. The firm estimated that
BHG's overall impact to Pinnacle's earnings for the first nine
months of 2023 amounted to $0.52, down from $1.09 for the
comparable period in 2022, in each case, after considering
reasonable funding costs to support the investment. BHG's impact on
Pinnacle's earnings declined from 20.2 percent of Pinnacle's 2022
total diluted earnings per common share to 8.6 percent of
Pinnacle's 2023 total diluted earnings per share.
- BHG's loan originations decreased to $1.0 billion in the third
quarter 2023 compared to $1.1 billion in the second quarter of 2023
and $1.2 billion in the third quarter of 2022.
- Loans sold to BHG's community bank partners were approximately
$435 million in the third quarter 2023 compared to approximately
$523 million in the second quarter of 2023 and $555 million in the
third quarter of 2022. BHG also sold $564 million in loans to
private investors during the third quarter of 2022 compared to $557
million in the second quarter of 2023 and $452 million in the third
quarter of 2022.
- BHG increased its reserves for on-balance sheet loan losses to
$213.5 million, or 6.44 percent of loans held for investment at
Sept. 30, 2023, compared to 5.99 percent at June 30, 2023. BHG
decreased its accrual for losses attributable to loan substitutions
and prepayments for loans previously sold through its community
bank auction platform to $350.3 million, or 5.46 percent of the
loans that have been previously sold and were unpaid, at Sept. 30,
2023 compared to 5.87 percent at June 30, 2023.
- Noninterest expense for the quarter ended Sept. 30, 2023 was
$213.2 million, compared to $211.6 million in the second quarter of
2023 and $199.3 million in the third quarter of 2022, reflecting a
year-over-year increase of 7.0 percent.
- Salaries and employee benefits were $130.3 million in the third
quarter of 2023, compared to $132.4 million in the second quarter
of 2023 and $129.9 million in the third quarter of 2022, reflecting
a slight year-over-year increase. The reduction in salaries and
employee benefits expense on a linked-quarter basis was primarily
due to the year-over-year decrease in the costs related to the
firm's annual cash and equity incentive plans. Offsetting this
decrease in part was the impact of an increase in full-time
equivalent associates, to 3,329.5 at Sept. 30, 2023 from 3,184.5 at
Sept. 30, 2022, a year-over-year increase of 4.6 percent.
- Equipment and occupancy costs were $36.9 million in the third
quarter of 2023, compared to $33.7 million in the second quarter of
2023 and $27.9 million in the third quarter of 2022, reflecting a
year-over-year increase of 32.3 percent. Contributing to the
year-over-year increase is the impact of the sale leaseback
transaction completed in the second quarter of 2023.
- Noninterest expense categories, other than those specifically
noted above, were $46.0 million in the third quarter of 2023,
compared to $45.5 million in the second quarter of 2023 and $41.5
million in the third quarter of 2022, reflecting a year-over-year
increase of 10.9 percent.
"To grow net interest income in this environment on a
linked-quarter basis is a great achievement," said Harold R.
Carpenter, Pinnacle's chief financial officer. "The net reduction
in fee income in the third quarter of 2023 compared to the second
quarter was largely attributable to the $85.7 million gain on sale
of fixed assets recognized in connection with a sale-leaseback
transaction during the prior quarter.
"BHG had a stronger quarter than we originally anticipated. Even
though their pipelines remain strong and credit costs improved
during the quarter, our 2023 outlook for BHG remains essentially
unchanged at this time. Thus, we believe BHG's fourth quarter
results will not be as strong as the last two quarters. Excluding
the impact of BHG, the sale-leaseback transaction in the second
quarter and the bond losses experienced in the second and third
quarters, third quarter fee income increased slightly over the
second quarter."
SOUNDNESS AND PROFITABILITY:
Three months ended
Nine months ended
September 30,
2023
June 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Net interest margin
3.06
%
3.20
%
3.47
%
3.22
%
3.18
%
Efficiency ratio
52.26
%
43.26
%
48.53
%
49.01
%
50.54
%
Return on average assets
1.08
%
1.71
%
1.42
%
1.35
%
1.40
%
Return on average tangible common equity
(TCE)
13.43
%
21.06
%
17.40
%
16.62
%
16.89
%
As of
September 30,
2023
June 30,
2023
September 30,
2022
Shareholders' equity to total assets
12.3
%
12.5
%
13.0
%
Average loan to deposit ratio
82.80
%
84.94
%
81.61
%
Uninsured/uncollateralized deposits to
total deposits
28.89
%
28.31
%
39.71
%
Tangible common equity to tangible
assets
8.2
%
8.3
%
8.3
%
Book value per common share
$
73.23
$
73.32
$
67.07
Tangible book value per common share
$
48.78
$
48.85
$
42.44
Annualized net loan charge-offs to avg.
loans (1)
0.23
%
0.13
%
0.16
%
Nonperforming assets to total loans, ORE
and other nonperforming assets (NPAs)
0.14
%
0.15
%
0.15
%
Classified asset ratio (Pinnacle Bank)
(2)
4.60
%
3.30
%
2.60
%
Allowance for credit losses (ACL) to total
loans
1.08
%
1.08
%
1.04
%
(1):
Annualized net loan charge-offs to average
loans ratios are computed by annualizing quarterly net loan
charge-offs and dividing the result by average loans for the
quarter.
(2):
Classified assets as a percentage of Tier
1 capital plus allowance for credit losses.
- Net interest margin was 3.06 percent for the third quarter of
2023, compared to 3.20 percent for the second quarter of 2023 and
3.47 percent for the third quarter of 2022. Net interest margin
increased to 3.22 percent for the nine months ended Sept. 30, 2023,
compared to 3.18 percent for the nine months ended Sept. 30,
2022.
- Provision for credit losses was $26.8 million in the third
quarter of 2023, compared to $31.7 million in the second quarter of
2023 and $27.5 million in the third quarter of 2022. Net
charge-offs were $18.1 million for the quarter ended Sept. 30,
2023, compared to $9.8 million for the quarter ended June 30, 2023
and $11.0 million for the quarter ended Sept. 30, 2022. Annualized
net charge-offs for the third quarter of 2023 were 0.23
percent.
- Nonperforming assets were $46.0 million at Sept. 30, 2023,
compared to $47.4 million at June 30, 2023 and $41.9 million at
Sept. 30, 2022, up 9.7 percent over the same quarter last year. The
ratio of the allowance for credit losses to nonperforming loans at
Sept. 30, 2023 was 806.0 percent, compared to 762.0 percent at June
30, 2023 and 844.5 percent at Sept. 30, 2022.
- Classified assets were $218.9 million at Sept. 30, 2023,
compared to $153.9 million at June 30, 2023 and $107.9 at Sept. 30,
2022, up more than 100 percent over the same quarter last
year.
"Although our net interest margin declined on a linked-quarter
basis by approximately 14 basis points, we are pleased that the
size of the decline was lower than what we experienced over the
last several quarters," Carpenter said. "Increased deposit pricing
and the continued reduction in our noninterest-bearing deposit
account balances were again the primary contributors to our
decreased net interest margin.
"Our investment securities portfolio, including both the
held-to-maturity and available-for-sale portfolios, continues to
perform well for us. Approximately 35 percent of our
available-for-sale securities portfolio is effectively indexed to
floating rates, which we consider to be a meaningful advantage.
Despite this advantage, the impact of increased market interest
rates on investment securities caused our accumulated other
comprehensive loss to increase by $127 million this quarter,
contributing to a slight decline in our tangible book value per
share from $48.85 at June 30, 2023 to $48.78 at Sept. 30, 2023.
"Lastly, net charge-offs increased this quarter primarily due to
a single loan acquired through our syndication platform. At June
30, 2023, we had placed this loan on nonperforming status and
allocated approximately 50 percent of the loan to our allowance for
credit losses. We were notified during the third quarter by the
lead syndication bank that the borrower filed for bankruptcy
protection, which prompted us to charge off substantially all of
this loan, or $9.5 million, during the third quarter.
"Nevertheless, our asset quality metrics such as past due loans,
classified assets and nonperforming loans continue to perform at
historically low levels. Our strong credit culture, as well as
operating in some of the best markets in the U.S., enable our
portfolio to continue performing at peer-leading levels of
classified and nonperforming loans."
BOARD OF DIRECTORS DECLARES DIVIDENDS
On Oct. 17, 2023, Pinnacle Financial's Board of Directors
approved a quarterly cash dividend of $0.22 per common share to be
paid on Nov. 24, 2023 to common shareholders of record as of the
close of business on Nov. 3, 2023. Additionally, the Board of
Directors approved a quarterly cash dividend of approximately $3.8
million, or $16.88 per share (or $0.422 per depositary share), on
Pinnacle Financial's 6.75 percent Series B Non-Cumulative Perpetual
Preferred Stock payable on Dec. 1, 2023 to shareholders of record
at the close of business on Nov. 16, 2023. The amount and timing of
any future dividend payments to both preferred and common
shareholders will be subject to the approval of Pinnacle's Board of
Directors.
WEBCAST AND CONFERENCE CALL INFORMATION
Pinnacle will host a webcast and conference call at 8:30 a.m.
CDT on Oct. 18, 2023, to discuss third quarter 2023 results and
other matters. To access the call for audio only, please call
1-877-209-7255. For the presentation and streaming audio, please
access the webcast on the investor relations page of Pinnacle's
website at www.pnfp.com.
For those unable to participate in the webcast, it will be
archived on the investor relations page of Pinnacle's website at
www.pnfp.com for 90 days following the presentation.
Pinnacle Financial Partners provides a full range of banking,
investment, trust, mortgage and insurance products and services
designed for businesses and their owners and individuals interested
in a comprehensive relationship with their financial institution.
The firm is the No. 1 bank in the Nashville-Murfreesboro-Franklin
MSA according to 2023 deposit data from the FDIC, is listed by
Forbes among the top 25 banks in the nation and earned a spot on
the 2022 list of 100 Best Companies to Work For® in the U.S., its
sixth consecutive appearance. Pinnacle was also listed in Fortune
magazine as the second best company to work for in the U.S. for
women. American Banker recognized Pinnacle as one of America’s Best
Banks to Work For nine years in a row and No. 1 among banks with
more than $11 billion in assets in 2021.
Pinnacle owns a 49 percent interest in Bankers Healthcare Group
(BHG), which provides innovative, hassle-free financial solutions
to healthcare practitioners and other professionals. Great Place to
Work and FORTUNE ranked BHG No. 4 on its 2021 list of Best
Workplaces in New York State in the small/medium business
category.
The firm began operations in a single location in downtown
Nashville, TN in October 2000 and has since grown to approximately
$47.5 billion in assets as of Sept. 30, 2023. As the second-largest
bank holding company in Tennessee, Pinnacle operates in 17
primarily urban markets and their surrounding communities.
Additional information concerning Pinnacle, which is included in
the Nasdaq Financial-100 Index, can be accessed at
www.pnfp.com.
Forward-Looking Statements
All statements, other than statements of historical fact,
included in this press release, are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. The words "expect,"
"anticipate," "intend," "may," "should," "plan," "believe," "seek,"
"estimate" and similar expressions are intended to identify such
forward-looking statements, but other statements not based on
historical information may also be considered forward-looking
statements. These forward-looking statements are subject to known
and unknown risks, uncertainties and other factors that could cause
the actual results to differ materially from the statements,
including, but not limited to: (i) deterioration in the financial
condition of borrowers of Pinnacle Bank and its subsidiaries or
BHG, including as a result of the negative impact of inflationary
pressures on our and BHG's customers and their businesses,
resulting in significant increases in loan losses and provisions
for those losses and, in the case of BHG, substitutions; (ii)
fluctuations or differences in interest rates on loans or deposits
from those that Pinnacle Financial is modeling or anticipating,
including as a result of Pinnacle Bank's inability to better match
deposit rates with the changes in the short-term rate environment,
or that affect the yield curve; (iii) the sale of investment
securities in a loss position before their value recovers,
including as a result of asset liability management strategies or
in response to liquidity needs; (iv) adverse conditions in the
national or local economies including in Pinnacle Financial's
markets throughout Tennessee, North Carolina, South Carolina,
Georgia, Alabama, Virginia and Kentucky, particularly in commercial
and residential real estate markets; (v) the inability of Pinnacle
Financial, or entities in which it has significant investments,
like BHG, to maintain the long-term historical growth rate of its,
or such entities', loan portfolio; (vi) the ability to grow and
retain low-cost core deposits and retain large, uninsured deposits,
including during times when Pinnacle Bank is seeking to limit the
rates it pays on deposits or uncertainty exists in the financial
services sector; (vii) changes in loan underwriting, credit review
or loss reserve policies associated with economic conditions,
examination conclusions, or regulatory developments; (viii)
effectiveness of Pinnacle Financial's asset management activities
in improving, resolving or liquidating lower-quality assets; (ix)
the impact of competition with other financial institutions,
including pricing pressures and the resulting impact on Pinnacle
Financial’s results, including as a result of the negative impact
to net interest margin from rising deposit and other funding costs;
(x) the results of regulatory examinations; (xi) BHG's ability to
profitably grow its business and successfully execute on its
business plans; (xii) risks of expansion into new geographic or
product markets; (xiii) any matter that would cause Pinnacle
Financial to conclude that there was impairment of any asset,
including goodwill or other intangible assets; (xiv) the
ineffectiveness of Pinnacle Bank's hedging strategies, or the
unexpected counterparty failure or hedge failure of the underlying
hedges; (xv) reduced ability to attract additional financial
advisors (or failure of such advisors to cause their clients to
switch to Pinnacle Bank), to retain financial advisors (including
as a result of the competitive environment for associates) or
otherwise to attract customers from other financial institutions;
(xvi) deterioration in the valuation of other real estate owned and
increased expenses associated therewith; (xvii) inability to comply
with regulatory capital requirements, including those resulting
from changes to capital calculation methodologies, required capital
maintenance levels or regulatory requests or directives,
particularly if Pinnacle Bank's level of applicable commercial real
estate loans were to exceed percentage levels of total capital in
guidelines recommended by its regulators; (xviii) approval of the
declaration of any dividend by Pinnacle Financial's board of
directors; (xix) the vulnerability of Pinnacle Bank's network and
online banking portals, and the systems of parties with whom
Pinnacle Bank contracts, to unauthorized access, computer viruses,
phishing schemes, spam attacks, human error, natural disasters,
power loss and other security breaches; (xx) the possibility of
increased compliance and operational costs as a result of increased
regulatory oversight (including by the Consumer Financial
Protection Bureau), including oversight of companies in which
Pinnacle Financial or Pinnacle Bank have significant investments,
like BHG, and the development of additional banking products for
Pinnacle Bank's corporate and consumer clients; (xi) Pinnacle
Financial's ability to identify potential candidates for,
consummate, and achieve synergies from, potential future
acquisitions; (xii) difficulties and delays in integrating acquired
businesses or fully realizing costs savings and other benefits from
acquisitions; (xxiii) the risks associated with Pinnacle Bank being
a minority investor in BHG, including the risk that the owners of a
majority of the equity interests in BHG decide to sell the company
or all or a portion of their ownership interests in BHG (triggering
a similar sale by Pinnacle Bank); (xxiv) changes in state and
federal legislation, regulations or policies applicable to banks
and other financial service providers, like BHG, including
regulatory or legislative developments; (xxv) fluctuations in the
valuations of Pinnacle Financial's equity investments and the
ultimate success of such investments; (xxvi) the availability of
and access to capital; (xxvii) adverse results (including costs,
fines, reputational harm, inability to obtain necessary approvals
and/or other negative effects) from current or future litigation,
regulatory examinations or other legal and/or regulatory actions;
and (xxviii) general competitive, economic, political and market
conditions. Additional factors which could affect the forward
looking statements can be found in Pinnacle Financial's Annual
Report on Form 10-K for the year ended December 31, 2022, and
subsequently filed Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K filed with the SEC and available on the SEC's
website at http://www.sec.gov. Pinnacle Financial disclaims any
obligation to update or revise any forward-looking statements
contained in this press release, which speak only as of the date
hereof, whether as a result of new information, future events or
otherwise.
Non-GAAP Financial Matters
This release contains certain non-GAAP financial measures,
including, without limitation, total revenues, net income to common
shareholders, earnings per diluted common share, revenue per
diluted common share, PPNR, efficiency ratio, noninterest expense,
noninterest income and the ratio of noninterest expense to average
assets, excluding in certain instances the impact of expenses
related to other real estate owned, gains or losses on sale of
investment securities, gains associated with the sale-leaseback
transaction completed in the second quarter of 2023 and other
matters for the accounting periods presented. This release may also
contain certain other non-GAAP capital ratios and performance
measures that exclude the impact of goodwill and core deposit
intangibles associated with Pinnacle Financial's acquisitions of
BNC, Avenue Bank, Magna Bank, CapitalMark Bank & Trust,
Mid-America Bancshares, Inc., Cavalry Bancorp, Inc. and other
acquisitions which collectively are less material to the non-GAAP
measure as well as the impact of Pinnacle Financial's Series B
Preferred Stock. The presentation of the non-GAAP financial
information is not intended to be considered in isolation or as a
substitute for any measure prepared in accordance with GAAP.
Because non-GAAP financial measures presented in this release are
not measurements determined in accordance with GAAP and are
susceptible to varying calculations, these non-GAAP financial
measures, as presented, may not be comparable to other similarly
titled measures presented by other companies.
Pinnacle Financial believes that these non-GAAP financial
measures facilitate making period-to-period comparisons and are
meaningful indications of its operating performance. In addition,
because intangible assets such as goodwill and the core deposit
intangible, and the other items excluded each vary extensively from
company to company, Pinnacle Financial believes that the
presentation of this information allows investors to more easily
compare Pinnacle Financial's results to the results of other
companies. Pinnacle Financial's management utilizes this non-GAAP
financial information to compare Pinnacle Financial's operating
performance for 2023 versus certain periods in 2022 and to
internally prepared projections.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS –
UNAUDITED
(dollars in thousands, except for share
and per share data)
September 30,
2023
December 31,
2022
September 30,
2022
ASSETS
Cash and noninterest-bearing due from
banks
$
279,652
$
268,649
$
168,010
Restricted cash
17,356
31,447
18,636
Interest-bearing due from banks
2,855,094
877,286
1,616,878
Cash and cash equivalents
3,152,102
1,177,382
1,803,524
Securities purchased with agreement to
resell
500,000
513,276
528,999
Securities available-for-sale, at fair
value
3,863,697
3,558,870
3,542,601
Securities held-to-maturity (fair value of
$2.6 billion, $2.7 billion, and $2.5 billion, net of allowance for
credit losses of $1.7 million, $1.6 million, and $1.6 million at
Sept. 30, 2023, Dec. 31, 2022, and Sept. 30, 2022,
respectively)
3,018,579
3,079,050
2,938,417
Consumer loans held-for-sale
119,489
42,237
45,509
Commercial loans held-for-sale
20,513
21,093
15,413
Loans
31,943,284
29,041,605
27,711,694
Less allowance for credit losses
(346,192
)
(300,665
)
(288,088
)
Loans, net
31,597,092
28,740,940
27,423,606
Premises and equipment, net
252,669
327,885
320,273
Equity method investment
480,996
443,185
425,892
Accrued interest receivable
177,390
161,182
110,170
Goodwill
1,846,973
1,846,973
1,846,466
Core deposits and other intangible
assets
29,216
34,555
35,666
Other real estate owned
2,555
7,952
7,787
Other assets
2,462,519
2,015,441
1,955,795
Total assets
$
47,523,790
$
41,970,021
$
41,000,118
LIABILITIES AND SHAREHOLDERS'
EQUITY
Deposits:
Noninterest-bearing
$
8,324,325
$
9,812,744
$
10,567,873
Interest-bearing
10,852,086
7,884,605
7,549,510
Savings and money market accounts
14,306,359
13,774,534
12,712,809
Time
4,813,039
3,489,355
2,859,857
Total deposits
38,295,809
34,961,238
33,690,049
Securities sold under agreements to
repurchase
195,999
194,910
190,554
Federal Home Loan Bank advances
2,110,598
464,436
889,248
Subordinated debt and other borrowings
424,718
424,055
423,834
Accrued interest payable
67,442
19,478
10,202
Other liabilities
591,583
386,512
454,119
Total liabilities
41,686,149
36,450,629
35,658,006
Preferred stock, no par value, 10.0
million shares authorized; 225,000 shares non-cumulative perpetual
preferred stock, Series B, liquidation preference $225.0 million,
issued and outstanding at Sept. 30, 2023, Dec. 31, 2022, and Sept.
30, 2022, respectively
217,126
217,126
217,126
Common stock, par value $1.00; 180.0
million shares authorized; 76.8 million, 76.5 million and 76.4
million shares issued and outstanding at Sept. 30, 2023, Dec. 31,
2022, and Sept. 30, 2022, respectively
76,753
76,454
76,413
Additional paid-in capital
3,097,702
3,074,867
3,066,527
Retained earnings
2,745,934
2,341,706
2,224,736
Accumulated other comprehensive loss, net
of taxes
(299,874
)
(190,761
)
(242,690
)
Total shareholders' equity
5,837,641
5,519,392
5,342,112
Total liabilities and shareholders'
equity
$
47,523,790
$
41,970,021
$
41,000,118
This information is preliminary
and based on company data available at the time of the
presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME –
UNAUDITED
(dollars in thousands, except for share
and per share data)
Three months ended
Nine months ended
September 30,
2023
June 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Interest income:
Loans, including fees
$
508,963
$
478,896
$
315,935
$
1,419,761
$
795,164
Securities
Taxable
36,525
31,967
18,204
97,850
41,977
Tax-exempt
24,185
24,603
21,408
72,590
58,752
Federal funds sold and other
57,621
39,773
16,217
118,371
26,864
Total interest income
627,294
575,239
371,764
1,708,572
922,757
Interest expense:
Deposits
280,305
228,668
55,189
685,562
83,620
Securities sold under agreements to
repurchase
1,071
783
182
2,449
320
FHLB advances and other borrowings
28,676
30,395
10,609
75,695
28,984
Total interest expense
310,052
259,846
65,980
763,706
112,924
Net interest income
317,242
315,393
305,784
944,866
809,833
Provision for credit losses
26,826
31,689
27,493
77,282
43,120
Net interest income after provision for
credit losses
290,416
283,704
278,291
867,584
766,713
Noninterest income:
Service charges on deposit accounts
12,665
12,180
10,906
36,563
33,552
Investment services
13,253
14,174
10,780
39,022
34,676
Insurance sales commissions
2,882
3,252
2,928
10,598
9,518
Gains on mortgage loans sold, net
2,012
1,567
1,117
5,632
7,333
Investment losses (gains) on sales,
net
(9,727
)
(9,961
)
217
(19,688
)
156
Trust fees
6,640
6,627
5,706
19,696
17,744
Income from equity method investment
24,967
26,924
41,341
70,970
124,461
Gain on sale of fixed assets
87
85,724
227
85,946
425
Other noninterest income
38,018
33,352
31,583
105,426
105,938
Total noninterest income
90,797
173,839
104,805
354,165
333,803
Noninterest expense:
Salaries and employee benefits
130,344
132,443
129,910
398,495
378,373
Equipment and occupancy
36,900
33,706
27,886
100,959
80,343
Other real estate, net
33
58
(90
)
190
101
Marketing and other business
development
5,479
5,664
4,958
17,085
13,494
Postage and supplies
2,621
2,863
2,795
8,303
7,486
Amortization of intangibles
1,765
1,780
1,951
5,339
5,873
Other noninterest expense
36,091
35,127
31,843
106,230
92,282
Total noninterest expense
213,233
211,641
199,253
636,601
577,952
Income before income taxes
167,980
245,902
183,843
585,148
522,564
Income tax expense
35,377
48,603
35,185
117,975
99,669
Net income
132,603
197,299
148,658
467,173
422,895
Preferred stock dividends
(3,798
)
(3,798
)
(3,798
)
(11,394
)
(11,394
)
Net income available to common
shareholders
$
128,805
$
193,501
$
144,860
$
455,779
$
411,501
Per share information:
Basic net income per common share
$
1.69
$
2.55
$
1.91
$
6.00
$
5.43
Diluted net income per common share
$
1.69
$
2.54
$
1.91
$
5.99
$
5.42
Weighted average common shares
outstanding:
Basic
76,044,182
76,030,081
75,761,930
75,998,965
75,723,129
Diluted
76,201,916
76,090,321
75,979,056
76,102,622
75,945,469
This information is preliminary
and based on company data available at the time of the
presentation.
PINNACLE FINANCIAL PARTNERS,
INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
EQUITY (Unaudited)
(dollars and shares in thousands)
Preferred
Stock
Amount
Common Stock
Additional
Paid-in Capital
Retained
Earnings
Accumulated Other
Comp. Income
(Loss), net
Total
Shareholders'
Equity
Shares
Amounts
Balance at December 31, 2021
$
217,126
76,143
$
76,143
$
3,045,802
$
1,864,350
$
107,186
$
5,310,607
Exercise of employee common stock options
& related tax benefits
—
14
14
264
—
—
278
Preferred dividends paid ($50.64 per
share)
—
—
—
—
(11,394
)
—
(11,394
)
Common dividends paid ($0.66 per
share)
—
—
—
—
(51,115
)
(51,115
)
Issuance of restricted common shares, net
of forfeitures
—
207
207
(169
)
—
—
38
Restricted shares withheld for taxes &
related tax benefits
—
(46
)
(46
)
(4,657
)
—
—
(4,703
)
Issuance of common stock pursuant to
restricted stock unit (RSU) and performance stock unit (PSU)
agreements, net of shares withheld for taxes & related tax
benefits
—
95
95
(5,595
)
—
—
(5,500
)
Compensation expense for restricted shares
& performance stock units
—
—
—
30,882
—
—
30,882
Net income
—
—
—
—
422,895
—
422,895
Other comprehensive loss
—
—
—
—
—
(349,876
)
(349,876
)
Balance at Sept. 30, 2022
$
217,126
76,413
$
76,413
$
3,066,527
$
2,224,736
$
(242,690
)
$
5,342,112
Balance at December 31, 2022
$
217,126
76,454
$
76,454
$
3,074,867
$
2,341,706
$
(190,761
)
$
5,519,392
Exercise of employee common stock options
& related tax benefits
—
40
40
931
—
—
971
Preferred dividends paid ($50.64 per
share)
—
—
—
—
(11,394
)
—
(11,394
)
Common dividends paid ($0.66 per
share)
—
—
—
—
(51,551
)
—
(51,551
)
Issuance of restricted common shares, net
of forfeitures
—
219
219
(219
)
—
—
—
Restricted shares withheld for taxes &
related tax benefits
—
(53
)
(53
)
(3,712
)
—
—
(3,765
)
Issuance of common stock pursuant to RSU
and PSU agreements, net of shares withheld for taxes & related
tax benefits
—
93
93
(3,738
)
—
—
(3,645
)
Compensation expense for restricted shares
& performance stock units
—
—
—
29,573
—
—
29,573
Net income
—
—
—
—
467,173
—
467,173
Other comprehensive loss
—
—
—
—
—
(109,113
)
(109,113
)
Balance at Sept. 30, 2023
$
217,126
76,753
$
76,753
$
3,097,702
$
2,745,934
$
(299,874
)
$
5,837,641
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA –
UNAUDITED
(dollars in thousands)
September
June
March
December
September
June
2023
2023
2023
2022
2022
2022
Balance sheet data, at quarter
end:
Commercial and industrial loans
$
11,307,611
10,983,911
10,723,327
10,241,362
9,748,994
9,295,808
Commercial real estate - owner occupied
loans
3,944,616
3,845,359
3,686,796
3,587,257
3,426,271
3,243,018
Commercial real estate - investment
loans
5,957,426
5,682,652
5,556,484
5,277,454
5,122,127
4,909,598
Commercial real estate - multifamily and
other loans
1,490,184
1,488,236
1,331,249
1,265,165
1,042,854
951,998
Consumer real estate - mortgage loans
4,768,780
4,692,673
4,531,285
4,435,046
4,271,913
4,047,051
Construction and land development
loans
3,942,143
3,904,774
3,909,024
3,679,498
3,548,970
3,386,866
Consumer and other loans
532,524
555,685
559,706
555,823
550,565
498,757
Total loans
31,943,284
31,153,290
30,297,871
29,041,605
27,711,694
26,333,096
Allowance for credit losses
(346,192
)
(337,459
)
(313,841
)
(300,665
)
(288,088
)
(272,483
)
Securities
6,882,276
6,623,457
6,878,831
6,637,920
6,481,018
6,553,893
Total assets
47,523,790
46,875,982
45,119,587
41,970,021
41,000,118
40,121,292
Noninterest-bearing deposits
8,324,325
8,436,799
9,018,439
9,812,744
10,567,873
11,058,198
Total deposits
38,295,809
37,722,661
36,178,553
34,961,238
33,690,049
32,595,303
Securities sold under agreements to
repurchase
195,999
163,774
149,777
194,910
190,554
199,585
FHLB advances
2,110,598
2,200,917
2,166,508
464,436
889,248
1,289,059
Subordinated debt and other borrowings
424,718
424,497
424,276
424,055
423,834
423,614
Total shareholders' equity
5,837,641
5,843,759
5,684,128
5,519,392
5,342,112
5,315,239
Balance sheet data, quarterly
averages:
Total loans
$
31,529,854
30,882,205
29,633,640
28,402,197
27,021,031
25,397,389
Securities
6,801,285
6,722,247
6,765,126
6,537,262
6,542,026
6,446,774
Federal funds sold and other
4,292,956
3,350,705
2,100,757
1,828,588
2,600,978
2,837,679
Total earning assets
42,624,095
40,955,157
38,499,523
36,768,047
36,164,035
34,681,842
Total assets
47,266,199
45,411,961
42,983,854
41,324,251
40,464,649
38,780,786
Noninterest-bearing deposits
8,515,733
8,599,781
9,332,317
10,486,233
10,926,069
10,803,439
Total deposits
38,078,665
36,355,859
35,291,775
34,177,281
33,108,415
31,484,100
Securities sold under agreements to
repurchase
184,681
162,429
219,082
199,610
215,646
216,846
FHLB advances
2,132,638
2,352,045
1,130,356
701,813
1,010,865
1,095,531
Subordinated debt and other borrowings
426,855
426,712
426,564
427,503
426,267
427,191
Total shareholders' equity
5,898,196
5,782,239
5,605,604
5,433,274
5,403,244
5,316,219
Statement of operations data, for the
three months ended:
Interest income
$
627,294
575,239
506,039
451,178
371,764
292,376
Interest expense
310,052
259,846
193,808
131,718
65,980
27,802
Net interest income
317,242
315,393
312,231
319,460
305,784
264,574
Provision for credit losses
26,826
31,689
18,767
24,805
27,493
12,907
Net interest income after provision for
credit losses
290,416
283,704
293,464
294,655
278,291
251,667
Noninterest income
90,797
173,839
89,529
82,321
104,805
125,502
Noninterest expense
213,233
211,641
211,727
202,047
199,253
196,038
Income before income taxes
167,980
245,902
171,266
174,929
183,843
181,131
Income tax expense
35,377
48,603
33,995
37,082
35,185
36,004
Net income
132,603
197,299
137,271
137,847
148,658
145,127
Preferred stock dividends
(3,798
)
(3,798
)
(3,798
)
(3,798
)
(3,798
)
(3,798
)
Net income available to common
shareholders
$
128,805
193,501
133,473
134,049
144,860
141,329
Profitability and other ratios:
Return on avg. assets (1)
1.08
%
1.71
%
1.26
%
1.29
%
1.42
%
1.46
%
Return on avg. equity (1)
8.66
%
13.42
%
9.66
%
9.79
%
10.64
%
10.66
%
Return on avg. common equity (1)
9.00
%
13.95
%
10.05
%
10.20
%
11.08
%
11.12
%
Return on avg. tangible common equity
(1)
13.43
%
21.06
%
15.43
%
15.95
%
17.40
%
17.62
%
Common stock dividend payout ratio
(14)
11.35
%
11.04
%
12.07
%
12.26
%
12.34
%
12.63
%
Net interest margin (2)
3.06
%
3.20
%
3.40
%
3.60
%
3.47
%
3.17
%
Noninterest income to total revenue
(3)
22.25
%
35.53
%
22.28
%
20.49
%
25.53
%
32.17
%
Noninterest income to avg. assets (1)
0.76
%
1.54
%
0.84
%
0.79
%
1.03
%
1.30
%
Noninterest exp. to avg. assets (1)
1.79
%
1.87
%
2.00
%
1.94
%
1.95
%
2.03
%
Efficiency ratio (4)
52.26
%
43.26
%
52.70
%
50.29
%
48.53
%
50.26
%
Avg. loans to avg. deposits
82.80
%
84.94
%
83.97
%
83.10
%
81.61
%
80.67
%
Securities to total assets
14.48
%
14.13
%
15.25
%
15.82
%
15.81
%
16.34
%
This information is preliminary
and based on company data available at the time of the
presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND
EXPENSE, RATES AND YIELDS-UNAUDITED
(dollars in thousands)
Three months ended
Three months ended
September 30, 2023
September 30, 2022
Average
Balances
Interest
Rates/
Yields
Average
Balances
Interest
Rates/
Yields
Interest-earning assets
Loans (1) (2)
$
31,529,854
$
508,963
6.50
%
$
27,021,031
$
315,935
4.73
%
Securities
Taxable
3,542,383
36,525
4.09
%
3,436,460
18,204
2.10
%
Tax-exempt (2)
3,258,902
24,185
3.51
%
3,105,566
21,408
3.28
%
Interest-bearing due from banks
3,553,640
51,109
5.71
%
1,491,338
8,666
2.31
%
Resell agreements
503,153
3,258
2.57
%
920,786
5,616
2.42
%
Federal funds sold
—
—
—
%
—
—
—
%
Other
236,163
3,254
5.47
%
188,854
1,935
4.06
%
Total interest-earning assets
42,624,095
$
627,294
5.95
%
36,164,035
$
371,764
4.20
%
Nonearning assets
Intangible assets
1,877,340
1,883,350
Other nonearning assets
2,764,764
2,417,264
Total assets
$
47,266,199
$
40,464,649
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking
10,414,869
98,974
3.77
%
6,763,990
18,008
1.06
%
Savings and money market
14,131,277
128,453
3.61
%
12,765,435
29,347
0.91
%
Time
5,016,786
52,878
4.18
%
2,652,921
7,834
1.17
%
Total interest-bearing deposits
29,562,932
280,305
3.76
%
22,182,346
55,189
0.99
%
Securities sold under agreements to
repurchase
184,681
1,071
2.30
%
215,646
182
0.34
%
Federal Home Loan Bank advances
2,132,638
22,710
4.22
%
1,010,865
5,762
2.26
%
Subordinated debt and other borrowings
426,855
5,966
5.54
%
426,267
4,847
4.51
%
Total interest-bearing liabilities
32,307,106
310,052
3.81
%
23,835,124
65,980
1.10
%
Noninterest-bearing deposits
8,515,733
—
—
10,926,069
—
—
Total deposits and interest-bearing
liabilities
40,822,839
$
310,052
3.01
%
34,761,193
$
65,980
0.75
%
Other liabilities
545,164
300,212
Shareholders' equity
5,898,196
5,403,244
Total liabilities and shareholders'
equity
$
47,266,199
$
40,464,649
Net interest
income
$
317,242
$
305,784
Net interest spread (3)
2.14
%
3.10
%
Net interest margin (4)
3.06
%
3.47
%
(1) Average balances of nonperforming
loans are included in the above amounts.
(2) Yields computed on tax-exempt
instruments on a tax equivalent basis and included $12.0 million of
taxable equivalent income for the three months ended September 30,
2023 compared to $10.8 million for the three months ended September
30, 2022. The tax-exempt benefit has been reduced by the projected
impact of tax-exempt income that will be disallowed pursuant to IRS
Regulations as of and for the then current period presented.
(3) Yields realized on interest-bearing
assets less the rates paid on interest-bearing liabilities. The net
interest spread calculation excludes the impact of demand deposits.
Had the impact of demand deposits been included, the net interest
spread for the three months ended September 30, 2023 would have
been 2.94% compared to a net interest spread of 3.44% for the three
months ended September 30, 2022.
(4) Net interest margin is the result of
annualized net interest income calculated on a tax equivalent basis
divided by average interest-earning assets for the period.
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND
EXPENSE, RATES AND YIELDS-UNAUDITED
(dollars in thousands)
Nine months ended
Nine months ended
September 30, 2023
September 30, 2022
Average
Balances
Interest
Rates/
Yields
Average
Balances
Interest
Rates/
Yields
Interest-earning assets
Loans (1) (2)
$
30,688,846
$
1,419,761
6.27
%
$
25,433,939
$
795,164
4.27
%
Securities
Taxable
3,482,068
97,850
3.76
%
3,400,046
41,977
1.65
%
Tax-exempt (2)
3,280,951
72,590
3.53
%
2,978,901
58,752
3.18
%
Interest-bearing due from banks
2,522,300
100,275
5.32
%
2,050,401
12,580
0.82
%
Resell agreements
508,467
9,960
2.62
%
1,175,119
10,674
1.21
%
Federal funds sold
—
—
—
%
—
—
—
%
Other
225,402
8,136
4.83
%
179,293
3,610
2.69
%
Total interest-earning assets
40,708,034
$
1,708,572
5.72
%
35,217,699
$
922,757
3.61
%
Nonearning assets
Intangible assets
1,879,100
1,876,614
Other nonearning assets
2,649,291
2,206,600
Total assets
$
45,236,425
$
39,300,913
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking
9,199,603
227,263
3.30
%
6,560,068
26,741
0.54
%
Savings and money market
14,063,699
335,997
3.19
%
12,479,841
43,542
0.47
%
Time
4,509,386
122,302
3.63
%
2,272,063
13,337
0.78
%
Total interest-bearing deposits
27,772,688
685,562
3.30
%
21,311,972
83,620
0.52
%
Securities sold under agreements to
repurchase
188,605
2,449
1.74
%
204,251
320
0.21
%
Federal Home Loan Bank advances
1,875,351
58,284
4.16
%
998,828
15,467
2.07
%
Subordinated debt and other borrowings
426,711
17,411
5.46
%
431,681
13,517
4.19
%
Total interest-bearing liabilities
30,263,355
763,706
3.37
%
22,946,732
112,924
0.66
%
Noninterest-bearing deposits
8,812,953
—
—
10,737,610
—
—
Total deposits and interest-bearing
liabilities
39,076,308
$
763,706
2.61
%
33,684,342
$
112,924
0.45
%
Other liabilities
396,965
266,018
Shareholders' equity
5,763,152
5,350,553
Total liabilities and shareholders'
equity
$
45,236,425
$
39,300,913
Net interest
income
$
944,866
$
809,833
Net interest spread (3)
2.35
%
2.95
%
Net interest margin (4)
3.22
%
3.18
%
(1) Average balances of nonperforming
loans are included in the above amounts.
(2) Yields computed on tax-exempt
instruments on a tax equivalent basis and included $34.1 million of
taxable equivalent income for the nine months ended September 30,
2023 compared to $28.8 million for the nine months ended September
30, 2022. The tax-exempt benefit has been reduced by the projected
impact of tax-exempt income that will be disallowed pursuant to IRS
Regulations as of and for the then current period presented.
(3) Yields realized on interest-bearing
assets less the rates paid on interest-bearing liabilities. The net
interest spread calculation excludes the impact of demand deposits.
Had the impact of demand deposits been included, the net interest
spread for the nine months ended September 30, 2023 would have been
3.11% compared to a net interest spread of 3.16% for the nine
months ended September 30, 2022.
(4) Net interest margin is the result of
annualized net interest income calculated on a tax equivalent basis
divided by average interest-earning assets for the period.
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA –
UNAUDITED
(dollars in thousands)
September
June
March
December
September
June
2023
2023
2023
2022
2022
2022
Asset quality information and
ratios:
Nonperforming assets:
Nonaccrual loans
$
42,950
44,289
36,988
38,116
34,115
15,459
ORE and other nonperforming assets
(NPAs)
3,019
3,105
7,802
7,952
7,787
8,237
Total nonperforming assets
$
45,969
47,394
44,790
46,068
41,902
23,696
Past due loans over 90 days and still
accruing interest
$
4,969
5,257
5,284
4,406
6,757
3,840
Accruing purchase credit deteriorated
loans
$
7,010
7,415
7,684
8,060
8,759
9,194
Net loan charge-offs
$
18,093
9,771
7,291
11,729
10,983
877
Allowance for credit losses to nonaccrual
loans
806.0
%
762.0
%
848.5
%
788.8
%
844.5
%
1,762.6
%
As a percentage of total loans:
Past due accruing loans over 30 days
0.16
%
0.14
%
0.14
%
0.15
%
0.13
%
0.11
%
Potential problem loans
0.42
%
0.32
%
0.22
%
0.19
%
0.21
%
0.32
%
Allowance for credit losses
1.08
%
1.08
%
1.04
%
1.04
%
1.04
%
1.03
%
Nonperforming assets to total loans, ORE
and other NPAs
0.14
%
0.15
%
0.15
%
0.16
%
0.15
%
0.09
%
Classified asset ratio (Pinnacle Bank)
(6)
4.6
%
3.3
%
2.7
%
2.4
%
2.6
%
2.9
%
Annualized net loan charge-offs to avg.
loans (5)
0.23
%
0.13
%
0.10
%
0.17
%
0.16
%
0.01
%
Interest rates and yields:
Loans
6.50
%
6.30
%
6.00
%
5.54
%
4.73
%
4.07
%
Securities
3.81
%
3.66
%
3.47
%
3.19
%
2.66
%
2.29
%
Total earning assets
5.95
%
5.74
%
5.45
%
5.02
%
4.20
%
3.49
%
Total deposits, including non-interest
bearing
2.92
%
2.52
%
2.03
%
1.40
%
0.66
%
0.23
%
Securities sold under agreements to
repurchase
2.30
%
1.93
%
1.10
%
0.94
%
0.34
%
0.15
%
FHLB advances
4.22
%
4.20
%
3.94
%
3.04
%
2.26
%
1.92
%
Subordinated debt and other borrowings
5.54
%
5.44
%
5.38
%
4.98
%
4.51
%
4.04
%
Total deposits and interest-bearing
liabilities
3.01
%
2.65
%
2.12
%
1.47
%
0.75
%
0.34
%
Capital and other ratios (6):
Pinnacle Financial ratios:
Shareholders' equity to total assets
12.3
%
12.5
%
12.6
%
13.2
%
13.0
%
13.2
%
Common equity Tier one
10.3
%
10.2
%
9.9
%
10.0
%
10.0
%
10.2
%
Tier one risk-based
10.9
%
10.8
%
10.5
%
10.5
%
10.7
%
10.9
%
Total risk-based
12.8
%
12.7
%
12.4
%
12.4
%
12.6
%
12.9
%
Leverage
9.4
%
9.5
%
9.6
%
9.7
%
9.7
%
9.8
%
Tangible common equity to tangible
assets
8.2
%
8.3
%
8.3
%
8.5
%
8.3
%
8.4
%
Pinnacle Bank ratios:
Common equity Tier one
11.2
%
11.1
%
10.8
%
10.9
%
11.1
%
11.0
%
Tier one risk-based
11.2
%
11.1
%
10.8
%
10.9
%
11.1
%
11.0
%
Total risk-based
12.0
%
11.9
%
11.6
%
11.6
%
11.8
%
11.7
%
Leverage
9.7
%
9.8
%
9.9
%
10.1
%
10.1
%
9.9
%
Construction and land development loans as
a percentage of total capital (17)
83.1
%
84.5
%
88.5
%
85.9
%
85.4
%
87.4
%
Non-owner occupied commercial real estate
and multi-family as a percentage of total capital (17)
256.4
%
256.7
%
261.1
%
249.6
%
244.0
%
250.2
%
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA –
UNAUDITED
(dollars in thousands, except per share
data)
September
June
March
December
September
June
2023
2023
2023
2022
2022
2022
Per share data:
Earnings per common share – basic
$
1.69
2.55
1.76
1.77
1.91
1.87
Earnings per common share - basic,
excluding non-GAAP adjustments
$
1.79
1.80
1.76
1.77
1.91
1.87
Earnings per common share – diluted
$
1.69
2.54
1.76
1.76
1.91
1.86
Earnings per common share - diluted,
excluding non-GAAP adjustments
$
1.79
1.79
1.76
1.76
1.91
1.86
Common dividends per share
$
0.22
0.22
0.22
0.22
0.22
0.22
Book value per common share at quarter end
(7)
$
73.23
73.32
71.24
69.35
67.07
66.74
Tangible book value per common share at
quarter end (7)
$
48.78
48.85
46.75
44.74
42.44
42.08
Revenue per diluted common share
$
5.35
6.43
5.28
5.27
5.40
5.14
Revenue per diluted common share,
excluding non-GAAP adjustments
$
5.48
5.43
5.28
5.27
5.40
5.14
Investor information:
Closing sales price of common stock on
last trading day of quarter
$
67.04
56.65
55.16
73.40
81.10
72.31
High closing sales price of common stock
during quarter
$
75.95
57.93
82.79
87.81
87.66
91.42
Low closing sales price of common stock
during quarter
$
56.41
46.17
52.51
70.74
68.68
68.56
Closing sales price of depositary shares
on last trading day of quarter
$
22.70
23.75
24.15
25.35
25.33
25.19
High closing sales price of depositary
shares during quarter
$
23.85
24.90
25.71
25.60
26.23
26.44
Low closing sales price of depositary
shares during quarter
$
21.54
19.95
20.77
23.11
24.76
24.75
Other information:
Residential mortgage loan sales:
Gross loans sold
$
198,247
192,948
120,146
134,514
181,139
239,736
Gross fees (8)
$
4,350
4,133
2,795
3,149
3,189
6,523
Gross fees as a percentage of loans
originated
2.19
%
2.14
%
2.33
%
2.34
%
1.76
%
2.72
%
Net gain (loss) on residential mortgage
loans sold
$
2,012
1,567
2,053
(65
)
1,117
2,150
Investment gains (losses) on sales of
securities, net (13)
$
(9,727
)
(9,961
)
—
—
217
—
Brokerage account assets, at quarter end
(9)
$
9,041,716
9,007,230
8,634,339
8,049,125
7,220,405
6,761,480
Trust account managed assets, at quarter
end
$
5,047,128
5,084,592
4,855,951
4,560,752
4,162,639
4,207,406
Core deposits (10)
$
33,606,783
32,780,767
32,054,111
31,301,077
30,748,817
30,011,444
Core deposits to total funding (10)
81.9
%
80.9
%
82.4
%
86.8
%
87.4
%
87.0
%
Risk-weighted assets
$
39,527,086
38,853,588
38,117,659
36,216,901
35,281,315
33,366,074
Number of offices
128
127
126
123
120
119
Total core deposits per office
$
262,553
258,116
254,398
254,480
256,240
252,197
Total assets per full-time equivalent
employee
$
14,274
14,166
13,750
12,948
12,875
13,052
Annualized revenues per full-time
equivalent employee
$
486.2
593.0
496.5
491.8
511.5
509.0
Annualized expenses per full-time
equivalent employee
$
254.1
256.5
261.7
247.3
248.2
255.8
Number of employees (full-time
equivalent)
3,329.5
3,309.0
3,281.5
3,241.5
3,184.5
3,074.0
Associate retention rate (11)
93.6
%
94.1
%
93.8
%
93.8
%
93.6
%
93.3
%
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED
QUARTERLY FINANCIAL DATA – UNAUDITED
Three months ended
Nine months ended
(dollars in thousands, except per share
data)
September
June
September
September
September
2023
2023
2022
2023
2022
Net interest income
$
317,242
315,393
305,784
944,866
809,833
Noninterest income
90,797
173,839
104,805
354,165
333,803
Total revenues
408,039
489,232
410,589
1,299,031
1,143,636
Less: Investment losses (gains) on sales
of securities, net
9,727
9,961
(217
)
19,688
(156
)
Gain on sale of fixed assets as a result
of sale-leaseback transaction
—
(85,692
)
—
(85,692
)
—
Total revenues excluding the impact of
adjustments noted above
$
417,766
413,501
410,372
1,233,027
1,143,480
Noninterest expense
$
213,233
211,641
199,253
636,601
577,952
Less: ORE expense (benefit)
33
58
(90
)
190
101
Noninterest expense excluding the impact
of adjustments noted above
$
213,200
211,583
199,343
636,411
577,851
Pre-tax income
$
167,980
245,902
183,843
585,148
522,564
Provision for credit losses
26,826
31,689
27,493
77,282
43,120
Pre-tax pre-provision net revenue
194,806
277,591
211,336
662,430
565,684
Less: Adjustments noted above
9,760
(75,673
)
(307
)
(65,814
)
(55
)
Adjusted pre-tax pre-provision net revenue
(12)
$
204,566
201,918
211,029
596,616
565,629
Noninterest income
$
90,797
173,839
104,805
354,165
333,803
Less: Adjustments noted above
9,727
(75,731
)
(217
)
(66,004
)
(156
)
Noninterest income excluding the impact of
adjustments noted above
$
100,524
98,108
104,588
288,161
333,647
Efficiency ratio (4)
52.26
%
43.26
%
48.53
%
49.01
%
50.54
%
Adjustments noted above
(1.23
)%
7.91
%
0.05
%
2.60
%
(0.01
)%
Efficiency ratio excluding adjustments
noted above (4)
51.03
%
51.17
%
48.58
%
51.61
%
50.53
%
Total average assets
$
47,266,199
45,411,961
40,464,649
45,236,425
39,300,913
Noninterest income to average assets
(1)
0.76
%
1.54
%
1.03
%
1.05
%
1.14
%
Less: Adjustments noted above
0.08
%
(0.67
)%
—
%
(0.20
)%
—
%
Noninterest income (excluding adjustments
noted above) to average assets (1)
0.84
%
0.87
%
1.03
%
0.85
%
1.14
%
Noninterest expense to average assets
(1)
1.79
%
1.87
%
1.95
%
1.88
%
1.97
%
Adjustments as noted above
—
%
—
%
—
%
—
%
—
%
Noninterest expense (excluding adjustments
noted above) to average assets (1)
1.79
%
1.87
%
1.95
%
1.88
%
1.97
%
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED
QUARTERLY FINANCIAL DATA – UNAUDITED
Three months ended
(dollars in thousands, except per share
data)
September
June
March
December
September
June
2023
2023
2023
2022
2022
2022
Net income available to common
shareholders
$
128,805
193,501
133,473
134,049
144,860
141,329
Investment (gains) losses on sales of
securities, net
9,727
9,961
—
—
(217
)
—
Gain on sale of fixed assets as a result
of sale-leaseback transaction
—
(85,692
)
—
—
—
—
ORE expense (benefit)
33
58
99
179
(90
)
86
Tax effect on adjustments noted above
(16)
(2,440
)
18,918
(25
)
(47
)
80
(22
)
Net income available to common
shareholders excluding adjustments noted above
$
136,125
136,746
133,547
134,181
144,633
141,393
Basic earnings per common share
$
1.69
2.55
1.76
1.77
1.91
1.87
Adjustment due to investment (gains)
losses on sales of securities, net
0.13
0.13
—
—
—
—
Adjustment due to gain on sale of fixed
assets as a result of sale-leaseback transaction
—
(1.13
)
—
—
—
—
Adjustment due to ORE expense
(benefit)
—
—
—
—
—
—
Adjustment due to tax effect on
adjustments noted above (16)
(0.03
)
0.25
—
—
—
—
Basic earnings per common share excluding
adjustments noted above
$
1.79
1.80
1.76
1.77
1.91
1.87
Diluted earnings per common share
$
1.69
2.54
1.76
1.76
1.91
1.86
Adjustment due to investment (gains)
losses on sales of securities, net
0.13
0.13
—
—
—
—
Adjustment due to gain on sale of fixed
assets as a result of sale-leaseback transaction
—
(1.13
)
—
—
—
—
Adjustment due to ORE expense
(benefit)
—
—
—
—
—
—
Adjustment due to tax effect on
adjustments noted above (16)
(0.03
)
0.25
—
—
—
—
Diluted earnings per common share
excluding the adjustments noted above
$
1.79
1.79
1.76
1.76
1.91
1.86
Revenue per diluted common share
$
5.35
6.43
5.28
5.27
5.40
5.14
Adjustments due to revenue-impacting items
as noted above
0.13
(1.00
)
—
—
—
—
Revenue per diluted common share excluding
adjustments due to revenue-impacting items as noted above
$
5.48
5.43
5.28
5.27
5.40
5.14
Book value per common share at quarter end
(7)
$
73.23
73.32
71.24
69.35
67.07
66.74
Adjustment due to goodwill, core deposit
and other intangible assets
(24.45
)
(24.47
)
(24.49
)
(24.61
)
(24.63
)
(24.66
)
Tangible book value per common share at
quarter end (7)
$
48.78
48.85
46.75
44.74
42.44
42.08
Equity method investment (15)
Fee income from BHG, net of
amortization
$
24,967
26,924
19,079
21,005
41,341
49,465
Funding cost to support investment
6,546
6,005
5,768
5,438
4,680
3,887
Pre-tax impact of BHG
18,421
20,919
13,311
15,567
36,661
45,578
Income tax expense at statutory rates
(16)
4,605
5,230
3,328
4,069
9,583
11,914
Earnings attributable to BHG
$
13,816
15,689
9,983
11,498
27,078
33,664
Basic earnings per common share
attributable to BHG
$
0.18
0.21
0.13
0.15
0.36
0.44
Diluted earnings per common share
attributable to BHG
$
0.18
0.21
0.13
0.15
0.36
0.44
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED
QUARTERLY FINANCIAL DATA – UNAUDITED
Nine months ended
(dollars in thousands, except per share
data)
Sept. 30,
2023
2022
Net income available to common
shareholders
$
455,779
411,501
Investment losses on sales of securities,
net
19,688
(156
)
Gain on sale of fixed assets as a result
of sale-leaseback transaction
(85,692
)
—
ORE expense
190
101
Tax effect on adjustments noted above
(16)
16,454
14
Net income available to common
shareholders excluding adjustments noted above
$
406,419
411,460
Basic earnings per common share
$
6.00
5.43
Adjustment due to investment losses on
sales of securities, net
0.26
—
Adjustment due to gain on sale of fixed
assets as a result of sale-leaseback transaction
(1.13
)
—
Adjustment due to ORE expense
—
—
Adjustment due to tax effect on
adjustments noted above (16)
0.22
—
Basic earnings per common share excluding
adjustments noted above
$
5.35
5.43
Diluted earnings per common share
5.99
5.42
Adjustment due to investment losses on
sales of securities, net
0.26
—
Adjustment due to gain on sale of fixed
assets as a result of sale-leaseback transaction
(1.13
)
—
Adjustment due to ORE expense
—
—
Adjustment due to tax effect on
adjustments noted above (16)
0.22
—
Diluted earnings per common share
excluding the adjustments noted above
$
5.34
5.42
Revenue per diluted common share
$
17.07
15.06
Adjustments due to revenue-impacting items
as noted above
(0.87
)
—
Revenue per diluted common share excluding
adjustments due to revenue-impacting items noted above
$
16.20
15.06
Equity method investment (15)
Fee income from BHG, net of
amortization
$
70,970
124,461
Funding cost to support investment
18,332
12,102
Pre-tax impact of BHG
52,638
112,359
Income tax expense at statutory rates
(16)
13,160
29,371
Earnings attributable to BHG
$
39,478
82,988
Basic earnings per common share
attributable to BHG
$
0.52
1.10
Diluted earnings per common share
attributable to BHG
$
0.52
1.09
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED
QUARTERLY FINANCIAL DATA – UNAUDITED
Three months ended
Nine months ended
(dollars in thousands, except per share
data)
September
June
September
September
September
2023
2023
2022
2023
2022
Return on average assets (1)
1.08
%
1.71
%
1.42
%
1.35
%
1.40
%
Adjustments as noted above
0.06
%
(0.50
)%
—
%
(0.15
)%
—
%
Return on average assets excluding
adjustments noted above (1)
1.14
%
1.21
%
1.42
%
1.20
%
1.40
%
Tangible assets:
Total assets
$
47,523,790
46,875,982
41,000,118
$
47,523,790
41,000,118
Less: Goodwill
(1,846,973
)
(1,846,973
)
(1,846,466
)
(1,846,973
)
(1,846,466
)
Core deposit and other intangible
assets
(29,216
)
(30,981
)
(35,666
)
(29,216
)
(35,666
)
Net tangible assets
$
45,647,601
44,998,028
39,117,986
$
45,647,601
39,117,986
Tangible common equity:
Total shareholders' equity
$
5,837,641
5,843,759
5,342,112
$
5,837,641
5,342,112
Less: Preferred shareholders' equity
(217,126
)
(217,126
)
(217,126
)
(217,126
)
(217,126
)
Total common shareholders' equity
5,620,515
5,626,633
5,124,986
5,620,515
5,124,986
Less: Goodwill
(1,846,973
)
(1,846,973
)
(1,846,466
)
(1,846,973
)
(1,846,466
)
Core deposit and other intangible
assets
(29,216
)
(30,981
)
(35,666
)
(29,216
)
(35,666
)
Net tangible common equity
$
3,744,326
3,748,679
3,242,854
$
3,744,326
3,242,854
Ratio of tangible common equity to
tangible assets
8.20
%
8.33
%
8.29
%
8.20
%
8.29
%
Average tangible assets:
Average assets
$
47,266,199
45,411,961
40,464,649
$
45,236,425
39,300,913
Less: Average goodwill
(1,846,973
)
(1,846,973
)
(1,846,466
)
(1,846,973
)
(1,842,777
)
Average core deposit and other intangible
assets
(30,367
)
(32,135
)
(36,884
)
(32,127
)
(33,837
)
Net average tangible assets
$
45,388,859
43,532,853
38,581,299
$
43,357,325
37,424,299
Return on average assets (1)
1.08
%
1.71
%
1.42
%
1.35
%
1.40
%
Adjustment due to goodwill, core deposit
and other intangible assets
0.05
%
0.07
%
0.07
%
0.06
%
0.07
%
Return on average tangible assets (1)
1.13
%
1.78
%
1.49
%
1.41
%
1.47
%
Adjustments as noted above
0.06
%
(0.52
)%
—
%
(0.16
)%
—
%
Return on average tangible assets
excluding adjustments noted above (1)
1.19
%
1.26
%
1.49
%
1.25
%
1.47
%
Average tangible common equity:
Average shareholders' equity
$
5,898,196
5,782,239
5,403,244
$
5,763,152
5,350,553
Less: Average preferred equity
(217,126
)
(217,126
)
(217,126
)
(217,126
)
(217,126
)
Average common equity
5,681,070
5,565,113
5,186,118
5,546,026
5,133,427
Less: Average goodwill
(1,846,973
)
(1,846,973
)
(1,846,466
)
(1,846,973
)
(1,842,777
)
Average core deposit and other intangible
assets
(30,367
)
(32,135
)
(36,884
)
(32,127
)
(33,837
)
Net average tangible common equity
$
3,803,730
3,686,005
3,302,768
$
3,666,926
3,256,813
Return on average equity (1)
8.66
%
13.42
%
10.64
%
10.57
%
10.28
%
Adjustment due to average preferred
shareholders' equity
0.34
%
0.53
%
0.44
%
0.42
%
0.44
%
Return on average common equity (1)
9.00
%
13.95
%
11.08
%
10.99
%
10.72
%
Adjustment due to goodwill, core deposit
and other intangible assets
4.43
%
7.11
%
6.32
%
5.63
%
6.17
%
Return on average tangible common equity
(1)
13.43
%
21.06
%
17.40
%
16.62
%
16.89
%
Adjustments as noted above
0.77
%
(6.18
)%
(0.03
)%
(1.80
)%
—
%
Return on average tangible common equity
excluding adjustments noted above (1)
14.20
%
14.88
%
17.37
%
14.82
%
16.89
%
This information is preliminary and based
on company data available at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND
SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA –
UNAUDITED
1. Ratios are presented on an annualized
basis.
2. Net interest margin is the result of
net interest income on a tax equivalent basis divided by average
interest earning assets.
3. Total revenue is equal to the sum of
net interest income and noninterest income.
4. Efficiency ratios are calculated by
dividing noninterest expense by the sum of net interest income and
noninterest income.
5. Annualized net loan charge-offs to
average loans ratios are computed by annualizing quarter-to-date
net loan charge-offs and dividing the result by average loans for
the quarter-to-date period.
6. Capital ratios are calculated using
regulatory reporting regulations enacted for such period and are
defined as follows:
Equity to total assets – End of period
total shareholders' equity as a percentage of end of period
assets.
Tangible common equity to tangible assets
- End of period total shareholders' equity less end of period
preferred stock, goodwill, core deposit and other intangibles as a
percentage of end of period assets less end of period goodwill,
core deposit and other intangibles.
Leverage – Tier I capital (pursuant to
risk-based capital guidelines) as a percentage of adjusted average
assets.
Tier I risk-based – Tier I capital
(pursuant to risk-based capital guidelines) as a percentage of
total risk-weighted assets.
Total risk-based – Total capital (pursuant
to risk-based capital guidelines) as a percentage of total
risk-weighted assets.
Classified asset - Classified assets as a
percentage of Tier 1 capital plus allowance for credit losses.
Tier I common equity to risk weighted
assets - Tier 1 capital (pursuant to risk-based capital guidelines)
less the amount of any preferred stock or subordinated indebtedness
that is considered as a component of Tier 1 capital as a percentage
of total risk-weighted assets.
7. Book value per common share computed by
dividing total common shareholders' equity by common shares
outstanding. Tangible book value per common share computed by
dividing total common shareholders' equity, less goodwill, core
deposit and other intangibles by common shares outstanding.
8. Amounts are included in the statement
of income in "Gains on mortgage loans sold, net", net of
commissions paid on such amounts.
9. At fair value, based on information
obtained from Pinnacle's third party broker/dealer for non-FDIC
insured financial products and services.
10. Core deposits include all transaction
deposit accounts, money market and savings accounts and all
certificates of deposit issued in a denomination of less than
$250,000. The ratio noted above represents total core deposits
divided by total funding, which includes total deposits, FHLB
advances, securities sold under agreements to repurchase,
subordinated indebtedness and all other interest-bearing
liabilities.
11. Associate retention rate is computed
by dividing the number of associates employed at quarter end less
the number of associates that have resigned in the last 12 months
by the number of associates employed at quarter end.
12. Adjusted pre-tax, pre-provision net
revenue excludes the impact of ORE expenses and income, investment
gains and losses on sales of securities and gain on sale of fixed
assets as a result of the sale-leaseback transaction.
13. Represents investment gains (losses)
on sales and impairments, net occurring as a result of gains or
losses incurred as the result of a change in management's intention
to sell a bond prior to the recovery of its amortized cost
basis.
14. The dividend payout ratio is
calculated as the sum of the annualized dividend rate for dividends
paid on common shares divided by the trailing 12-months fully
diluted earnings per common share as of the dividend declaration
date.
15. Earnings from equity method investment
includes the impact of the funding costs of the overall franchise
calculated using the firm's subordinated and other borrowing rates.
Income tax expense is calculated using statutory tax rates.
16. Tax effect calculated using the
blended statutory rate of 25.00 percent for 2023. For periods prior
to 2023, tax effect calculated using the blended statutory rate of
26.14 percent.
17. Calculated using the same guidelines
as are used in the Federal Financial Institutions Examination
Council's Uniform Bank Performance Report.
pnfp-earnings
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231017840524/en/
MEDIA CONTACT: Joe Bass, 615-743-8219 FINANCIAL
CONTACT: Harold Carpenter, 615-744-3742 WEBSITE:
www.pnfp.com
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