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PNFP Reports 4Q23 Diluted EPS of $1.19, Diluted EPS of $1.68 Excluding FDIC Special Assessment and BOLI Restructuring Charges

Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.19 for the quarter ended Dec. 31, 2023, compared to net income per diluted common share of $1.76 for the quarter ended Dec. 31, 2022, a decrease of 32.4 percent. Net income per diluted common share was $7.14 for the year ended Dec. 31, 2023, compared to $7.17 for the year ended Dec. 31, 2022, a decrease of 0.4 percent.

After considering the adjustments noted in the table below for the three months ended Dec. 31, 2023 and 2022, net income per diluted common share was $1.68, compared to $1.76 for the three months ended Dec. 31, 2022. Net income per diluted common share adjusted for the items noted in the table below was $6.99 for the year ended Dec. 31, 2023, compared to $7.17 for the year ended Dec. 31, 2022.

 

Three Months Ended

 

Years Ended

 

December 31,

2023

September 30,

2023

December 31,

2022

 

December 31,

2023

December 31,

2022

Diluted earnings per common share

$

1.19

$

1.69

$

1.76

 

$

7.14

 

$

7.17

Net of tax adjustments (1):

 

 

 

 

 

 

Investment losses on sales of securities, net (3)

 

 

0.10

 

 

 

0.20

 

 

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

 

 

 

 

 

(0.84

)

 

Loss on BOLI restructuring (2)

 

0.21

 

 

 

0.21

 

 

ORE expense (3)

 

 

 

 

 

 

 

FDIC special assessment

 

0.28

 

 

 

0.28

 

 

Diluted earnings per common share after adjustments

$

1.68

$

1.79

$

1.76

 

$

6.99

 

$

7.17

 

(1): Adjustments include tax effect calculated using a blended statutory rate of 25.00 percent for 2023. 

(2): Loss on BOLI restructuring is not tax effected. 

(3): Impact of net investment gains in the fourth quarter of 2023 and ORE expense in all periods presented were minimal. 

 

During the fourth quarter of 2023, the firm restructured and surrendered approximately $740.0 million of bank owned life insurance contracts (BOLI) held by various insurance carriers. The restructuring is expected to increase the future yields of the underlying insurance contracts. Pursuant to the restructuring, the firm incurred approximately $7.2 million in restructuring charges and surrender penalties and $9.1 million in income taxes and penalties. The increased yield is expected to be fully phased in by mid-year 2024 and should result in an increase in non-taxable noninterest income of approximately $10.5 million in 2024.

Additionally, the firm accrued approximately $29.0 million for future payments to the FDIC pursuant to a special insurance assessment to recover losses incurred by the Deposit Insurance Fund associated with two bank failures which occurred in the spring of 2023. The firm expects to remit the amount in eight quarterly installments beginning in June of 2024. The FDIC has announced that the special assessment amount and payment periods could change if actual losses to the Deposit Insurance Fund from these failures are different from estimated losses.

"There is no doubt that 2023 presented a very difficult operating environment for banks," said M. Terry Turner, Pinnacle's president and chief executive officer. "But 2023 was actually a great year for our firm resulting in year-over-year tangible book value growth of 14.8 percent and a total shareholder return of 20 percent. The challenging environment allowed us to showcase two critical drivers of our unique ability to create long-term shareholder value. First, our extraordinary ability to attract experienced bankers from the larger regional and national competitors, coupled with a differentiated service model, enabled us to reliably take market share and grow our balance sheet volumes even when market conditions would have otherwise limited growth opportunities. Second, our risk management systems, though generally unseen by most investors, provide critical discipline that contributed to very strong growth in a year when many of our peers failed to grow. These two drivers, in particular, enabled us to stay on course as opposed to deploying an extensive cost reduction plan which risks both revenue generation momentum as well as the cultural foundation of the firm.

"With that in mind, we successfully recruited several experienced bankers in Jacksonville, Florida during the fourth quarter of 2023 building on the success we are experiencing in other market extensions like Atlanta and Washington, D.C. These bankers will provide the core leadership for what we believe will be a strong franchise in one of Florida’s finest banking markets. Due to the relative strength of our southeastern markets and the competitive advantage we possess over the large regional and national competitors, I remain excited about the ongoing opportunities that exist for our firm as we enter 2024."

BALANCE SHEET GROWTH AND LIQUIDITY:

Total assets at Dec. 31, 2023 were $48.0 billion, an increase of approximately $6.0 billion from Dec. 31, 2022 and $436.1 million from Sept. 30, 2023, reflecting a year-over-year increase of 14.3 percent and a linked-quarter annualized increase of 3.7 percent. A further analysis of select balance sheet trends follows:

 

Balances at

Linked-Quarter

Annualized

% Change

Balances at

Year-over-Year

% Change

(dollars in thousands)

Dec. 31, 2023

Sept. 30, 2023

Dec. 31, 2022

Loans

$

32,676,091

$

31,943,284

9.2%

$

29,041,605

12.5%

Securities

 

7,323,887

 

6,882,276

25.7%

 

6,637,920

10.3%

Other interest-earning assets

 

2,673,235

 

3,512,452

(95.6)%

 

1,485,339

80.0%

Total interest-earning assets

$

42,673,213

$

42,338,012

3.2%

$

37,164,864

14.8%

 

 

 

 

 

 

Core deposits:

 

 

 

 

 

Noninterest-bearing deposits

$

7,906,502

$

8,324,325

(20.1)%

$

9,812,744

(19.4)%

Interest-bearing core deposits(1)

 

25,832,415

 

25,282,458

8.7%

 

21,488,333

20.2%

Noncore deposits and other funding(2)

 

7,573,489

 

7,420,341

8.3%

 

4,743,562

59.7%

Total funding

$

41,312,406

$

41,027,124

2.8%

$

36,044,639

14.6%

(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 63 percent of fourth quarter 2023 loan growth was related to commercial and industrial and owner-occupied commercial real estate categories, two segments the firm intends to continue emphasizing for the foreseeable future.
  • On-balance sheet liquidity, defined as cash and cash equivalents plus unpledged securities, remained strong, totaling $6.9 billion as of Dec. 31, 2023, representing a $448 million decrease from the on-balance sheet liquidity level of $7.4 billion as of Sept. 30, 2023.
  • Available-for-sale investment securities increased by $454 million during the fourth quarter of 2023 which is primarily due to a $301 million increase in the fair value of the underlying securities.

"We grew loans 12.5 percent, core deposits 7.8 percent, and we hired 107 new revenue producers, showcasing our ability to reliably and responsibly grow during 2023," Turner said. "With no further decline in the net interest margin in the fourth quarter, it appears we may be at or near the bottom for net interest margin. Consequently, the combination of our balance sheet growth and our ongoing pricing emphasis should enable us to reliably grow net interest income in 2024."

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

Pre-tax, pre-provision net revenues (PPNR) for the three months and year ended Dec. 31, 2023 were $145.2 million and $807.6 million, respectively, a decrease of 27.3 percent and an increase of 5.5 percent, respectively from the three months and year ended Dec. 31, 2022.

 

Three months ended

Years ended

 

December 31,

December 31,

(dollars in thousands)

2023

2022

% change

2023

2022

% change

Revenues:

 

 

 

 

 

 

Net interest income

$

317,252

 

$

319,460

(0.7

)%

$

1,262,118

 

$

1,129,293

 

11.8

%

Noninterest income

 

79,088

 

 

82,321

(3.9

)%

 

433,253

 

 

416,124

 

4.1

%

Total revenues

 

396,340

 

 

401,781

(1.4

)%

 

1,695,371

 

 

1,545,417

 

9.7

%

Noninterest expense

 

251,168

 

 

202,047

24.3

%

 

887,769

 

 

779,999

 

13.8

%

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

 

145,172

 

 

199,734

(27.3

)%

 

807,602

 

 

765,418

 

5.5

%

Adjustments:

 

 

 

 

 

 

Investment losses (gains) on sales of securities, net

 

(14

)

 

NM

 

 

19,674

 

 

(156

)

NM

 

Gain on the sale of fixed assets as a result of sale leaseback

 

 

 

NM

 

 

(85,692

)

 

 

NM

 

Loss on BOLI restructuring

 

7,166

 

 

NM

 

 

7,166

 

 

 

NM

 

ORE expense (benefit)

 

125

 

 

179

(30.2

)%

 

315

 

 

280

 

12.5

%

FDIC special assessment

 

29,000

 

 

NM

 

 

29,000

 

 

 

NM

 

Adjusted PPNR

$

181,449

 

$

199,913

(9.2

)%

$

778,065

 

$

765,542

 

1.6

%

  • Revenue per fully diluted common share was $5.16 for the fourth quarter of 2023, compared to $5.35 for the third quarter of 2023 and $5.27 for the fourth quarter of 2022, a decline of 2.1 percent year-over-year. Excluding investment gains on sales of securities and the loss on the BOLI restructuring, revenue per fully diluted share for the fourth quarter of 2023 was $5.25 compared to $5.27 for the fourth quarter of 2022.
  • Net interest income for the quarter ended Dec. 31, 2023 was $317.3 million, compared to $317.2 million for the third quarter of 2023 and $319.5 million for the fourth quarter of 2022, a year-over-year decline of 0.7 percent.
  • Noninterest income for the quarter ended Dec. 31, 2023 was $79.1 million, compared to $90.8 million for the third quarter of 2023 and $82.3 million for the fourth quarter of 2022, a year-over-year decrease of 3.9 percent. Noninterest income results for the fourth quarter of 2023 were negatively impacted by the BOLI restructuring charges of $7.2 million noted above. Excluding the BOLI restructuring charges, year-over-year noninterest income would have increased by 4.8 percent between the fourth quarter of 2023 and the fourth quarter of 2022.
    • Wealth management revenues, which include investment, trust and insurance services, were $23.5 million for the fourth quarter of 2023, compared to $22.8 million for the third quarter of 2023 and $20.2 million for the fourth quarter of 2022, a year-over-year increase of 16.2 percent.
    • Gain on the sale of fixed assets was $102,000 for the quarter ended Dec. 31, 2023, compared to $87,000 and $32,000, respectively, for the quarters ended Sept. 30, 2023 and Dec. 31, 2022. Gain on the sale of fixed assets was $86.0 million for the year ended Dec. 31, 2023, compared to $457,000 for the year ended Dec. 31, 2022. The year ended Dec. 31, 2023 included a gain on the sale of fixed assets as a result of the previously announced sale-leaseback transaction completed in the second quarter of 2023 of $85.7 million.
    • Net gains on the sale of investment securities were $14,000 for the quarter ended Dec. 31, 2023, compared to $9.7 million in net losses for the quarter ended Sept. 30, 2023. There were no net gains or losses on the sale of investment securities for the quarter ended Dec. 31, 2022.
    • Income from the firm's investment in BHG was $14.4 million for the fourth quarter 2023, compared to $25.0 million for the third quarter of 2023 and $21.0 million for the fourth quarter of 2022, a year-over-year decline of 31.3 percent. The firm estimated that BHG's overall impact to Pinnacle's earnings per diluted common share for the year ended Dec. 31, 2023 amounted to $0.61, down from $1.27 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 17.7 percent of Pinnacle's 2022 total diluted earnings per common share to 8.5 percent of Pinnacle's 2023 total diluted earnings per common share.
      • BHG's loan originations decreased to $786 million in the fourth quarter 2023 compared to $1.0 billion in the third quarter of 2023 and $1.1 billion in the fourth quarter of 2022.
      • Loans sold to BHG's community bank partners were approximately $446 million in the fourth quarter 2023 compared to approximately $435 million in the third quarter of 2023 and $600 million in the fourth quarter of 2022. BHG also sold $50 million in loans to private investors and closed an asset backed security facility with $300 million in loans during the fourth quarter of 2023 compared to $564 million in the third quarter of 2023 and $504 million in the fourth quarter of 2022.
      • BHG increased its reserves for on-balance sheet loan losses to $302.6 million, or 9.33 percent of loans held for investment at Dec. 31, 2023, compared to 6.44 percent at Sept. 30, 2023. The increase reflects BHG's adoption for lifetime credit losses associated with its implementation of the current expected credit loss (CECL) methodology on Oct. 1, 2023.
        • The negative impact of the CECL adoption to Pinnacle's equity as of Oct. 1, 2023 was $35.0 million net of tax.
      • BHG also decreased its accrual for losses attributable to loan substitutions and prepayments for loans previously sold through its community bank auction platform to $356.6 million, or 5.39 percent of the loans that have been previously sold and were unpaid, at Dec. 31, 2023 compared to 5.46 percent at Sept. 30, 2023.
  • Noninterest expense for the quarter ended Dec. 31, 2023 was $251.2 million, compared to $213.2 million in the third quarter of 2023 and $202.0 million in the fourth quarter of 2022, reflecting a year-over-year increase of 24.3 percent. Noninterest expense results for the fourth quarter of 2023 were negatively impacted by the $29.0 million FDIC special assessment. Excluding the FDIC special assessment, year-over-year noninterest expenses would have increased by 10.0 percent between the fourth quarter of 2023 and the fourth quarter of 2022.
    • Salaries and employee benefits were $133.3 million in the fourth quarter of 2023, compared to $130.3 million in the third quarter of 2023 and $131.8 million in the fourth quarter of 2022, reflecting a year-over-year increase of 1.2 percent. The increase in salaries and employee benefits expense, on a linked-quarter basis, of approximately $3.0 million was due to the increase in the costs related to increased headcount and additional expense for the firm's annual cash and equity incentive plans. Full-time equivalent associates increased to 3,357.0 at Dec. 31, 2023 from 3,241.5 at Dec. 31, 2022, a year-over-year increase of 3.6 percent.
    • Equipment and occupancy costs were $38.0 million in the fourth quarter of 2023, compared to $36.9 million in the third quarter of 2023 and $29.3 million in the fourth quarter of 2022, reflecting a year-over-year increase of 29.6 percent. Contributing to the year-over-year increase is the impact of increased rent expense from the sale leaseback transaction completed in the second quarter of 2023.
    • Noninterest expense categories, other than those specifically noted above, were $50.8 million in the fourth quarter of 2023, compared to $46.0 million in the third quarter of 2023 and $40.9 million in the fourth quarter of 2022, reflecting a year-over-year increase of 24.2 percent.

"Continued increases in short-term rates, quantitative tightening and an inverted yield curve made for a difficult operating environment in 2023," said Harold R. Carpenter, Pinnacle's chief financial officer. "As we enter 2024, we find ourselves much more optimistic about the macro environment, particularly around the prospects of a 'soft landing', lower levels of inflation and the anticipated direction of interest rates. Even though many issues remain, including a stubborn inverted yield curve, we believe we will have the opportunity to manage our balance sheet to produce stronger earnings in 2024 than in 2023.

"As anticipated, BHG's results for the fourth quarter of 2023 declined from those in the third quarter. Income related to BHG was down 41 percent in 2023 compared to 2022. During the fourth quarter of 2023, BHG implemented several initiatives aimed at increasing earnings in future periods, including eliminating several business lines with reduction of corresponding personnel costs. As a result, BHG’s total operating expense decreased between the fourth and third quarters of 2023 by 16 percent. Charges related to these matters in the fourth quarter of 2023 were $4.0 million compared to charges in the third quarter of 2023 of $10 million.

"Pinnacle's incentive expenses did increase slightly in the fourth quarter from the amounts in the third quarter as we finalized our performance incentive calculations for 2023. Our performance in 2023 resulted in an award under our annual cash incentive plan to participants of approximately 62 percent of each participants’ target award. The payout was below target because the firm's revenue and EPS were less than originally targeted. Our annual cash bonus plan award amounted to approximately $46.3 million for 2023 which reflects a savings in 2023 of approximately $30.0 million compared to what the firm would have incurred had we paid participants at target."

SOUNDNESS AND PROFITABILITY:

 

Three months ended

 

Year ended

 

December 31,

2023

September 30,

2023

December 31,

2022

 

December 31,

2023

December 31,

2022

Net interest margin

3.06

%

3.06

%

3.60

%

 

3.18

%

3.29

%

Efficiency ratio

63.37

%

52.26

%

50.29

%

 

52.36

%

50.47

%

Return on average assets

0.76

%

1.08

%

1.29

%

 

1.19

%

1.37

%

Return on average tangible common equity (TCE)

9.53

%

13.43

%

15.95

%

 

14.78

%

16.65

%

 

As of

 

December 31,

2023

September 30,

2023

December 31,

2022

Shareholders' equity to total assets

 

12.6

%

 

12.3

%

 

13.2

%

Average loan to deposit ratio

 

84.05

%

 

82.80

%

 

83.10

%

Uninsured/uncollateralized deposits to total deposits

 

31.32

%

 

28.89

%

 

39.21

%

Tangible common equity to tangible assets

 

8.6

%

 

8.2

%

 

8.5

%

Book value per common share

$

75.80

 

$

73.23

 

$

69.35

 

Tangible book value per common share

$

51.38

 

$

48.78

 

$

44.74

 

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

 

0.17

%

 

0.23

%

 

0.17

%

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

 

0.27

%

 

0.14

%

 

0.16

%

Classified asset ratio (Pinnacle Bank) (2)

 

5.20

%

 

4.60

%

 

2.40

%

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 fourth quarter of 2023, compared to 3.06 percent for the third quarter of 2023 and 3.60 percent for the fourth quarter of 2022. Net interest margin decreased to 3.18 percent for the year ended Dec. 31, 2023, compared to 3.29 percent for the year ended Dec. 31, 2022.
  • Provision for credit losses was $16.3 million in the fourth quarter of 2023, compared to $26.8 million in the third quarter of 2023 and $24.8 million in the fourth quarter of 2022. Net charge-offs were $13.5 million for the quarter ended Dec. 31, 2023, compared to $18.1 million for the quarter ended Sept. 30, 2023 and $11.7 million for the quarter ended Dec. 31, 2022. Annualized net charge-offs for the fourth quarter of 2023 were 0.17 percent.
  • The effective tax rate for the fourth quarter of 2023 was 26.3 percent inclusive of BOLI restructuring taxes and penalties of $9.1 million.
  • Nonperforming assets were $86.6 million at Dec. 31, 2023, compared to $46.0 million at Sept. 30, 2023 and $46.1 million at Dec. 31, 2022. The ratio of the allowance for credit losses to nonperforming loans at Dec. 31, 2023 was 429.0 percent, compared to 806.0 percent at Sept. 30, 2023 and 788.8 percent at Dec. 31, 2022.
    • Although at Dec. 31, 2023, the ratio of nonperforming assets to total loans and ORE was near historically low levels at 0.27 percent, the ratio did increase during the fourth quarter due primarily to the downgrade of a $40.2 million loan to a company headquartered in Middle Tennessee which owns facilities that are leased to healthcare operators around the country. The firm believes that this borrower is addressing the weaknesses identified in a prudent manner and believes no further action on this loan is required at this time.
  • Classified assets were $251.3 million at Dec. 31, 2023, compared to $218.9 million at Sept. 30, 2023 and $104.2 at Dec. 31, 2022.

"We are obviously pleased that our net interest margin held at 3.06 percent during the fourth quarter of 2023 and was essentially flat with the third quarter," Carpenter said. "Another positive for the quarter was the increase in tangible book value per common share, which was $51.38 at Dec. 31, 2023, an increase of 14.8 percent over the $44.74 at Dec. 31, 2022. As you know, increasing our tangible book value per common share remains an important priority for our firm’s leadership.

"Lastly, net charge-offs to average loans for the fourth quarter of 2023 decreased during the quarter to 0.17 percent from 0.23 percent in the prior quarter. Our credit officers continue to work our loan portfolio looking for weaknesses and engaging borrowers where circumstances warrant. We are pleased with the performance of our loan portfolio thus far with our credit metrics continuing to reflect a loan portfolio that has performed well thus far through the challenging operating environment we have experienced."

BOARD OF DIRECTORS DECLARES DIVIDENDS

On Jan. 16, 2024, Pinnacle Financial's Board of Directors approved a quarterly cash dividend of $0.22 per common share to be paid on Feb. 23, 2024 to common shareholders of record as of the close of business on Feb. 2, 2024. Additionally, the Board of Directors approved a quarterly cash dividend of approximately $3.8 million, or $16.88 per share (or $0.422 per depositary share), on Pinnacle Financial's 6.75 percent Series B Non-Cumulative Perpetual Preferred Stock payable on Mar. 1, 2024 to shareholders of record at the close of business on Feb. 15, 2024. The amount and timing of any future dividend payments to both preferred and common shareholders will be subject to the approval of Pinnacle's Board of Directors.

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. CST on Jan. 17, 2024, to discuss fourth 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 and fastest growing bank in the Nashville-Murfreesboro-Franklin MSA according to 2023 deposit data from the FDIC, and is listed by Forbes as No. 27 among Americas Best Banks, higher than any other bank headquartered in Tennessee, North Carolina, South Carolina and Georgia. Pinnacle also earned a spot on the 2023 list of 100 Best Companies to Work For® in the U.S., its seventh 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 owns a 49 percent interest in BHG Financial, which provides innovative, hassle-free financial solutions to healthcare practitioners and other professionals. Great Place to Work and FORTUNE have listed BHG as a best workplace in multiple categories since 2016.

The firm began operations in a single location in downtown Nashville, TN in October 2000 and has since grown to approximately $48.0 billion in assets as of Dec. 31, 2023. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 17 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; (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 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, 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, losses on the restructuring of certain BOLI contracts, a charge related to the FDIC special assessment 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)

December 31,

2023

September 30,

2023

December 31,

2022

ASSETS

 

 

 

Cash and noninterest-bearing due from banks

$

228,620

 

$

279,652

 

$

268,649

 

Restricted cash

 

86,873

 

 

17,356

 

 

31,447

 

Interest-bearing due from banks

 

1,914,856

 

 

2,855,094

 

 

877,286

 

Cash and cash equivalents

 

2,230,349

 

 

3,152,102

 

 

1,177,382

 

Securities purchased with agreement to resell

 

558,009

 

 

500,000

 

 

513,276

 

Securities available-for-sale, at fair value

 

4,317,530

 

 

3,863,697

 

 

3,558,870

 

Securities held-to-maturity (fair value of $2.8 billion, $2.6 billion and $2.7 billion, net of allowance for credit losses of $1.7 million, $1.7 million and $1.6 million at Dec. 31, 2023, Sept. 30, 2023 and Dec. 31, 2022, respectively)

 

3,006,357

 

 

3,018,579

 

 

3,079,050

 

Consumer loans held-for-sale

 

104,217

 

 

119,489

 

 

42,237

 

Commercial loans held-for-sale

 

9,280

 

 

20,513

 

 

21,093

 

Loans

 

32,676,091

 

 

31,943,284

 

 

29,041,605

 

Less allowance for credit losses

 

(353,055

)

 

(346,192

)

 

(300,665

)

Loans, net

 

32,323,036

 

 

31,597,092

 

 

28,740,940

 

Premises and equipment, net

 

256,877

 

 

252,669

 

 

327,885

 

Equity method investment

 

445,223

 

 

480,996

 

 

443,185

 

Accrued interest receivable

 

217,491

 

 

177,390

 

 

161,182

 

Goodwill

 

1,846,973

 

 

1,846,973

 

 

1,846,973

 

Core deposits and other intangible assets

 

27,465

 

 

29,216

 

 

34,555

 

Other real estate owned

 

3,937

 

 

2,555

 

 

7,952

 

Other assets

 

2,613,139

 

 

2,462,519

 

 

2,015,441

 

Total assets

$

47,959,883

 

$

47,523,790

 

$

41,970,021

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Deposits:

 

 

 

Noninterest-bearing

$

7,906,502

 

$

8,324,325

 

$

9,812,744

 

Interest-bearing

 

11,365,349

 

 

10,852,086

 

 

7,884,605

 

Savings and money market accounts

 

14,427,206

 

 

14,306,359

 

 

13,774,534

 

Time

 

4,840,753

 

 

4,813,039

 

 

3,489,355

 

Total deposits

 

38,539,810

 

 

38,295,809

 

 

34,961,238

 

Securities sold under agreements to repurchase

 

209,489

 

 

195,999

 

 

194,910

 

Federal Home Loan Bank advances

 

2,138,169

 

 

2,110,598

 

 

464,436

 

Subordinated debt and other borrowings

 

424,938

 

 

424,718

 

 

424,055

 

Accrued interest payable

 

66,967

 

 

67,442

 

 

19,478

 

Other liabilities

 

544,722

 

 

591,583

 

 

386,512

 

Total liabilities

 

41,924,095

 

 

41,686,149

 

 

36,450,629

 

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 Dec. 31, 2023, Sept. 30, 2023 and Dec. 31, 2022, respectively

 

217,126

 

 

217,126

 

 

217,126

 

Common stock, par value $1.00; 180.0 million shares authorized; 76.8 million, 76.8 million and 76.5 million shares issued and outstanding at Dec. 31, 2023, Sept. 30, 2023 and Dec. 31, 2022, respectively

 

76,767

 

 

76,753

 

 

76,454

 

Additional paid-in capital

 

3,109,493

 

 

3,097,702

 

 

3,074,867

 

Retained earnings

 

2,784,927

 

 

2,745,934

 

 

2,341,706

 

Accumulated other comprehensive loss, net of taxes

 

(152,525

)

 

(299,874

)

 

(190,761

)

Total shareholders' equity

 

6,035,788

 

 

5,837,641

 

 

5,519,392

 

Total liabilities and shareholders' equity

$

47,959,883

 

$

47,523,790

 

$

41,970,021

 

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

Year ended

 

December 31,

2023

September 30,

2023

December 31,

2022

December 31,

2023

December 31,

2022

Interest income:

 

 

 

 

 

Loans, including fees

$

530,604

 

$

508,963

 

$

387,328

 

$

1,950,365

 

$

1,182,492

 

Securities

 

 

 

 

 

Taxable

 

42,458

 

 

36,525

 

 

25,086

 

 

140,308

 

 

67,063

 

Tax-exempt

 

25,035

 

 

24,185

 

 

22,770

 

 

97,625

 

 

81,522

 

Federal funds sold and other

 

46,699

 

 

57,621

 

 

15,994

 

 

165,070

 

 

42,858

 

Total interest income

 

644,796

 

 

627,294

 

 

451,178

 

 

2,353,368

 

 

1,373,935

 

Interest expense:

 

 

 

 

 

Deposits

 

297,556

 

 

280,305

 

 

120,499

 

 

983,118

 

 

204,119

 

Securities sold under agreements to repurchase

 

1,295

 

 

1,071

 

 

474

 

 

3,744

 

 

794

 

FHLB advances and other borrowings

 

28,693

 

 

28,676

 

 

10,745

 

 

104,388

 

 

39,729

 

Total interest expense

 

327,544

 

 

310,052

 

 

131,718

 

 

1,091,250

 

 

244,642

 

Net interest income

 

317,252

 

 

317,242

 

 

319,460

 

 

1,262,118

 

 

1,129,293

 

Provision for credit losses

 

16,314

 

 

26,826

 

 

24,805

 

 

93,596

 

 

67,925

 

Net interest income after provision for credit losses

 

300,938

 

 

290,416

 

 

294,655

 

 

1,168,522

 

 

1,061,368

 

Noninterest income:

 

 

 

 

 

Service charges on deposit accounts

 

12,660

 

 

12,665

 

 

11,123

 

 

49,223

 

 

44,675

 

Investment services

 

13,410

 

 

13,253

 

 

11,765

 

 

52,432

 

 

46,441

 

Insurance sales commissions

 

3,072

 

 

2,882

 

 

2,668

 

 

13,670

 

 

12,186

 

Gains (losses) on mortgage loans sold, net

 

879

 

 

2,012

 

 

(65

)

 

6,511

 

 

7,268

 

Investment gains (losses) on sales, net

 

14

 

 

(9,727

)

 

 

 

(19,674

)

 

156

 

Trust fees

 

6,987

 

 

6,640

 

 

5,767

 

 

26,683

 

 

23,511

 

Income from equity method investment

 

14,432

 

 

24,967

 

 

21,005

 

 

85,402

 

 

145,466

 

Gain on sale of fixed assets

 

102

 

 

87

 

 

32

 

 

86,048

 

 

457

 

Other noninterest income

 

27,532

 

 

38,018

 

 

30,026

 

 

132,958

 

 

135,964

 

Total noninterest income

 

79,088

 

 

90,797

 

 

82,321

 

 

433,253

 

 

416,124

 

Noninterest expense:

 

 

 

 

 

Salaries and employee benefits

 

133,333

 

 

130,344

 

 

131,802

 

 

531,828

 

 

510,175

 

Equipment and occupancy

 

38,021

 

 

36,900

 

 

29,329

 

 

138,980

 

 

109,672

 

Other real estate, net

 

125

 

 

33

 

 

179

 

 

315

 

 

280

 

Marketing and other business development

 

6,829

 

 

5,479

 

 

7,579

 

 

23,914

 

 

21,073

 

Postage and supplies

 

2,840

 

 

2,621

 

 

2,682

 

 

11,143

 

 

10,168

 

Amortization of intangibles

 

1,751

 

 

1,765

 

 

1,937

 

 

7,090

 

 

7,810

 

Other noninterest expense

 

68,269

 

 

36,091

 

 

28,539

 

 

174,499

 

 

120,821

 

Total noninterest expense

 

251,168

 

 

213,233

 

 

202,047

 

 

887,769

 

 

779,999

 

Income before income taxes

 

128,858

 

 

167,980

 

 

174,929

 

 

714,006

 

 

697,493

 

Income tax expense

 

33,879

 

 

35,377

 

 

37,082

 

 

151,854

 

 

136,751

 

Net income

 

94,979

 

 

132,603

 

 

137,847

 

 

562,152

 

 

560,742

 

Preferred stock dividends

 

(3,798

)

 

(3,798

)

 

(3,798

)

 

(15,192

)

 

(15,192

)

Net income available to common shareholders

$

91,181

 

$

128,805

 

$

134,049

 

$

546,960

 

$

545,550

 

Per share information:

 

 

 

 

 

Basic net income per common share

$

1.20

 

$

1.69

 

$

1.77

 

$

7.20

 

$

7.20

 

Diluted net income per common share

$

1.19

 

$

1.69

 

$

1.76

 

$

7.14

 

$

7.17

 

Weighted average common shares outstanding:

 

 

 

 

 

Basic

 

76,068,016

 

 

76,044,182

 

 

75,771,828

 

 

76,016,370

 

 

75,735,404

 

Diluted

 

76,823,991

 

 

76,201,916

 

 

76,198,411

 

 

76,647,543

 

 

76,133,865

 

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

 

16

 

 

16

 

 

312

 

 

 

 

 

 

328

 

Preferred dividends paid ($67.52 per share)

 

 

 

 

 

 

 

(15,192

)

 

 

 

(15,192

)

Common dividends paid ($0.88 per share)

 

 

 

 

 

 

 

(68,194

)

 

 

 

(68,194

)

Issuance of restricted common shares, net of forfeitures

 

203

 

 

203

 

 

(203

)

 

 

 

 

 

 

Restricted shares withheld for taxes & related tax benefits

 

(51

)

 

(51

)

 

(4,991

)

 

 

 

 

 

(5,042

)

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

 

143

 

 

143

 

 

(5,605

)

 

 

 

 

 

(5,462

)

Compensation expense for restricted shares & performance stock units

 

 

 

 

 

39,552

 

 

 

 

 

 

39,552

 

Net income

 

 

 

 

 

 

 

560,742

 

 

 

 

560,742

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

(297,947

)

 

(297,947

)

Balance at December 31, 2022

$

217,126

76,454

 

$

76,454

 

$

3,074,867

 

$

2,341,706

 

$

(190,761

)

$

5,519,392

 

 

 

 

 

 

 

 

 

Balance at December 31, 2022

$

217,126

76,454

 

$

76,454

 

$

3,074,867

 

$

2,341,706

 

$

(190,761

)

$

5,519,392

 

Cumulative change due to accounting pronouncement

 

 

 

 

 

 

 

(35,002

)

 

 

 

(35,002

)

Exercise of employee common stock options & related tax benefits

 

40

 

 

40

 

 

931

 

 

 

 

 

 

971

 

Preferred dividends paid ($67.52 per share)

 

 

 

 

 

 

 

(15,192

)

 

 

 

(15,192

)

Common dividends paid ($0.88 per share)

 

 

 

 

 

 

 

(68,737

)

 

 

 

(68,737

)

Issuance of restricted common shares, net of forfeitures

 

235

 

 

235

 

 

(235

)

 

 

 

 

 

 

Restricted shares withheld for taxes & related tax benefits

 

(59

)

 

(59

)

 

(4,127

)

 

 

 

 

 

(4,186

)

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

 

97

 

 

97

 

 

(3,822

)

 

 

 

 

 

(3,725

)

Compensation expense for restricted shares & performance stock units

 

 

 

 

 

41,879

 

 

 

 

 

 

41,879

 

Net income

 

 

 

 

 

 

 

562,152

 

 

 

 

562,152

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

38,236

 

 

38,236

 

Balance at December 31, 2023

$

217,126

76,767

 

$

76,767

 

$

3,109,493

 

$

2,784,927

 

$

(152,525

)

$

6,035,788

 

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

 

 

 

 

 

 

(dollars in thousands)

December

September

June

March

December

September

2023

2023

2023

2023

2022

2022

Balance sheet data, at quarter end:

 

 

 

 

 

 

Commercial and industrial loans

$

11,666,691

 

11,307,611

 

10,983,911

 

10,723,327

 

10,241,362

 

9,748,994

 

Commercial real estate - owner occupied loans

 

4,044,896

 

3,944,616

 

3,845,359

 

3,686,796

 

3,587,257

 

3,426,271

 

Commercial real estate - investment loans

 

5,929,595

 

5,957,426

 

5,682,652

 

5,556,484

 

5,277,454

 

5,122,127

 

Commercial real estate - multifamily and other loans

 

1,605,899

 

1,490,184

 

1,488,236

 

1,331,249

 

1,265,165

 

1,042,854

 

Consumer real estate - mortgage loans

 

4,851,531

 

4,768,780

 

4,692,673

 

4,531,285

 

4,435,046

 

4,271,913

 

Construction and land development loans

 

4,041,081

 

3,942,143

 

3,904,774

 

3,909,024

 

3,679,498

 

3,548,970

 

Consumer and other loans

 

536,398

 

532,524

 

555,685

 

559,706

 

555,823

 

550,565

 

Total loans

 

32,676,091

 

31,943,284

 

31,153,290

 

30,297,871

 

29,041,605

 

27,711,694

 

Allowance for credit losses

 

(353,055

)

(346,192

)

(337,459

)

(313,841

)

(300,665

)

(288,088

)

Securities

 

7,323,887

 

6,882,276

 

6,623,457

 

6,878,831

 

6,637,920

 

6,481,018

 

Total assets

 

47,959,883

 

47,523,790

 

46,875,982

 

45,119,587

 

41,970,021

 

41,000,118

 

Noninterest-bearing deposits

 

7,906,502

 

8,324,325

 

8,436,799

 

9,018,439

 

9,812,744

 

10,567,873

 

Total deposits

 

38,539,810

 

38,295,809

 

37,722,661

 

36,178,553

 

34,961,238

 

33,690,049

 

Securities sold under agreements to repurchase

 

209,489

 

195,999

 

163,774

 

149,777

 

194,910

 

190,554

 

FHLB advances

 

2,138,169

 

2,110,598

 

2,200,917

 

2,166,508

 

464,436

 

889,248

 

Subordinated debt and other borrowings

 

424,938

 

424,718

 

424,497

 

424,276

 

424,055

 

423,834

 

Total shareholders' equity

 

6,035,788

 

5,837,641

 

5,843,759

 

5,684,128

 

5,519,392

 

5,342,112

 

Balance sheet data, quarterly averages:

 

 

 

 

 

 

Total loans

$

32,371,506

 

31,529,854

 

30,882,205

 

29,633,640

 

28,402,197

 

27,021,031

 

Securities

 

6,967,488

 

6,801,285

 

6,722,247

 

6,765,126

 

6,537,262

 

6,542,026

 

Federal funds sold and other

 

3,615,908

 

4,292,956

 

3,350,705

 

2,100,757

 

1,828,588

 

2,600,978

 

Total earning assets

 

42,954,902

 

42,624,095

 

40,955,157

 

38,499,523

 

36,768,047

 

36,164,035

 

Total assets

 

47,668,519

 

47,266,199

 

45,411,961

 

42,983,854

 

41,324,251

 

40,464,649

 

Noninterest-bearing deposits

 

8,342,572

 

8,515,733

 

8,599,781

 

9,332,317

 

10,486,233

 

10,926,069

 

Total deposits

 

38,515,560

 

38,078,665

 

36,355,859

 

35,291,775

 

34,177,281

 

33,108,415

 

Securities sold under agreements to repurchase

 

202,601

 

184,681

 

162,429

 

219,082

 

199,610

 

215,646

 

FHLB advances

 

2,112,809

 

2,132,638

 

2,352,045

 

1,130,356

 

701,813

 

1,010,865

 

Subordinated debt and other borrowings

 

426,999

 

426,855

 

426,712

 

426,564

 

427,503

 

426,267

 

Total shareholders' equity

 

5,889,075

 

5,898,196

 

5,782,239

 

5,605,604

 

5,433,274

 

5,403,244

 

Statement of operations data, for the three months ended:

Interest income

$

644,796

 

627,294

 

575,239

 

506,039

 

451,178

 

371,764

 

Interest expense

 

327,544

 

310,052

 

259,846

 

193,808

 

131,718

 

65,980

 

Net interest income

 

317,252

 

317,242

 

315,393

 

312,231

 

319,460

 

305,784

 

Provision for credit losses

 

16,314

 

26,826

 

31,689

 

18,767

 

24,805

 

27,493

 

Net interest income after provision for credit losses

 

300,938

 

290,416

 

283,704

 

293,464

 

294,655

 

278,291

 

Noninterest income

 

79,088

 

90,797

 

173,839

 

89,529

 

82,321

 

104,805

 

Noninterest expense

 

251,168

 

213,233

 

211,641

 

211,727

 

202,047

 

199,253

 

Income before income taxes

 

128,858

 

167,980

 

245,902

 

171,266

 

174,929

 

183,843

 

Income tax expense

 

33,879

 

35,377

 

48,603

 

33,995

 

37,082

 

35,185

 

Net income

 

94,979

 

132,603

 

197,299

 

137,271

 

137,847

 

148,658

 

Preferred stock dividends

 

(3,798

)

(3,798

)

(3,798

)

(3,798

)

(3,798

)

(3,798

)

Net income available to common shareholders

$

91,181

 

128,805

 

193,501

 

133,473

 

134,049

 

144,860

 

Profitability and other ratios:

 

 

 

 

 

 

Return on avg. assets (1)

 

0.76

%

1.08

%

1.71

%

1.26

%

1.29

%

1.42

%

Return on avg. equity (1)

 

6.14

%

8.66

%

13.42

%

9.66

%

9.79

%

10.64

%

Return on avg. common equity (1)

 

6.38

%

9.00

%

13.95

%

10.05

%

10.20

%

11.08

%

Return on avg. tangible common equity (1)

 

9.53

%

13.43

%

21.06

%

15.43

%

15.95

%

17.40

%

Common stock dividend payout ratio (14)

 

12.26

%

11.35

%

11.04

%

12.07

%

12.26

%

12.34

%

Net interest margin (2)

 

3.06

%

3.06

%

3.20

%

3.40

%

3.60

%

3.47

%

Noninterest income to total revenue (3)

 

19.95

%

22.25

%

35.53

%

22.28

%

20.49

%

25.53

%

Noninterest income to avg. assets (1)

 

0.66

%

0.76

%

1.54

%

0.84

%

0.79

%

1.03

%

Noninterest exp. to avg. assets (1)

 

2.09

%

1.79

%

1.87

%

2.00

%

1.94

%

1.95

%

Efficiency ratio (4)

 

63.37

%

52.26

%

43.26

%

52.70

%

50.29

%

48.53

%

Avg. loans to avg. deposits

 

84.05

%

82.80

%

84.94

%

83.97

%

83.10

%

81.61

%

Securities to total assets

 

15.27

%

14.48

%

14.13

%

15.25

%

15.82

%

15.81

%

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

December 31, 2023

 

December 31, 2022

 

Average

Balances

Interest

Rates/

Yields

 

Average

Balances

Interest

Rates/

Yields

Interest-earning assets

 

 

 

 

 

 

 

Loans (1) (2)

$

32,371,506

$

530,604

6.62

%

 

$

28,402,197

$

387,328

5.54

%

Securities

 

 

 

 

 

 

 

Taxable

 

3,801,278

 

42,458

4.43

%

 

 

3,421,072

 

25,086

2.91

%

Tax-exempt (2)

 

3,166,210

 

25,035

3.74

%

 

 

3,116,190

 

22,770

3.49

%

Interest-bearing due from banks

 

2,876,213

 

39,761

5.48

%

 

 

1,117,468

 

10,626

3.77

%

Resell agreements

 

507,368

 

3,216

2.51

%

 

 

521,787

 

3,432

2.61

%

Federal funds sold

 

 

%

 

 

 

%

Other

 

232,327

 

3,722

6.36

%

 

 

189,333

 

1,936

4.06

%

Total interest-earning assets

 

42,954,902

$

644,796

6.09

%

 

 

36,768,047

$

451,178

5.02

%

Nonearning assets

 

 

 

 

 

 

 

Intangible assets

 

1,875,546

 

 

 

 

1,881,597

 

 

Other nonearning assets

 

2,838,071

 

 

 

 

2,674,607

 

 

Total assets

$

47,668,519

 

 

 

$

41,324,251

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

Interest checking

 

10,821,528

 

106,368

3.90

%

 

 

7,262,128

 

36,808

2.01

%

Savings and money market

 

14,455,770

 

137,330

3.77

%

 

 

13,337,326

 

68,677

2.04

%

Time

 

4,895,690

 

53,858

4.36

%

 

 

3,091,594

 

15,014

1.93

%

Total interest-bearing deposits

 

30,172,988

 

297,556

3.91

%

 

 

23,691,048

 

120,499

2.02

%

Securities sold under agreements to repurchase

 

202,601

 

1,295

2.54

%

 

 

199,610

 

474

0.94

%

Federal Home Loan Bank advances

 

2,112,809

 

22,674

4.26

%

 

 

701,813

 

5,380

3.04

%

Subordinated debt and other borrowings

 

426,999

 

6,019

5.59

%

 

 

427,503

 

5,365

4.98

%

Total interest-bearing liabilities

 

32,915,397

 

327,544

3.95

%

 

 

25,019,974

 

131,718

2.09

%

Noninterest-bearing deposits

 

8,342,572

 

 

 

 

10,486,233

 

 

Total deposits and interest-bearing liabilities

 

41,257,969

$

327,544

3.15

%

 

 

35,506,207

$

131,718

1.47

%

Other liabilities

 

521,475

 

 

 

 

384,770

 

 

Shareholders' equity

 

5,889,075

 

 

 

 

5,433,274

 

 

Total liabilities and shareholders' equity

$

47,668,519

 

 

 

$

41,324,251

 

 

Net interest income

 

$

317,252

 

 

 

$

319,460

 

Net interest spread (3)

 

 

2.14

%

 

 

 

2.93

%

Net interest margin (4)

 

 

3.06

%

 

 

 

3.60

%

 

 

 

 

 

 

 

 

(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 $14.5 million of taxable equivalent income for the three months ended December 31, 2023 compared to $14.1 million for the three months ended December 31, 2022. The tax-exempt benefit has been reduced by the projected impact of tax-exempt income that will be disallowed pursuant to IRS Regulations as of and for the then current period presented.

(3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the three months ended December 31, 2023 would have been 2.94% compared to a net interest spread of 3.55% for the three months ended December 31, 2022.

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

 

 

 

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

 

 

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

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

 

 

 

 

(dollars in thousands)

Year ended

 

Year ended

December 31, 2023

 

December 31, 2022

 

Average

Balances

Interest

Rates/

Yields

 

Average

Balances

Interest

Rates/

Yields

Interest-earning assets

 

 

 

 

 

 

 

Loans (1) (2)

$

31,112,968

$

1,950,365

6.36

%

 

$

26,182,102

$

1,182,492

4.62

%

Securities

 

 

 

 

 

 

 

Taxable

 

3,562,527

 

140,308

3.94

%

 

 

3,405,346

 

67,063

1.97

%

Tax-exempt (2)

 

3,252,030

 

97,625

3.58

%

 

 

3,013,505

 

81,522

3.26

%

Interest-bearing due from banks

 

2,611,506

 

140,036

5.36

%

 

 

1,815,251

 

23,206

1.28

%

Resell agreements

 

508,190

 

13,176

2.59

%

 

 

1,010,443

 

14,106

1.40

%

Federal funds sold

 

 

%

 

 

 

%

Other

 

227,147

 

11,858

5.22

%

 

 

181,824

 

5,546

3.05

%

Total interest-earning assets

 

41,274,368

$

2,353,368

5.82

%

 

 

35,608,471

$

1,373,935

3.98

%

Nonearning assets

 

 

 

 

 

 

 

Intangible assets

 

1,878,204

 

 

 

 

1,877,870

 

 

Other nonearning assets

 

2,696,900

 

 

 

 

2,324,564

 

 

Total assets

$

45,849,472

 

 

 

$

39,810,905

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

Interest checking

 

9,565,965

 

333,631

3.49

%

 

 

6,737,026

 

63,549

0.94

%

Savings and money market

 

14,162,523

 

473,327

3.34

%

 

 

12,695,974

 

112,218

0.88

%

Time

 

4,606,756

 

176,160

3.82

%

 

 

2,478,629

 

28,352

1.14

%

Total interest-bearing deposits

 

28,335,244

 

983,118

3.47

%

 

 

21,911,629

 

204,119

0.93

%

Securities sold under agreements to repurchase

 

192,132

 

3,744

1.95

%

 

 

203,082

 

794

0.39

%

Federal Home Loan Bank advances

 

1,935,204

 

80,958

4.18

%

 

 

923,964

 

20,848

2.26

%

Subordinated debt and other borrowings

 

426,784

 

23,430

5.49

%

 

 

429,169

 

18,881

4.40

%

Total interest-bearing liabilities

 

30,889,364

 

1,091,250

3.53

%

 

 

23,467,844

 

244,642

1.04

%

Noninterest-bearing deposits

 

8,736,843

 

 

 

 

10,674,249

 

 

Total deposits and interest-bearing liabilities

 

39,626,207

$

1,091,250

2.75

%

 

 

34,142,093

$

244,642

0.72

%

Other liabilities

 

428,348

 

 

 

 

297,409

 

 

Shareholders' equity

 

5,794,917

 

 

 

 

5,371,403

 

 

Total liabilities and shareholders' equity

$

45,849,472

 

 

 

$

39,810,905

 

 

Net interest income

 

$

1,262,118

 

 

 

$

1,129,293

 

Net interest spread (3)

 

 

2.29

%

 

 

 

2.94

%

Net interest margin (4)

 

 

3.18

%

 

 

 

3.29

%

 

 

 

 

 

 

 

 

(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 $48.5 million of taxable equivalent income for the year ended December 31, 2023 compared to $43.0 million for the year ended December 31, 2022. The tax-exempt benefit has been reduced by the projected impact of tax-exempt income that will be disallowed pursuant to IRS Regulations as of and for the then current period presented.

(3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the year ended December 31, 2023 would have been 3.07% compared to a net interest spread of 3.26% for the year ended December 31, 2022.

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

 

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

 

 

 

 

 

 

(dollars in thousands)

December

September

June

March

December

September

2023

2023

2023

2023

2022

2022

Asset quality information and ratios:

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

Nonaccrual loans

$

82,288

 

42,950

 

44,289

 

36,988

 

38,116

 

34,115

 

ORE and other nonperforming assets (NPAs)

 

4,347

 

3,019

 

3,105

 

7,802

 

7,952

 

7,787

 

Total nonperforming assets

$

86,635

 

45,969

 

47,394

 

44,790

 

46,068

 

41,902

 

Past due loans over 90 days and still accruing interest

$

6,004

 

4,969

 

5,257

 

5,284

 

4,406

 

6,757

 

Accruing purchase credit deteriorated loans

$

6,501

 

7,010

 

7,415

 

7,684

 

8,060

 

8,759

 

Net loan charge-offs

$

13,451

 

18,093

 

9,771

 

7,291

 

11,729

 

10,983

 

Allowance for credit losses to nonaccrual loans

 

429.0

%

806.0

%

762.0

%

848.5

%

788.8

%

844.5

%

As a percentage of total loans:

 

 

 

 

 

 

Past due accruing loans over 30 days

 

0.23

%

0.16

%

0.14

%

0.14

%

0.15

%

0.13

%

Potential problem loans

 

0.39

%

0.42

%

0.32

%

0.22

%

0.19

%

0.21

%

Allowance for credit losses

 

1.08

%

1.08

%

1.08

%

1.04

%

1.04

%

1.04

%

Nonperforming assets to total loans, ORE and other NPAs

 

0.27

%

0.14

%

0.15

%

0.15

%

0.16

%

0.15

%

Classified asset ratio (Pinnacle Bank) (6)

 

5.2

%

4.6

%

3.3

%

2.7

%

2.4

%

2.6

%

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

 

0.17

%

0.23

%

0.13

%

0.10

%

0.17

%

0.16

%

 

 

 

 

 

 

 

Interest rates and yields:

 

 

 

 

 

 

Loans

 

6.62

%

6.50

%

6.30

%

6.00

%

5.54

%

4.73

%

Securities

 

4.12

%

3.81

%

3.66

%

3.47

%

3.19

%

2.66

%

Total earning assets

 

6.09

%

5.95

%

5.74

%

5.45

%

5.02

%

4.20

%

Total deposits, including non-interest bearing

 

3.07

%

2.92

%

2.52

%

2.03

%

1.40

%

0.66

%

Securities sold under agreements to repurchase

 

2.54

%

2.30

%

1.93

%

1.10

%

0.94

%

0.34

%

FHLB advances

 

4.26

%

4.22

%

4.20

%

3.94

%

3.04

%

2.26

%

Subordinated debt and other borrowings

 

5.59

%

5.54

%

5.44

%

5.38

%

4.98

%

4.51

%

Total deposits and interest-bearing liabilities

 

3.15

%

3.01

%

2.65

%

2.12

%

1.47

%

0.75

%

 

 

 

 

 

 

 

Capital and other ratios (6):

 

 

 

 

 

 

Pinnacle Financial ratios:

 

 

 

 

 

 

Shareholders' equity to total assets

 

12.6

%

12.3

%

12.5

%

12.6

%

13.2

%

13.0

%

Common equity Tier one

 

10.3

%

10.3

%

10.2

%

9.9

%

10.0

%

10.0

%

Tier one risk-based

 

10.8

%

10.9

%

10.8

%

10.5

%

10.5

%

10.7

%

Total risk-based

 

12.7

%

12.8

%

12.7

%

12.4

%

12.4

%

12.6

%

Leverage

 

9.4

%

9.4

%

9.5

%

9.6

%

9.7

%

9.7

%

Tangible common equity to tangible assets

 

8.6

%

8.2

%

8.3

%

8.3

%

8.5

%

8.3

%

Pinnacle Bank ratios:

 

 

 

 

 

 

Common equity Tier one

 

11.1

%

11.2

%

11.1

%

10.8

%

10.9

%

11.1

%

Tier one risk-based

 

11.1

%

11.2

%

11.1

%

10.8

%

10.9

%

11.1

%

Total risk-based

 

12.0

%

12.0

%

11.9

%

11.6

%

11.6

%

11.8

%

Leverage

 

9.7

%

9.7

%

9.8

%

9.9

%

10.1

%

10.1

%

Construction and land development loans

as a percentage of total capital (17)

 

84.2

%

83.1

%

84.5

%

88.5

%

85.9

%

85.4

%

Non-owner occupied commercial real estate and

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

 

259.0

%

256.4

%

256.7

%

261.1

%

249.6

%

244.0

%

 

 

 

 

 

 

 

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)

December

September

June

March

December

September

2023

2023

2023

2023

2022

2022

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

Earnings per common share – basic

$

1.20

 

1.69

 

2.55

 

1.76

 

1.77

 

1.91

 

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

$

1.70

 

1.79

 

1.80

 

1.76

 

1.77

 

1.91

 

Earnings per common share – diluted

$

1.19

 

1.69

 

2.54

 

1.76

 

1.76

 

1.91

 

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

$

1.68

 

1.79

 

1.79

 

1.76

 

1.76

 

1.91

 

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)

$

75.80

 

73.23

 

73.32

 

71.24

 

69.35

 

67.07

 

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

$

51.38

 

48.78

 

48.85

 

46.75

 

44.74

 

42.44

 

Revenue per diluted common share

$

5.16

 

5.35

 

6.43

 

5.28

 

5.27

 

5.40

 

Revenue per diluted common share, excluding non-GAAP adjustments

$

5.25

 

5.48

 

5.43

 

5.28

 

5.27

 

5.40

 

 

 

 

 

 

 

 

 

Investor information:

 

 

 

 

 

 

 

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

$

87.22

 

67.04

 

56.65

 

55.16

 

73.40

 

81.10

 

High closing sales price of common stock during quarter

$

89.34

 

75.95

 

57.93

 

82.79

 

87.81

 

87.66

 

Low closing sales price of common stock during quarter

$

60.77

 

56.41

 

46.17

 

52.51

 

70.74

 

68.68

 

 

 

 

 

 

 

 

 

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

$

22.60

 

22.70

 

23.75

 

24.15

 

25.35

 

25.33

 

High closing sales price of depositary shares during quarter

$

23.65

 

23.85

 

24.90

 

25.71

 

25.60

 

26.23

 

Low closing sales price of depositary shares during quarter

$

21.00

 

21.54

 

19.95

 

20.77

 

23.11

 

24.76

 

 

 

 

 

 

 

 

 

Other information:

 

 

 

 

 

 

 

Residential mortgage loan sales:

 

 

 

 

 

 

 

Gross loans sold

$

142,556

 

198,247

 

192,948

 

120,146

 

134,514

 

181,139

 

Gross fees (8)

$

3,191

 

4,350

 

4,133

 

2,795

 

3,149

 

3,189

 

Gross fees as a percentage of loans originated

 

2.24

%

2.19

%

2.14

%

2.33

%

2.34

%

1.76

%

Net gain (loss) on residential mortgage loans sold

$

879

 

2,012

 

1,567

 

2,053

 

(65

)

1,117

 

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

$

14

 

(9,727

)

(9,961

)

 

 

217

 

Brokerage account assets, at quarter end (9)

$

9,810,457

 

9,041,716

 

9,007,230

 

8,634,339

 

8,049,125

 

7,220,405

 

Trust account managed assets, at quarter end

$

5,530,495

 

5,047,128

 

5,084,592

 

4,855,951

 

4,560,752

 

4,162,639

 

Core deposits (10)

$

33,738,917

 

33,606,783

 

32,780,767

 

32,054,111

 

31,301,077

 

30,748,817

 

Core deposits to total funding (10)

 

81.7

%

81.9

%

80.9

%

82.4

%

86.8

%

87.4

%

Risk-weighted assets

$

40,205,295

 

39,527,086

 

38,853,588

 

38,117,659

 

36,216,901

 

35,281,315

 

Number of offices

 

128

 

128

 

127

 

126

 

123

 

120

 

Total core deposits per office

$

263,585

 

262,553

 

258,116

 

254,398

 

254,480

 

256,240

 

Total assets per full-time equivalent employee

$

14,287

 

14,274

 

14,166

 

13,750

 

12,948

 

12,875

 

Annualized revenues per full-time equivalent employee

$

468.4

 

486.2

 

593.0

 

496.5

 

491.8

 

511.5

 

Annualized expenses per full-time equivalent employee

$

296.8

 

254.1

 

256.5

 

261.7

 

247.3

 

248.2

 

Number of employees (full-time equivalent)

 

3,357.0

 

3,329.5

 

3,309.0

 

3,281.5

 

3,241.5

 

3,184.5

 

Associate retention rate (11)

 

94.2

%

93.6

%

94.1

%

93.8

%

93.8

%

93.6

%

 

 

 

��

 

 

 

 

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

 

Year ended

(dollars in thousands, except per share data)

December

September

December

 

December

December

2023

2023

2022

 

2023

2022

 

 

 

 

 

 

 

Net interest income

$

317,252

 

317,242

 

319,460

 

 

1,262,118

 

1,129,293

 

 

 

 

 

 

 

 

Noninterest income

 

79,088

 

90,797

 

82,321

 

 

433,253

 

416,124

 

Total revenues

 

396,340

 

408,039

 

401,781

 

 

1,695,371

 

1,545,417

 

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

 

(14

)

9,727

 

 

 

19,674

 

(156

)

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

 

 

 

 

 

(85,692

)

 

Loss on BOLI restructuring

 

7,166

 

 

 

 

7,166

 

 

Total revenues excluding the impact of adjustments noted above

$

403,492

 

417,766

 

401,781

 

 

1,636,519

 

1,545,261

 

 

 

 

 

 

 

 

Noninterest expense

$

251,168

 

213,233

 

202,047

 

 

887,769

 

779,999

 

Less: ORE expense (benefit)

 

125

 

33

 

179

 

 

315

 

280

 

FDIC special assessment

 

29,000

 

 

 

 

29,000

 

 

Noninterest expense excluding the impact of adjustments noted above

$

222,043

 

213,200

 

201,868

 

 

858,454

 

779,719

 

 

 

 

 

 

 

 

Pre-tax income

$

128,858

 

167,980

 

174,929

 

 

714,006

 

697,493

 

Provision for credit losses

 

16,314

 

26,826

 

24,805

 

 

93,596

 

67,925

 

Pre-tax pre-provision net revenue

 

145,172

 

194,806

 

199,734

 

 

807,602

 

765,418

 

Less: Adjustments noted above

 

36,277

 

9,760

 

179

 

 

(29,537

)

124

 

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

$

181,449

 

204,566

 

199,913

 

 

778,065

 

765,542

 

 

 

 

 

 

 

 

Noninterest income

$

79,088

 

90,797

 

82,321

 

 

433,253

 

416,124

 

Less: Adjustments noted above

 

7,152

 

9,727

 

 

 

(58,852

)

(156

)

Noninterest income excluding the impact of adjustments noted above

$

86,240

 

100,524

 

82,321

 

 

374,401

 

415,968

 

 

 

 

 

 

 

 

Efficiency ratio (4)

 

63.37

%

52.26

%

50.29

%

 

52.36

%

50.47

%

Adjustments noted above

 

(8.34

)%

(1.23

)%

(0.05

)%

 

0.10

%

(0.01

)%

Efficiency ratio excluding adjustments noted above (4)

 

55.03

%

51.03

%

50.24

%

 

52.46

%

50.46

%

 

 

 

 

 

 

 

Total average assets

$

47,668,519

 

47,266,199

 

41,324,251

 

 

45,849,472

 

39,810,905

 

 

 

 

 

 

 

 

Noninterest income to average assets (1)

 

0.66

%

0.76

%

0.79

%

 

0.94

%

1.05

%

Less: Adjustments noted above

 

0.06

%

0.08

%

%

 

(0.12

)%

(0.01

)%

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

 

0.72

%

0.84

%

0.79

%

 

0.82

%

1.04

%

 

 

 

 

 

 

 

Noninterest expense to average assets (1)

 

2.09

%

1.79

%

1.94

%

 

1.94

%

1.96

%

Adjustments as noted above

 

(0.24

)%

%

%

 

(0.07

)%

%

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

 

1.85

%

1.79

%

1.94

%

 

1.87

%

1.96

%

 

 

 

 

 

 

 

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)

December

September

June

March

December

September

2023

2023

2023

2023

2022

2022

Net income available to common shareholders

$

91,181

 

128,805

 

193,501

 

133,473

 

134,049

 

144,860

 

Less:

 

 

 

 

 

 

Investment (gains) losses on sales of securities, net

 

(14

)

9,727

 

9,961

 

 

 

(217

)

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

 

 

 

(85,692

)

 

 

 

Loss on BOLI restructuring

 

16,252

 

 

 

 

 

 

ORE expense (benefit)

 

125

 

33

 

58

 

99

 

179

 

(90

)

FDIC special assessment

 

29,000

 

 

 

 

 

 

Tax effect on above noted adjustments (16)

 

(7,278

)

(2,440

)

18,918

 

(25

)

(47

)

80

 

Net income available to common shareholders excluding adjustments noted above

$

129,266

 

136,125

 

136,746

 

133,547

 

134,181

 

144,633

 

 

 

 

 

 

 

 

Basic earnings per common share

$

1.20

 

1.69

 

2.55

 

1.76

 

1.77

 

1.91

 

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

 

 

 

 

 

 

ORE expense (benefit)

 

 

 

 

 

 

 

FDIC special assessment

 

0.38

 

 

 

 

 

 

Tax effect on above noted adjustments (16)

 

(0.10

)

(0.03

)

0.25

 

 

 

 

Basic earnings per common share excluding adjustments noted above

$

1.70

 

1.79

 

1.80

 

1.76

 

1.77

 

1.91

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

1.19

 

1.69

 

2.54

 

1.76

 

1.76

 

1.91

 

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

 

 

 

 

 

 

ORE expense (benefit)

 

 

 

 

 

 

 

FDIC special assessment

 

0.38

 

 

 

 

 

 

Tax effect on above noted adjustments (16)

 

(0.09

)

(0.03

)

0.25

 

 

 

 

Diluted earnings per common share excluding the adjustments noted above

$

1.68

 

1.79

 

1.80

 

1.76

 

1.76

 

1.90

 

 

 

 

 

 

 

 

Revenue per diluted common share

$

5.16

 

5.35

 

6.43

 

5.28

 

5.27

 

5.40

 

Adjustments due to revenue-impacting items as noted above

 

0.09

 

0.13

 

(1.00

)

 

 

 

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

$

5.25

 

5.48

 

5.43

 

5.28

 

5.27

 

5.40

 

 

 

 

 

 

 

 

Book value per common share at quarter end (7)

$

75.80

 

73.23

 

73.32

 

71.24

 

69.35

 

67.07

 

Adjustment due to goodwill, core deposit and other intangible assets

 

(24.42

)

(24.45

)

(24.47

)

(24.49

)

(24.61

)

(24.63

)

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

$

51.38

 

48.78

 

48.85

 

46.75

 

44.74

 

42.44

 

 

 

 

 

 

 

 

Equity method investment (15)

 

 

 

 

 

 

Fee income from BHG, net of amortization

$

14,432

 

24,967

 

26,924

 

19,079

 

21,005

 

41,341

 

Funding cost to support investment

 

5,803

 

6,546

 

6,005

 

5,768

 

5,438

 

4,680

 

Pre-tax impact of BHG

 

8,629

 

18,421

 

20,919

 

13,311

 

15,567

 

36,661

 

Income tax expense at statutory rates (16)

 

2,157

 

4,605

 

5,230

 

3,328

 

4,069

 

9,583

 

Earnings attributable to BHG

$

6,472

 

13,816

 

15,689

 

9,983

 

11,498

 

27,078

 

 

 

 

 

 

 

 

Basic earnings per common share attributable to BHG

$

0.09

 

0.18

 

0.21

 

0.13

 

0.15

 

0.36

 

Diluted earnings per common share attributable to BHG

$

0.08

 

0.18

 

0.21

 

0.13

 

0.15

 

0.36

 

 

 

 

 

 

 

 

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

 

 

 

 

 

Year ended

(dollars in thousands, except per share data)

 

December 31,

 

2023

2022

Net income available to common shareholders

 

$

546,960

 

545,550

 

Less:

 

 

 

Investment losses on sales of securities, net

 

 

19,674

 

(156

)

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

 

 

(85,692

)

 

Loss on BOLI restructuring

 

 

16,252

 

 

ORE expense

 

 

315

 

280

 

FDIC special assessment

 

 

29,000

 

 

Tax effect on above noted adjustments (16)

 

 

9,176

 

(32

)

Net income available to common shareholders excluding adjustments noted above

 

$

535,685

 

545,642

 

 

 

 

 

Basic earnings per common share

 

$

7.20

 

7.20

 

Less:

 

 

 

Investment losses on sales of securities, net

 

 

0.26

 

 

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

 

 

(1.12

)

 

Loss on BOLI restructuring

 

 

0.21

 

 

ORE expense

 

 

 

 

FDIC special assessment

 

 

0.38

 

 

Tax effect on above noted adjustments (16)

 

 

0.12

 

 

Basic earnings per common share excluding adjustments noted above

 

$

7.05

 

7.20

 

 

 

 

 

Diluted earnings per common share

 

 

7.14

 

7.17

 

Less:

 

 

 

Investment losses on sales of securities, net

 

 

0.26

 

 

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

 

 

(1.12

)

 

Loss on BOLI restructuring

 

 

0.21

 

 

ORE expense

 

 

 

 

FDIC special assessment

 

 

0.38

 

 

Tax effect on above noted adjustments (16)

 

 

0.12

 

 

Diluted earnings per common share excluding the adjustments noted above

 

$

6.99

 

7.17

 

 

 

 

 

Revenue per diluted common share

 

$

22.12

 

20.30

 

Adjustments due to revenue-impacting items as noted above

 

 

(0.77

)

 

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

 

$

21.35

 

20.30

 

 

 

 

 

Equity method investment (15)

 

 

 

Fee income from BHG, net of amortization

 

$

85,402

 

145,466

 

Funding cost to support investment

 

 

23,430

 

14,671

 

Pre-tax impact of BHG

 

 

61,972

 

130,795

 

Income tax expense at statutory rates (16)

 

 

15,493

 

34,190

 

Earnings attributable to BHG

 

$

46,479

 

96,605

 

 

 

 

 

Basic earnings per common share attributable to BHG

 

$

0.61

 

1.28

 

Diluted earnings per common share attributable to BHG

 

$

0.61

 

1.27

 

 

 

 

 

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

 

Year ended

(dollars in thousands, except per share data)

December

September

December

 

December

December

2023

2023

2022

 

2023

2022

 

 

 

 

 

 

 

Return on average assets (1)

 

0.76

%

1.08

%

1.29

%

 

 

1.19

%

1.37

%

Adjustments as noted above

 

0.32

%

0.06

%

%

 

 

(0.02

)%

%

Return on average assets excluding adjustments noted above (1)

 

1.08

%

1.14

%

1.29

%

 

 

1.17

%

1.37

%

 

 

 

 

 

 

 

Tangible assets:

 

 

 

 

 

 

Total assets

$

47,959,883

 

47,523,790

 

41,970,021

 

 

$

47,959,883

 

41,970,021

 

Less: Goodwill

 

(1,846,973

)

(1,846,973

)

(1,846,973

)

 

 

(1,846,973

)

(1,846,973

)

Core deposit and other intangible assets

 

(27,465

)

(29,216

)

(34,555

)

 

 

(27,465

)

(34,555

)

Net tangible assets

$

46,085,445

 

45,647,601

 

40,088,493

 

 

$

46,085,445

 

40,088,493

 

 

 

 

 

 

 

 

Tangible common equity:

 

 

 

 

 

 

Total shareholders' equity

$

6,035,788

 

5,837,641

 

5,519,392

 

 

$

6,035,788

 

5,519,392

 

Less: Preferred shareholders' equity

 

(217,126

)

(217,126

)

(217,126

)

 

 

(217,126

)

(217,126

)

Total common shareholders' equity

 

5,818,662

 

5,620,515

 

5,302,266

 

 

 

5,818,662

 

5,302,266

 

Less: Goodwill

 

(1,846,973

)

(1,846,973

)

(1,846,973

)

 

 

(1,846,973

)

(1,846,973

)

Core deposit and other intangible assets

 

(27,465

)

(29,216

)

(34,555

)

 

 

(27,465

)

(34,555

)

Net tangible common equity

$

3,944,224

 

3,744,326

 

3,420,738

 

 

$

3,944,224

 

3,420,738

 

 

 

 

 

 

 

 

Ratio of tangible common equity to tangible assets

 

8.56

%

8.20

%

8.53

%

 

 

8.56

%

8.53

%

 

 

 

 

 

 

 

Average tangible assets:

 

 

 

 

 

 

Average assets

$

47,668,519

 

47,266,199

 

41,324,251

 

 

$

45,849,472

 

39,810,905

 

Less: Average goodwill

 

(1,846,973

)

(1,846,973

)

(1,846,471

)

 

 

(1,846,973

)

(1,843,708

)

Average core deposit and other intangible assets

 

(28,573

)

(30,367

)

(35,126

)

 

 

(31,231

)

(34,162

)

Net average tangible assets

$

45,792,973

 

45,388,859

 

39,442,654

 

 

$

43,971,268

 

37,933,035

 

 

 

 

 

 

 

 

Return on average assets (1)

 

0.76

%

1.08

%

1.29

%

 

 

1.19

%

1.37

%

Adjustment due to goodwill, core deposit and other intangible assets

 

0.03

%

0.04

%

0.06

%

 

 

0.05

%

0.07

%

Return on average tangible assets (1)

 

0.79

%

1.13

%

1.35

%

 

 

1.24

%

1.44

%

Adjustments as noted above

 

0.33

%

0.06

%

%

 

 

(0.02

)%

%

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

 

1.12

%

1.19

%

1.35

%

 

 

1.22

%

1.44

%

 

 

 

 

 

 

 

Average tangible common equity:

 

 

 

 

 

 

Average shareholders' equity

$

5,889,075

 

5,898,196

 

5,433,274

 

 

$

5,794,917

 

5,371,403

 

Less: Average preferred equity

 

(217,126

)

(217,126

)

(217,126

)

 

 

(217,126

)

(217,126

)

Average common equity

 

5,671,949

 

5,681,070

 

5,216,148

 

 

 

5,577,791

 

5,154,277

 

Less: Average goodwill

 

(1,846,973

)

(1,846,973

)

(1,846,471

)

 

 

(1,846,973

)

(1,843,708

)

Average core deposit and other intangible assets

 

(28,573

)

(30,367

)

(35,126

)

 

 

(31,231

)

(34,162

)

Net average tangible common equity

$

3,796,403

 

3,803,730

 

3,334,551

 

 

$

3,699,587

 

3,276,407

 

 

 

 

 

 

 

 

Return on average equity (1)

 

6.14

%

8.66

%

9.79

%

 

 

9.44

%

10.16

%

Adjustment due to average preferred shareholders' equity

 

0.24

%

0.34

%

0.41

%

 

 

0.37

%

0.43

%

Return on average common equity (1)

 

6.38

%

9.00

%

10.20

%

 

 

9.81

%

10.58

%

Adjustment due to goodwill, core deposit and other intangible assets

 

3.15

%

4.44

%

5.75

%

 

 

4.97

%

6.07

%

Return on average tangible common equity (1)

 

9.53

%

13.43

%

15.95

%

 

 

14.78

%

16.65

%

Adjustments as noted above

 

3.98

%

0.76

%

0.01

%

 

 

(0.30

)%

%

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

 

13.51

%

14.20

%

15.96

%

 

 

14.48

%

16.65

%

 

 

 

 

 

 

 

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

 

 

 

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

1. Ratios are presented on an annualized basis.

2. Net interest margin is the result of net interest income on a tax equivalent basis divided by average interest earning assets.

3. Total revenue is equal to the sum of net interest income and noninterest income.

4. Efficiency ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income.

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

6. Capital ratios are calculated using regulatory reporting regulations enacted for such period and are defined as follows:

Equity to total assets – End of period total shareholders' equity as a percentage of end of period assets.

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

Leverage – Tier I capital (pursuant to risk-based capital guidelines) as a percentage of adjusted average assets.

Tier I risk-based – Tier I capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.

Total risk-based – Total capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.

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

Tier I common equity to risk weighted assets - Tier 1 capital (pursuant to risk-based capital guidelines) less the amount of any preferred stock or subordinated indebtedness that is considered as a component of Tier 1 capital as a percentage of total risk-weighted assets.

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

8. Amounts are included in the statement of 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, gain on sale of fixed assets as a result of the sale-leaseback transaction and the impact of BOLI restructuring.

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. Adjustment includes tax effect calculated using a blended statutory rate of 25.00 percent for 2023. For periods prior to 2023, tax effect calculated using a blended statutory rate of 26.14 percent. Loss on BOLI restructuring is not tax effected.

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

pnfp-earnings

Contacts

MEDIA CONTACT: Joe Bass, 615-743-8219

FINANCIAL CONTACT: Harold Carpenter, 615-744-3742

WEBSITE:
www.pnfp.com

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