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PINNACLE FINANCIAL PARTNERS, INC.

(PNFP)
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Pinnacle Financial Partners : PNFP Reports Diluted EPS of $1.75, ROAA of 1.47% and ROTCE of 16.98% for 3Q2021

10/12/2021 | 05:01pm EST

Linked quarter loan growth of 2.8% annualized, excluding impact of PPP, loan growth was 15.3% annualized

Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.75 for the quarter ended Sept. 30, 2021, compared to net income per diluted common share of $1.42 for the quarter ended Sept. 30, 2020, an increase of approximately 23.2 percent. Excluding ORE expense for the three months ended Sept. 30, 2021 and 2020 and gains and losses on the sale of investment securities and FHLB restructuring charges for the three months ended Sept. 30, 2020, net income per diluted common share was $1.75 for the three months ended Sept. 30, 2021, compared to $1.45 for the three months ended Sept. 30, 2020, a year-over-year increase of 20.7 percent.

Net income per diluted common share was $5.05 for the nine months ended Sept. 30, 2021, compared to net income per diluted common share of $2.62 for the nine months ended Sept. 30, 2020, an increase of nearly 93 percent. Excluding gains and losses on the sale of investment securities and other real estate (ORE) expense for the nine months ended Sept. 30, 2021 and 2020 and FHLB restructuring charges for the nine months ended Sept. 30, 2020, net income per diluted common share was $5.04 in 2021, compared to $2.72 in 2020, a year-over-year increase of 85.3 percent.

"Despite the ongoing uncertain economic climate, we continue to experience strong organic growth," said M. Terry Turner, Pinnacle's president and chief executive officer. "Our business model continued to serve us well during the third quarter. Aggregate loans grew at an annualized rate of 2.8 percent for the quarter, after excluding the impact of PPP forgiveness and paydowns of $664.2 million, other loans increased at an annualized rate of 15.3 percent. We continue to see increased lending opportunities as a result of our now two-decade long focus on hiring the best bankers in our markets.

"We successfully recruited 32 new revenue producers to our firm during the third quarter, and our ongoing recruiting pipelines are as strong as I can remember," Turner said. "We also remain very excited about our new markets, which include Atlanta, Huntsville and Birmingham, as well as our recent hires in the equipment finance and franchise lending segments. We believe our 2021 end-of-year loan balances should exceed 2020 end-of-year balances by 2 to 5 percent, or by 9 to 12 percent excluding PPP loans. Our current belief is that our 2022 loan growth, with our new markets and the strength of our hiring over the last few years, should produce low-double digit growth assuming an economic environment similar to the one we operate in presently."

BALANCE SHEET GROWTH:

  • Loans at Sept. 30, 2021 were $23.1 billion, an increase of approximately $581.1 million from Sept. 30, 2020, reflecting year-over-year growth of 2.6 percent. Loans at Sept. 30, 2021 increased approximately $160.5 million from June 30, 2021 reflecting linked-quarter annualized growth of 2.8 percent.
    • Loans at Sept. 30, 2021 include approximately $708.7 million of loans issued pursuant to the Small Business Administration’s (SBA’s) Paycheck Protection Program (PPP), compared to $2.3 billion at Sept. 30, 2020 and $1.4 billion at June 30, 2021. The average yield on these loans was 8.54 percent for the third quarter of 2021, inclusive of $18.5 million of loan fee accretion recognized during the quarter. At Sept. 30, 2021, $29.2 million in SBA PPP loan fees remained, which should be accreted into net interest income over the next nine months as these loans are repaid and/or are forgiven under the PPP.
      • PPP loans decreased by $664.2 million between June 30, 2021 and Sept. 30, 2021.
      • Excluding PPP loans, total loans increased by $824.7 million during the same period, or 15.3 percent on an annualized basis.
    • Average loans were $23.0 billion for the three months ended Sept. 30, 2021, down $193.0 million from the three months ended June 30, 2021, a linked-quarter annualized reduction of 3.3 percent.
      • Excluding the impact of $983.5 million of average PPP loans outstanding during the three months ended Sept. 30, 2021 and $1.9 billion during the three months ended June 30, 2021, average loans were $22.0 billion for the three months ended Sept. 30, 2021, up $752.9 million from $21.3 billion for the three months ended June 30, 2021, a linked-quarter annualized growth rate of 14.2 percent.
    • At Sept. 30, 2021, the remaining discount associated with fair value accounting adjustments on acquired loans was $17.6 million, compared to $20.6 million at June 30, 2021.
  • Deposits at Sept. 30, 2021 were $29.4 billion, an increase of $2.8 billion from Sept. 30, 2020, reflecting year-over-year growth of 10.6 percent. Deposits at Sept. 30, 2021 increased $1.2 billion from June 30, 2021, reflecting a linked-quarter annualized growth rate of 16.3 percent.
    • Average deposits were $28.7 billion for the three months ended Sept. 30, 2021, compared to $28.0 billion for the three months ended June 30, 2021, a linked-quarter annualized growth rate of 10.4 percent.
    • Core deposits were $27.2 billion at Sept. 30, 2021, compared to $22.0 billion at Sept. 30, 2020 and $25.9 billion at June 30, 2021. The linked-quarter annualized growth rate of core deposits in the third quarter of 2021 was 20.3 percent.

"During the third quarter, core deposits increased by 23.5 percent over our balances this time last year," Turner said. "We are very pleased that approximately 53 percent of the increase in core deposit balances is attributable to increases in noninterest bearing deposits. Our research indicates these increases come from many different sources, including PPP and quantitative easing as well as our depositors continuing to grow their deposit balances due to the ongoing uncertainties that exist in the economy. Approximately 15 percent of our average deposit growth this year is from new accounts."

REVENUES:

  • Revenues for the quarter ended Sept. 30, 2021 were $341.6 million, an increase of $10.2 million from the $331.4 million recognized in the second quarter of 2021, a linked-quarter annualized growth rate of 12.3 percent. Revenues were up $44.0 million from the third quarter of 2020, a year-over-year growth rate of 14.8 percent.
    • Revenue per fully diluted common share was at an all-time record of $4.50 for the three months ended Sept. 30, 2021, compared to $4.37 for the second quarter of 2021 and $3.95 for the third quarter of 2020, a 13.9 percent year-over-year growth rate.
  • Net interest income for the quarter ended Sept. 30, 2021 was $237.5 million, compared to $233.2 million for the second quarter of 2021 and $206.6 million for the third quarter of 2020, a year-over-year growth rate of 15.0 percent. Net interest margin was 3.03 percent for the third quarter of 2021, compared to 3.08 percent for the second quarter of 2021 and 2.82 percent for the third quarter of 2020.
    • Impacting the firm’s net interest margin in the second and third quarters of 2021 and the third quarter of 2020 were both the PPP loans and the firm’s decision early in the pandemic to maintain additional on-balance sheet liquidity. The firm estimates its second and third quarter 2021 net interest margin was negatively impacted by approximately 17 basis points as a result of PPP loans and additional liquidity, compared to approximately 40 basis points for the third quarter 2020.
    • Included in net interest income for the third quarter of 2021 was $2.8 million of discount accretion associated with fair value adjustments, compared to $3.3 million of discount accretion recognized in the second quarter of 2021 and $5.6 million in the third quarter of 2020. The firm's net interest margin was positively impacted by approximately 4 basis points, 3 basis points and 9 basis points, respectively, because of fair value adjustment discount accretion in each of the second and third quarters of 2021 and the third quarter of 2020. There remains $10.8 million of purchase accounting discount accretion as of Sept. 30, 2021.
  • Noninterest income for the quarter ended Sept. 30, 2021 was $104.1 million, compared to $98.2 million for the quarter ended June 30, 2021, a linked-quarter annualized increase of 24.0 percent. Compared to $91.1 million for the third quarter of 2020, noninterest income grew 14.3 percent year-over-year.
    • Service charges on deposit accounts were $11.4 million for the third quarter of 2021, compared to $8.9 million for the second quarter of 2021, a linked-quarter annualized increase of more than 100 percent primarily the result of vendor incentives received in the third quarter of 2021. Compared to $9.9 million for the third quarter of 2020, service charges on deposit accounts were up 16.0 percent.
    • Wealth management revenues, which include investment, trust and insurance services, were $17.3 million for the third quarter of 2021, compared to $16.5 million for the second quarter of 2021, a linked-quarter annualized increase of 19.2 percent. Compared to $13.0 million for the third quarter of 2020, wealth management revenues were up 32.7 percent.
    • Income from the firm's investment in BHG was $30.4 million for the quarter ended Sept. 30, 2021, down from $32.1 million for the quarter ended June 30, 2021 and up from $26.4 million for the quarter ended Sept. 30, 2020.
    • Net gains on mortgage loans sold were $7.8 million during the quarter ended Sept. 30, 2021, up from $6.7 million for the quarter ended June 30, 2021. Net gains on mortgage loans sold were down 59.8 percent from $19.5 million during the quarter ended Sept. 30, 2020. The dramatic year-over-year decline continues to be reflective of the unusual market conditions that existed in 2020.
    • Other noninterest income was $37.2 million for the quarter ended Sept. 30, 2021, compared to $33.7 million for the quarter ended June 30, 2021 and $21.7 million for the quarter ended Sept. 30, 2020, a linked-quarter annualized increase of 41.4 percent and year-over-year growth of 71.7 percent. Contributing to this growth were $8.6 million in income on other equity investments during the three months ended Sept. 30, 2021 compared to income of $7.0 million for the three months ended June 30, 2021 and $460,000 during the three months ended Sept. 30, 2020. Additionally, income from SBA loan sales increased by $2.3 million over the same quarter last year.
  • Pre-tax, pre-provision net revenues (PPNR) for the quarter ended Sept. 30, 2021 were $172.8 million, an increase of $7.5 million from the $165.3 million recognized in the second quarter of 2021, a linked-quarter annualized growth rate of 18.1 percent. PPNR was up $19.0 million from the third quarter of 2020, a year-over-year growth rate of 12.3 percent.
    • Excluding gains and losses on the sale of investment securities and ORE expense for the three months ended Sept. 30, 2021 and 2020 and FHLB restructuring charges for the three months ended Sept. 30, 2020, PPNR was $172.7 million, an increase of $8.4 million from the $164.3 million recognized in the second quarter of 2021, a linked-quarter annualized growth rate of 20.5 percent. PPNR, as adjusted, was up $15.8 million from the third quarter of 2020, a year-over-year growth rate of 10.0 percent.

"Several factors contributed to the linked-quarter decline in our net interest margin, which was attributable to the increase in on-balance sheet liquidity driven primarily by forgiveness and paydowns of PPP loans during the quarter," Pinnacle's Chief Financial Officer Harold Carpenter said. "Overall loan yields were up slightly at 4.13 percent in the third quarter. Excluding the impact of PPP loan yields, which had an average yield of 8.54 percent, loan yields decreased by 5 basis points in the third quarter of 2021, which offset a 3 basis point decrease in deposit rates.

"Third quarter was a record-breaking fee quarter for our firm. BHG continues to perform and, we believe, create significant franchise value. Mortgage rebounded in the third quarter as our gain on sale revenues increased by 16 percent from the second quarter. Wealth management had another strong quarter primarily due to broader market appreciation as well as the addition of 10 new wealth management advisors since Sept. 30, 2020. Additionally, excluding our investment in BHG, other equity investments had another big quarter, with these investments contributing $8.6 million to third quarter revenues. That was $1.6 million more than the amount recorded in the second quarter, as several of our venture fund investments experienced increased valuations in their underlying portfolios. Collectively, these investments have contributed $19.0 million more in fee income for the first nine months of 2021 compared to the same period last year."

PROFITABILITY:

  • Return on average assets was 1.47 percent for the third quarter of 2021, compared to 1.46 percent for the second quarter of 2021 and 1.26 percent for the third quarter of 2020. Third quarter 2021 return on average tangible assets amounted to 1.55 percent, compared to 1.55 percent for the second quarter of 2021 and 1.33 percent for the third quarter of 2020.
    • Excluding the adjustments described above for the three months ended Sept. 30, 2021, June 30, 2021 and Sept. 30, 2020, return on average assets was 1.47 percent for the third quarter of 2021, compared to 1.46 percent for the second quarter of 2021 and 1.28 percent for the third quarter of 2020. Likewise, excluding those same adjustments, the firm’s return on average tangible assets was 1.55 percent for the third quarter of 2021, compared to 1.54 percent for the second quarter of 2021 and 1.36 percent for the third quarter of 2020.
  • Return on average equity for the third quarter of 2021 amounted to 10.18 percent, compared to 10.19 percent for the second quarter of 2021 and 8.92 percent for the third quarter of 2020. Excluding preferred stockholders' equity for each of the three months ended Sept. 30, 2021, June 30, 2021 and Sept. 30, 2020, respectively, return on average common equity for the third quarter of 2021 amounted to 10.62 percent, compared to 10.65 percent for the second quarter of 2021 and 9.35 percent for the third quarter of 2020. Third quarter 2021 return on average tangible common equity amounted to 16.98 percent, compared to 17.32 percent for the second quarter of 2021 and 15.85 percent for the third quarter of 2020.
    • Excluding the adjustments described above for the three months ended Sept. 30, 2021, June 30, 2021 and June 30, 2020, return on average tangible common equity amounted to 16.97 percent for the third quarter of 2021, compared to 17.22 percent for the second quarter of 2021 and 16.19 percent for the third quarter of 2020.
  • Book value per share was $65.36 at Sept. 30, 2021, compared to $61.80 at the end of 2020, an annualized growth rate of 7.7 percent thus far this year. Since Dec. 31, 2016, book value per share has grown at a compound annual growth rate of 15.2 percent.
    • Tangible book value per share was $40.98 at Sept. 30, 2021, compared to $37.25 at the end of 2020, an annualized growth rate of 13.4 percent thus far this year. Since Dec. 31, 2016, tangible book value per share has grown at a compound annual growth rate of 15.4 percent.

"Maintaining our profitability at high levels and growing tangible book value predictably and consistently remain significant priorities for our firm," Carpenter said. "We continue to look for ways to leverage our excess liquidity into higher earning assets. We are exploring several options that provide a reasonable return while not resulting in excess risk to tangible book value growth."

MAINTAINING A STRONG BALANCE SHEET:

  • Net charge-offs were $9.3 million for the quarter ended Sept. 30, 2021, compared to $10.0 million for the quarter ended June 30, 2021 and $13.1 million for the quarter ended Sept. 30, 2020. Annualized net charge-offs as a percentage of average loans for the quarter ended Sept. 30, 2021 were 0.16 percent, compared to 0.17 percent for the quarter ended June 30, 2021 and 0.23 percent for the quarter ended Sept. 30, 2020.
  • Nonperforming assets were 0.24 percent of total loans and ORE at Sept. 30, 2021, compared to 0.27 percent at June 30, 2021 and 0.40 percent at Sept. 30, 2020. Nonperforming assets were $55.1 million at Sept. 30, 2021, compared to $62.7 million at June 30, 2021 and $90.8 million at Sept. 30, 2020.
  • The classified asset ratio at Sept. 30, 2021 was 5.6 percent, compared to 6.8 percent at June 30, 2021 and 9.9 percent at Sept. 30, 2020. Classified assets were $196.3 million at Sept. 30, 2021, compared to $233.8 million at June 30, 2021 and $307.8 million at Sept. 30, 2020.
  • The allowance for credit losses represented 1.17 percent of total loans at Sept. 30, 2021, compared to 1.20 percent at June 30, 2021 and 1.28 percent at Sept. 30, 2020. Excluding PPP loans, the allowance for credit losses as a percentage of total loans was 1.20 percent at Sept. 30, 2021 compared to 1.27 percent at June 30, 2021 and 1.43 percent at Sept. 30, 2020.
    • The ratio of the allowance for credit losses to nonperforming loans at Sept. 30, 2021 was 575.3 percent, compared to 515.5 percent at June 30, 2021 and 404.3 percent at Sept. 30, 2020.
    • Provision for credit losses was $3.4 million in the third quarter of 2021, compared to $2.8 million in the second quarter of 2021 and was $16.8 million in the third quarter of 2020.

"We continue to be very pleased with our credit performance which we believe is the result of the hard work of our relationship managers and credit officers," Carpenter said. "The big three soundness measurements of net charge-offs, nonperformers and classified assets are all down from the previous quarter. Our allowance for credit losses as a percentage of total loans decreased to 1.17 percent at Sept. 30, 2021, which was slightly less than the same ratio at June 30, 2021. We believe the reduction in this ratio will continue for the next several quarters and, hopefully, with continued steady improvement in the economy, through next year."

OPERATING LEVERAGE AND OTHER HIGHLIGHTS:

  • The firm's efficiency ratio for the third quarter of 2021 was 49.4 percent, compared to 50.1 percent for the second quarter of 2021 and 48.3 percent in the third quarter of 2020. The ratio of noninterest expenses to average assets was 1.87 percent for the third quarter of 2021, compared to 1.90 percent in the second quarter of 2021 and 1.69 percent in the third quarter of 2020.
    • Excluding the adjustments described above for the three months ended Sept. 30, 2021, June 30, 2021 and Sept. 30, 2020, the efficiency ratio was 49.5 percent for the third quarter of 2021, compared to 50.4 percent for the second quarter of 2021 and 47.2 percent for the third quarter of 2020. Excluding ORE expense for 2021 and 2020 and FHLB restructuring charges for 2020, the ratio of noninterest expense to average assets was 1.87 percent for the third quarter of 2021, compared to 1.91 percent for the second quarter of 2021 and 1.65 percent for the third quarter of 2020.
  • Noninterest expense for the quarter ended Sept. 30, 2021 was $168.9 million, compared to $166.1 million in the second quarter of 2021 and $143.9 million in the third quarter of 2020, reflecting a year-over-year increase of 17.4 percent. Excluding ORE expense for 2021 and 2020, and FHLB restructuring charges for 2020, noninterest expense for the third quarter of 2021 increased 20.6 percent over the third quarter of 2020 and 1.3 percent over the second quarter of 2021.
    • Salaries and employee benefits were $112.4 million in the third quarter of 2021, compared to $110.8 million in the second quarter of 2021 and $90.1 million in the third quarter of 2020, reflecting a year-over-year increase of 24.8 percent.
      • Incentive costs related to the firm’s annual cash incentive plan amounted to approximately $23.4 million in the third quarter of 2021, compared to $25.5 million in the second quarter of 2021 and $15.2 million in the third quarter of 2020.
      • Incentive costs related to the Company’s equity compensation plans amounted to approximately $6.8 million in the third quarter of 2021 compared to $5.7 million in second quarter of 2021 and $4.4 million in the third quarter of 2020.
    • Noninterest expense categories, other than salaries and employee benefits, were $56.4 million in the third quarter of 2021, compared to $55.3 million in the second quarter of 2021 and $53.7 million in the third quarter of 2020, reflecting a year-over-year increase of 5.0 percent.
  • The effective tax rate for the third quarter of 2021 was 19.4 percent, compared to 18.9 percent for the second quarter of 2021 and 19.3 percent for the third quarter of 2020.

"As anticipated, expenses were essentially flat when compared to the second quarter of 2021," Carpenter said. "We continue to accrue our annual cash incentives at the maximum award level and increased our equity incentive accruals to an estimated above-target award. We believe total expenses for the fourth quarter of 2021 should be flat to down from the amounts reported in the second and third quarters of 2021. Looking to 2022, we believe our expense growth should range between 8 to 11 percent in comparison to 2021."

BOARD OF DIRECTORS DECLARES DIVIDENDS

On Oct. 12, 2021, Pinnacle Financial's Board of Directors approved a quarterly cash dividend of $0.18 per common share to be paid on Nov. 26, 2021 to common shareholders of record as of the close of business on Nov. 5, 2021. Additionally, the Board of Directors approved a quarterly 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, 2021 to shareholders of record at the close of business on Nov. 16, 2021. 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. CT on Oct. 13, 2021, to discuss third quarter 2021 results and other matters. To access the call for audio only, please call 1-877-602-7944. For the presentation and streaming audio, please access the webcast on the investor relations page of Pinnacle's website at www.pnfp.com.

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

Pinnacle Financial Partners provides a full range of banking, investment, trust, mortgage and insurance products and services designed for businesses and their owners and individuals interested in a comprehensive relationship with their financial institution. The firm is the No. 1 bank in the Nashville-Murfreesboro-Franklin MSA, according to 2021 deposit data from the FDIC. Pinnacle earned a spot on the 2021 list of 100 Best Companies to Work For® in the U.S., its fifth consecutive appearance. American Banker recognized Pinnacle as one of America’s Best Banks to Work For eight years in a row and No. 1 among banks with more than $10 billion in assets in 2020.

Pinnacle owns a 49 percent interest in Bankers Healthcare Group (BHG), which provides innovative, hassle-free financial solutions to healthcare practitioners and other licensed professionals. Great Place to Work and FORTUNE ranked BHG No. 1 on its 2020 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 $36.5 billion in assets as of Sept. 30, 2021. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 14 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 resulting in significant increases in loan losses and provisions for those losses and, in the case of BHG, substitutions; (ii) the effects of new outbreaks of COVID-19, including actions taken by governmental officials to curb the spread of the virus, and the resulting impact on general economic and financial market conditions and on Pinnacle Financial's and its customers' business, results of operations, asset quality and financial condition; (iii) further public acceptance of the vaccines that were developed against the virus as well as the decisions of governmental agencies with respect to vaccines including recommendations related to booster shots and requirements that seek to mandate that individuals receive or employers require that their employees receive the vaccine; (iv) those vaccines' efficacy against the virus, including new variants; (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) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (vii) effectiveness of Pinnacle Financial's asset management activities in improving, resolving or liquidating lower-quality assets; (viii) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on Pinnacle Financial’s results, including as a result of compression to net interest margin; (ix) adverse conditions in the national or local economies including in Pinnacle Financial's markets throughout Tennessee, North Carolina, South Carolina, Georgia, Alabama and Virginia, particularly in commercial and residential real estate markets; (x) 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; (xi) the results of regulatory examinations; (xii) Pinnacle Financial's ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions; (xiii) difficulties and delays in integrating acquired businesses or fully realizing costs savings and other benefits from acquisitions; (xiv) BHG's ability to profitably grow its business and successfully execute on its business plans; (xv) risks of expansion into new geographic or product markets; (xvi) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits, including during times when Pinnacle Bank is seeking to lower rates it pays on deposits; (xvii) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including goodwill or other intangible assets; (xviii) the ineffectiveness of Pinnacle Bank's hedging strategies, or the unexpected counterparty failure or hedge failure of the underlying hedges; (xix) 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; (xx) deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xxi) 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; (xxii) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xxiii) 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; (xxiv) 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; (xxv) the risks associated with Pinnacle Financial and Pinnacle Bank being a minority investor in BHG, including the risk that the owners of a majority of the equity interests in BHG decide to sell the company or all or a portion of their ownership interests in BHG (triggering a similar sale by Pinnacle Financial and Pinnacle Bank) if not prohibited from doing so by Pinnacle Financial or Pinnacle Bank; (xxvi) the possibility of increased personal or corporate tax rates and the resulting reduction in our and our customers' businesses as a result of any such increases; (xxvii) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, like BHG, including regulatory or legislative developments; (xxviii) the availability of and access to capital; (xxix) 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, including as a result of Pinnacle Bank's participation in and execution of government programs related to the COVID-19 pandemic; and (xxx) 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, 2020, 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, earnings per diluted common share, PPNR, efficiency ratio and the ratio of noninterest expense to average assets, excluding in certain instances the impact of expenses related to other real estate owned, gains or losses on sale of investment securities, FHLB restructuring charges, hedge termination charges and other matters for the accounting periods presented. This release also includes non-GAAP financial measures which exclude the impact of loans originated under the PPP. This release may also contain certain other non-GAAP capital ratios and performance measures that exclude the impact of goodwill and core deposit intangibles associated with Pinnacle Financial's acquisitions of BNC, Avenue Bank, Magna Bank, CapitalMark Bank & Trust, Mid-America Bancshares, Inc., Cavalry Bancorp, Inc. and other acquisitions which collectively are less material to the non-GAAP measure as well as the impact of Pinnacle Financial's Series B Preferred Stock. The presentation of the non-GAAP financial information is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Because non-GAAP financial measures presented in this release are not measurements determined in accordance with GAAP and are susceptible to varying calculations, these non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures presented by other companies.

Pinnacle Financial believes that these non-GAAP financial measures facilitate making period-to-period comparisons and are meaningful indications of its operating performance. In addition, because intangible assets such as goodwill and the core deposit intangible, and the other items excluded each vary extensively from company to company, Pinnacle Financial believes that the presentation of this information allows investors to more easily compare Pinnacle Financial's results to the results of other companies. Pinnacle Financial's management utilizes this non-GAAP financial information to compare Pinnacle Financial's operating performance for 2021 versus certain periods in 2020 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,
2021

December 31,
2020

September 30,
2020

ASSETS

 

 

 

Cash and noninterest-bearing due from banks

$

155,965

 

$

203,296

 

$

179,231

 

Restricted cash

104,157

 

223,788

 

247,761

 

Interest-bearing due from banks

3,206,383

 

3,522,224

 

2,604,646

 

Federal funds sold and other

 

12,141

 

11,687

 

Cash and cash equivalents

3,466,505

 

3,961,449

 

3,043,325

 

Securities purchased with agreement to resell

500,000

 

 

 

Securities available-for-sale, at fair value

4,634,653

 

3,586,681

 

3,463,422

 

Securities held-to-maturity (fair value of $1.0 billion, $1.1 billion and $1.1 billion, net of allowance for credit losses of $161,000, $191,000 and $191,000 at Sept. 30, 2021, Dec. 31, 2020 and Sept. 30, 2020, respectively)

989,237

 

1,028,359

 

1,039,650

 

Consumer loans held-for-sale

55,273

 

87,821

 

82,748

 

Commercial loans held-for-sale

49,121

 

31,200

 

12,290

 

Loans

23,058,461

 

22,424,501

 

22,477,409

 

Less allowance for credit losses

(268,635)

 

(285,050)

 

(288,645)

 

Loans, net

22,789,826

 

22,139,451

 

22,188,764

 

Premises and equipment, net

288,833

 

290,001

 

287,711

 

Equity method investment

333,764

 

308,556

 

289,301

 

Accrued interest receivable

89,137

 

104,078

 

101,762

 

Goodwill

1,819,811

 

1,819,811

 

1,819,811

 

Core deposits and other intangible assets

35,876

 

42,336

 

44,713

 

Other real estate owned

8,415

 

12,360

 

19,445

 

Other assets

1,463,485

 

1,520,757

 

1,431,989

 

Total assets

$

36,523,936

 

$

34,932,860

 

$

33,824,931

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Deposits:

 

 

 

Noninterest-bearing

$

9,809,691

 

$

7,392,325

 

$

7,050,670

 

Interest-bearing

5,767,286

 

5,689,095

 

4,995,769

 

Savings and money market accounts

11,381,033

 

11,099,523

 

10,513,645

 

Time

2,411,797

 

3,524,632

 

3,983,872

 

Total deposits

29,369,807

 

27,705,575

 

26,543,956

 

Securities sold under agreements to repurchase

148,240

 

128,164

 

127,059

 

Federal Home Loan Bank advances

888,493

 

1,087,927

 

1,287,738

 

Subordinated debt and other borrowings

542,712

 

670,575

 

670,273

 

Accrued interest payable

11,838

 

24,934

 

26,101

 

Other liabilities

371,048

 

411,074

 

382,496

 

Total liabilities

31,332,138

 

30,028,249

 

29,037,623

 

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, 2021, Dec. 31, 2020 and Sept. 30, 2020, respectively

217,126

 

217,126

 

217,126

 

Common stock, par value $1.00; 180.0 million shares authorized; 76.1 million, 75.9 million and 75.8 million shares issued and outstanding at Sept. 30, 2021, Dec. 31, 2020 and Sept. 30, 2020, respectively

76,115

 

75,850

 

75,835

 

Additional paid-in capital

3,038,800

 

3,028,063

 

3,023,430

 

Retained earnings

1,748,491

 

1,407,723

 

1,312,929

 

Accumulated other comprehensive income, net of taxes

111,266

 

175,849

 

157,988

 

Total stockholders' equity

5,191,798

 

4,904,611

 

4,787,308

 

Total liabilities and stockholders' equity

$

36,523,936

 

$

34,932,860

 

$

33,824,931

 

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,
2021

June 30,
2021

September 30,
2020

September 30,
2021

September 30,
2020

Interest income:

 

 

 

 

 

Loans, including fees

$

233,857

 

$

232,788

 

$

224,482

 

$

694,017

 

$

687,183

 

Securities

 

 

 

 

 

Taxable

8,986

 

8,359

 

8,276

 

25,073

 

28,133

 

Tax-exempt

15,873

 

16,546

 

15,001

 

47,917

 

43,421

 

Federal funds sold and other

2,152

 

1,543

 

1,429

 

5,014

 

5,258

 

Total interest income

260,868

 

259,236

 

249,188

 

772,021

 

763,995

 

Interest expense:

 

 

 

 

 

Deposits

12,139

 

13,861

 

28,401

 

43,468

 

112,826

 

Securities sold under agreements to repurchase

57

 

56

 

77

 

185

 

286

 

FHLB advances and other borrowings

11,129

 

12,094

 

14,116

 

34,730

 

50,080

 

Total interest expense

23,325

 

26,011

 

42,594

 

78,383

 

163,192

 

Net interest income

237,543

 

233,225

 

206,594

 

693,638

 

600,803

 

Provision for credit losses

3,382

 

2,834

 

16,758

 

13,451

 

194,635

 

Net interest income after provision for credit losses

234,161

 

230,391

 

189,836

 

680,187

 

406,168

 

Noninterest income:

 

 

 

 

 

Service charges on deposit accounts

11,435

 

8,906

 

9,854

 

28,648

 

25,796

 

Investment services

9,648

 

8,997

 

6,734

 

26,836

 

21,944

 

Insurance sales commissions

2,557

 

2,406

 

2,284

 

8,188

 

7,755

 

Gains on mortgage loans sold, net

7,814

 

6,700

 

19,453

 

28,180

 

47,655

 

Investment gains on sales, net

 

366

 

651

 

366

 

986

 

Trust fees

5,049

 

5,062

 

3,986

 

14,798

 

12,114

 

Income from equity method investment

30,409

 

32,071

 

26,445

 

91,430

 

59,245

 

Other noninterest income

37,183

 

33,699

 

21,658

 

96,565

 

58,901

 

Total noninterest income

104,095

 

98,207

 

91,065

 

295,011

 

234,396

 

Noninterest expense:

 

 

 

 

 

Salaries and employee benefits

112,406

 

110,824

 

90,103

 

325,958

 

244,470

 

Equipment and occupancy

23,712

 

23,321

 

21,622

 

70,253

 

64,626

 

Other real estate, net

(79

)

(657

)

1,795

 

(749

)

7,098

 

Marketing and other business development

3,325

 

2,652

 

2,321

 

8,326

 

7,714

 

Postage and supplies

2,083

 

2,115

 

1,761

 

6,004

 

5,821

 

Amortization of intangibles

2,088

 

2,167

 

2,417

 

6,461

 

7,416

 

Other noninterest expense

25,316

 

25,718

 

23,833

 

73,434

 

66,005

 

Total noninterest expense

168,851

 

166,140

 

143,852

 

489,687

 

403,150

 

Income before income taxes

169,405

 

162,458

 

137,049

 

485,511

 

237,414

 

Income tax expense

32,828

 

30,668

 

26,404

 

91,716

 

35,969

 

Net income

136,577

 

131,790

 

110,645

 

393,795

 

201,445

 

Preferred stock dividends

(3,798

)

(3,798

)

(3,798

)

(11,394

)

(3,798

)

Net income available to common shareholders

$

132,779

 

$

127,992

 

$

106,847

 

$

382,401

 

$

197,647

 

Per share information:

 

 

 

 

 

Basic net income per common share

$

1.76

 

$

1.70

 

$

1.42

 

$

5.07

 

$

2.62

 

Diluted net income per common share

$

1.75

 

$

1.69

 

$

1.42

 

$

5.05

 

$

2.62

 

Weighted average common shares outstanding:

 

 

 

 

 

Basic

75,494,286

 

75,481,198

 

75,240,664

 

75,449,900

 

75,417,663

 

Diluted

75,836,142

 

75,809,974

 

75,360,033

 

75,760,618

 

75,544,677

 

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

2021

2021

2021

2020

2020

2020

Balance sheet data, at quarter end:

 

 

 

 

 

 

Commercial and industrial loans

$

7,079,431

 

6,771,254

 

6,355,119

 

6,239,588

 

6,144,949

 

6,293,709

 

Commercial real estate - owner occupied loans

2,954,519

 

2,817,689

 

2,869,785

 

2,802,227

 

2,748,075

 

2,708,306

 

Commercial real estate - investment loans

4,597,736

 

4,644,551

 

4,782,712

 

4,565,040

 

4,648,457

 

4,822,537

 

Commercial real estate - multifamily and other loans

621,471

 

724,253

 

790,469

 

638,344

 

571,995

 

561,481

 

Consumer real estate - mortgage loans

3,540,439

 

3,335,537

 

3,086,916

 

3,099,172

 

3,041,019

 

3,042,604

 

Construction and land development loans

3,096,961

 

2,791,611

 

2,568,969

 

2,901,746

 

2,728,439

 

2,574,494

 

Consumer and other loans

459,182

 

440,124

 

411,322

 

379,515

 

343,461

 

294,545

 

Paycheck protection program loans

708,722

 

1,372,916

 

2,221,409

 

1,798,869

 

2,251,014

 

2,222,624

 

Total loans

23,058,461

 

22,897,935

 

23,086,701

 

22,424,501

 

22,477,409

 

22,520,300

 

Allowance for credit losses

(268,635

)

(273,747

)

(280,881

)

(285,050

)

(288,645

)

(285,372

)

Securities

5,623,890

 

5,326,908

 

4,691,364

 

4,615,040

 

4,503,072

 

4,358,313

 

Total assets

36,523,936

 

35,412,309

 

35,299,705

 

34,932,860

 

33,824,931

 

33,342,112

 

Noninterest-bearing deposits

9,809,691

 

8,926,200

 

8,103,943

 

7,392,325

 

7,050,670

 

6,892,864

 

Total deposits

29,369,807

 

28,217,603

 

28,292,940

 

27,705,575

 

26,543,956

 

25,521,829

 

Securities sold under agreements to repurchase

148,240

 

177,661

 

172,117

 

128,164

 

127,059

 

194,553

 

FHLB advances

888,493

 

888,304

 

888,115

 

1,087,927

 

1,287,738

 

1,787,551

 

Subordinated debt and other borrowings

542,712

 

671,994

 

671,002

 

670,575

 

670,273

 

717,043

 

Total stockholders' equity

5,191,798

 

5,101,231

 

4,959,524

 

4,904,611

 

4,787,308

 

4,695,647

 

Balance sheet data, quarterly averages:

 

 

 

 

 

 

Total loans

$

22,986,835

 

23,179,803

 

22,848,086

 

22,524,683

 

22,493,192

 

22,257,168

 

Securities

5,451,232

 

5,036,786

 

4,666,269

 

4,567,872

 

4,420,280

 

4,194,811

 

Federal funds sold and other

3,743,074

 

3,143,078

 

3,356,199

 

3,621,623

 

3,279,248

 

2,618,832

 

Total earning assets

32,181,141

 

31,359,667

 

30,870,554

 

30,714,178

 

30,192,720

 

29,070,811

 

Total assets

35,896,130

 

35,053,772

 

34,659,132

 

34,436,765

 

33,838,716

 

32,785,391

 

Noninterest-bearing deposits

9,247,382

 

8,500,465

 

7,620,665

 

7,322,393

 

6,989,439

 

6,432,010

 

Total deposits

28,739,871

 

28,013,659

 

27,620,784

 

27,193,256

 

26,352,823

 

24,807,032

 

Securities sold under agreements to repurchase

164,837

 

173,268

 

143,586

 

121,331

 

147,211

 

191,084

 

FHLB advances

888,369

 

888,184

 

934,662

 

1,250,848

 

1,515,879

 

2,213,769

 

Subordinated debt and other borrowings

586,387

 

674,162

 

673,662

 

673,419

 

715,138

 

706,657

 

Total stockholders' equity

5,176,625

 

5,039,608

 

4,953,656

 

4,852,373

 

4,765,864

 

4,499,438

 

Statement of operations data, for the three months ended:

Interest income

$

260,868

 

259,236

 

251,917

 

257,047

 

249,188

 

251,738

 

Interest expense

23,325

 

26,011

 

29,047

 

36,062

 

42,594

 

51,081

 

Net interest income

237,543

 

233,225

 

222,870

 

220,985

 

206,594

 

200,657

 

Provision for credit losses

3,382

 

2,834

 

7,235

 

9,180

 

16,758

 

72,832

 

Net interest income after provision for credit losses

234,161

 

230,391

 

215,635

 

211,805

 

189,836

 

127,825

 

Noninterest income

104,095

 

98,207

 

92,709

 

83,444

 

91,065

 

72,954

 

Noninterest expense

168,851

 

166,140

 

154,696

 

161,305

 

143,852

 

127,105

 

Income before taxes

169,405

 

162,458

 

153,648

 

133,944

 

137,049

 

73,674

 

Income tax expense

32,828

 

30,668

 

28,220

 

23,068

 

26,404

 

11,230

 

Net income

136,577

 

131,790

 

125,428

 

110,876

 

110,645

 

62,444

 

Preferred stock dividends

(3,798

)

(3,798

)

(3,798

)

(3,798

)

(3,798

)

 

Net income available to common shareholders

$

132,779

 

127,992

 

121,630

 

107,078

 

106,847

 

62,444

 

Profitability and other ratios:

 

 

 

 

 

 

Return on avg. assets (1)

1.47

%

1.46

%

1.42

%

1.24

%

1.26

%

0.77

%

Return on avg. equity (1)

10.18

%

10.19

%

9.96

%

8.78

%

8.92

%

5.58

%

Return on avg. common equity (1)

10.62

%

10.65

%

10.41

%

9.19

%

9.35

%

5.66

%

Return on avg. tangible common equity (1)

16.98

%

17.32

%

17.16

%

15.37

%

15.85

%

9.77

%

Common stock dividend payout ratio (16)

11.13

%

11.73

%

13.69

%

15.84

%

16.49

%

16.41

%

Net interest margin (2)

3.03

%

3.08

%

3.02

%

2.97

%

2.82

%

2.87

%

Noninterest income to total revenue (3)

30.47

%

29.63

%

29.38

%

27.41

%

30.59

%

26.66

%

Noninterest income to avg. assets (1)

1.15

%

1.12

%

1.08

%

0.96

%

1.07

%

0.89

%

Noninterest exp. to avg. assets (1)

1.87

%

1.90

%

1.81

%

1.86

%

1.69

%

1.56

%

Efficiency ratio (4)

49.42

%

50.13

%

49.02

%

52.99

%

48.33

%

46.45

%

Avg. loans to avg. deposits

79.98

%

82.74

%

82.72

%

82.83

%

85.35

%

89.72

%

Securities to total assets

15.40

%

15.04

%

13.29

%

13.21

%

13.31

%

13.07

%

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, 2021

 

September 30, 2020

 

Average
Balances

Interest

Rates/ Yields

 

Average
Balances

Interest

Rates/ Yields

Interest-earning assets

 

 

 

 

 

 

 

Loans (1) (2)

$

22,986,835

 

$

233,857

 

4.13

%

 

$

22,493,192

 

$

224,482

 

4.04

%

Securities

 

 

 

 

 

 

 

Taxable

2,868,212

 

8,986

 

1.24

%

 

2,226,008

 

8,276

 

1.48

%

Tax-exempt (2)

2,583,020

 

15,873

 

2.93

%

 

2,194,272

 

15,001

 

3.29

%

Federal funds sold and other

3,743,074

 

2,152

 

0.23

%

 

3,279,248

 

1,429

 

0.17

%

Total interest-earning assets

32,181,141

 

$

260,868

 

3.32

%

 

30,192,720

 

$

249,188

 

3.38

%

Nonearning assets

 

 

 

 

 

 

 

Intangible assets

1,857,039

 

 

 

 

1,866,082

 

 

 

Other nonearning assets

1,857,950

 

 

 

 

1,779,914

 

 

 

Total assets

$

35,896,130

 

 

 

 

$

33,838,716

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

Interest checking

5,591,119

 

2,453

 

0.17

%

 

4,784,627

 

3,733

 

0.31

%

Savings and money market

11,359,595

 

5,300

 

0.19

%

 

10,312,876

 

8,374

 

0.32

%

Time

2,541,775

 

4,386

 

0.68

%

 

4,265,881

 

16,294

 

1.52

%

Total interest-bearing deposits

19,492,489

 

12,139

 

0.25

%

 

19,363,384

 

28,401

 

0.58

%

Securities sold under agreements to repurchase

164,837

 

57

 

0.14

%

 

147,211

 

77

 

0.21

%

Federal Home Loan Bank advances

888,369

 

4,558

 

2.04

%

 

1,515,879

 

6,945

 

1.82

%

Subordinated debt and other borrowings

586,387

 

6,571

 

4.45

%

 

715,138

 

7,171

 

3.99

%

Total interest-bearing liabilities

21,132,082

 

23,325

 

0.44

%

 

21,741,612

 

42,594

 

0.78

%

Noninterest-bearing deposits

9,247,382

 

 

 

 

6,989,439

 

 

 

Total deposits and interest-bearing liabilities

30,379,464

 

$

23,325

 

0.30

%

 

28,731,051

 

$

42,594

 

0.59

%

Other liabilities

340,041

 

 

 

 

341,801

 

 

 

Stockholders' equity

5,176,625

 

 

 

 

4,765,864

 

 

 

Total liabilities and stockholders' equity

$

35,896,130

 

 

 

 

$

33,838,716

 

 

 

Net interest income

 

$

237,543

 

 

 

 

$

206,594

 

 

Net interest spread (3)

 

 

2.88

%

 

 

 

2.60

%

Net interest margin (4)

 

 

3.03

%

 

 

 

2.82

%

 

 

 

 

 

 

 

 

(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 $8.5 million of taxable equivalent income for the three months ended Sept. 30, 2021 compared to $7.3 million for the three months ended Sept. 30, 2020. 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 Sept. 30, 2021 would have been 3.02% compared to a net interest spread of 2.79% for the three months ended Sept. 30, 2020.

(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, 2021

 

September 30, 2020

 

Average
Balances

Interest

Rates/ Yields

 

Average
Balances

Interest

Rates/ Yields

Interest-earning assets

 

 

 

 

 

 

 

Loans (1) (2)

$

23,005,416

 

$

694,017

 

4.11

%

 

$

21,589,858

 

$

687,183

 

4.33

%

Securities

 

 

 

 

 

 

 

Taxable

2,575,720

 

25,073

 

1.30

%

 

2,103,023

 

28,133

 

1.79

%

Tax-exempt (2)

2,478,584

 

47,917

 

3.11

%

 

2,041,199

 

43,421

 

3.41

%

Federal funds sold and other

3,415,534

 

5,014

 

0.20

%

 

2,239,102

 

5,258

 

0.31

%

Total interest-earning assets

31,475,254

 

$

772,021

 

3.38

%

 

27,973,182

 

$

763,995

 

3.75

%

Nonearning assets

 

 

 

 

 

 

 

Intangible assets

1,859,183

 

 

 

 

1,868,118

 

 

 

Other nonearning assets

1,873,106

 

 

 

 

1,787,377

 

 

 

Total assets

$

35,207,543

 

 

 

 

$

31,628,677

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

Interest checking

5,504,133

 

7,460

 

0.18

%

 

4,391,319

 

16,456

 

0.50

%

Savings and money market

11,323,160

 

17,670

 

0.21

%

 

9,201,302

 

37,713

 

0.55

%

Time

2,839,449

 

18,338

 

0.86

%

 

4,298,814

 

58,657

 

1.82

%

Total interest-bearing deposits

19,666,742

 

43,468

 

0.30

%

 

17,891,435

 

112,826

 

0.84

%

Securities sold under agreements to repurchase

160,641

 

185

 

0.15

%

 

159,783

 

286

 

0.24

%

Federal Home Loan Bank advances

903,569

 

13,553

 

2.01

%

 

1,918,371

 

26,854

 

1.87

%

Subordinated debt and other borrowings

644,417

 

21,177

 

4.39

%

 

698,464

 

23,226

 

4.44

%

Total interest-bearing liabilities

21,375,369

 

78,383

 

0.49

%

 

20,668,053

 

163,192

 

1.05

%

Noninterest-bearing deposits

8,462,129

 

 

 

 

6,063,783

 

 

 

Total deposits and interest-bearing liabilities

29,837,498

 

$

78,383

 

0.35

%

 

26,731,836

 

$

163,192

 

0.82

%

Other liabilities

312,598

 

 

 

 

335,274

 

 

 

Stockholders' equity

5,057,447

 

 

 

 

4,561,567

 

 

 

Total liabilities and stockholders' equity

$

35,207,543

 

 

 

 

$

31,628,677

 

 

 

Net interest income

 

$

693,638

 

 

 

 

$

600,803

 

 

Net interest spread (3)

 

 

2.89

%

 

 

 

2.70

%

Net interest margin (4)

 

 

3.05

%

 

 

 

2.97

%

 

 

 

 

 

 

 

 

(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 $23.7 million of taxable equivalent income for the nine months ended Sept. 30, 2021 compared to $21.3 million for the nine months ended Sept. 30, 2020. 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 Sept. 30, 2021 would have been 3.03% compared to a net interest spread of 2.93% for the nine months ended Sept. 30, 2020.

(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

2021

2021

2021

2020

2020

2020

Asset quality information and ratios:

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

Nonaccrual loans

$

46,692

 

53,105

 

72,135

 

73,836

 

71,390

 

62,562

 

ORE and other nonperforming assets (NPAs)

8,415

 

9,602

 

10,651

 

12,360

 

19,445

 

22,105

 

Total nonperforming assets

$

55,107

 

62,707

 

82,786

 

86,196

 

90,835

 

84,667

 

Past due loans over 90 days and still accruing interest

$

1,914

 

1,810

 

2,833

 

2,362

 

1,313

 

1,982

 

Accruing troubled debt restructurings (5)

$

2,397

 

2,428

 

2,460

 

2,494

 

2,588

 

3,274

 

Accruing purchase credit deteriorated loans

$

12,158

 

12,400

 

13,904

 

14,091

 

14,346

 

14,616

 

Net loan charge-offs

$

9,281

 

9,968

 

11,397

 

10,775

 

13,057

 

5,384

 

Allowance for credit losses to nonaccrual loans

575.3

%

515.5

%

389.4

%

386.1

%

404.3

%

456.1

%

As a percentage of total loans:

 

 

 

 

 

 

Past due accruing loans over 30 days

0.09

%

0.07

%

0.09

%

0.19

%

0.11

%

0.09

%

Potential problem loans (6)

0.60

%

0.74

%

0.70

%

0.77

%

0.96

%

1.12

%

Allowance for credit losses (20)

1.17

%

1.20

%

1.22

%

1.27

%

1.28

%

1.27

%

Nonperforming assets to total loans, ORE and other NPAs

0.24

%

0.27

%

0.36

%

0.38

%

0.40

%

0.38

%

Classified asset ratio (Pinnacle Bank) (8)

5.6

%

6.8

%

7.3

%

8.1

%

9.9

%

11.2

%

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

0.16

%

0.17

%

0.20

%

0.19

%

0.23

%

0.10

%

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

46.0

46.1

45.2

45.1

45.2

45.1

 

 

 

 

 

 

 

Interest rates and yields:

 

 

 

 

 

 

Loans

4.13

%

4.11

%

4.11

%

4.20

%

4.04

%

4.16

%

Securities

2.04

%

2.25

%

2.29

%

2.27

%

2.38

%

2.59

%

Total earning assets

3.32

%

3.42

%

3.41

%

3.44

%

3.38

%

3.58

%

Total deposits, including non-interest bearing

0.17

%

0.20

%

0.26

%

0.33

%

0.43

%

0.55

%

Securities sold under agreements to repurchase

0.14

%

0.13

%

0.20

%

0.21

%

0.21

%

0.20

%

FHLB advances

2.04

%

2.03

%

1.95

%

2.00

%

1.82

%

1.73

%

Subordinated debt and other borrowings

4.45

%

4.52

%

4.22

%

4.13

%

3.99

%

4.42

%

Total deposits and interest-bearing liabilities

0.30

%

0.35

%

0.40

%

0.49

%

0.59

%

0.74

%

 

 

 

 

 

 

 

Capital and other ratios (8):

 

 

 

 

 

 

Pinnacle Financial ratios:

 

 

 

 

 

 

Stockholders' equity to total assets

14.2

%

14.4

%

14.0

%

14.0

%

14.2

%

14.1

%

Common equity Tier one

10.5

%

10.5

%

10.3

%

10.0

%

9.9

%

9.6

%

Tier one risk-based

11.3

%

11.3

%

11.2

%

10.9

%

10.7

%

10.4

%

Total risk-based

14.0

%

14.5

%

14.5

%

14.3

%

14.2

%

14.0

%

Leverage

9.3

%

9.2

%

8.9

%

8.6

%

8.5

%

8.4

%

Tangible common equity to tangible assets

9.0

%

9.0

%

8.6

%

8.5

%

8.5

%

8.3

%

Pinnacle Bank ratios:

 

 

 

 

 

 

Common equity Tier one

11.7

%

11.9

%

11.8

%

11.4

%

11.3

%

11.0

%

Tier one risk-based

11.7

%

11.9

%

11.8

%

11.4

%

11.3

%

11.0

%

Total risk-based

12.5

%

13.1

%

13.0

%

12.7

%

12.6

%

12.4

%

Leverage

9.7

%

9.6

%

9.4

%

9.1

%

8.9

%

8.9

%

Construction and land development loans

as a percentage of total capital (19)

89.3

%

80.1

%

76.0

%

89.0

%

86.7

%

83.6

%

Non-owner occupied commercial real estate and

multi-family as a percentage of total capital (19)

252.4

%

248.8

%

256.0

%

264.0

%

268.8

%

275.0

%

 

 

 

 

 

 

 

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)

September

June

March

December

September

June

2021

2021

2021

2020

2020

2020

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

Earnings per common share – basic

$

1.76

 

1.70

 

1.61

 

1.42

 

1.42

 

0.83

 

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

$

1.76

 

1.69

 

1.61

 

1.58

 

1.45

 

0.89

 

Earnings per common share – diluted

$

1.75

 

1.69

 

1.61

 

1.42

 

1.42

 

0.83

 

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

$

1.75

 

1.68

 

1.61

 

1.58

 

1.45

 

0.89

 

Common dividends per share

$

0.18

 

0.18

 

0.18

 

0.16

 

0.16

 

0.16

 

Book value per common share at quarter end (9)

$

65.36

 

64.19

 

62.33

 

61.80

 

60.26

 

59.05

 

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

$

40.98

 

39.77

 

37.88

 

37.25

 

35.68

 

34.43

 

Revenue per diluted common share

$

4.50

 

4.37

 

4.17

 

4.03

 

3.95

 

3.63

 

Revenue per diluted common share, excluding non-GAAP adjustments

$

4.50

 

4.37

 

4.17

 

4.03

 

3.94

 

3.63

 

 

 

 

 

 

 

 

 

Investor information:

 

 

 

 

 

 

 

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

$

94.08

 

88.29

 

88.66

 

64.40

 

35.59

 

41.99

 

High closing sales price of common stock during quarter

$

98.00

 

92.94

 

93.58

 

65.51

 

44.47

 

48.98

 

Low closing sales price of common stock during quarter

$

83.84

 

84.25

 

63.48

 

35.97

 

33.28

 

33.24

 

 

 

 

 

 

 

 

 

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

$

28.14

 

29.13

 

27.62

 

27.69

 

26.49

 

25.98

 

High closing sales price of depositary shares during quarter

$

29.23

 

29.13

 

27.83

 

27.94

 

26.82

 

26.05

 

Low closing sales price of depositary shares during quarter

$

28.00

 

27.38

 

26.83

 

26.45

 

25.51

 

25.19

 

 

 

 

 

 

 

 

 

Other information:

 

 

 

 

 

 

 

Residential mortgage loan sales:

 

 

 

 

 

 

 

Gross loans sold

$

347,664

 

394,299

 

546,963

 

479,867

 

511,969

 

550,704

 

Gross fees (10)

$

11,215

 

15,552

 

18,793

 

23,729

 

23,557

 

16,381

 

Gross fees as a percentage of loans originated

 

3.23

%

3.94

%

3.44

%

4.94

%

4.60

%

2.97

%

Net gain on residential mortgage loans sold

$

7,814

 

6,700

 

13,666

 

12,387

 

19,453

 

19,619

 

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

$

 

366

 

 

 

651

 

(128)

 

Brokerage account assets, at quarter end (11)

$

6,597,152

 

6,344,416

 

5,974,884

 

5,509,560

 

4,866,726

 

4,499,856

 

Trust account managed assets, at quarter end

$

4,155,510

 

3,640,932

 

3,443,373

 

3,295,198

 

2,978,035

 

2,908,131

 

Core deposits (12)

$

27,170,367

 

25,857,639

 

24,971,177

 

23,510,883

 

22,003,989

 

21,391,794

 

Core deposits to total funding (12)

 

87.8

%

86.3

%

83.1

%

79.5

%

76.9

%

75.8

%

Risk-weighted assets

$

27,945,624

 

26,819,277

 

26,105,158

 

25,791,896

 

25,189,944

 

24,937,535

 

Number of offices

 

117

 

116

 

115

 

114

 

114

 

113

 

Total core deposits per office

$

232,225

 

222,911

 

217,141

 

206,236

 

193,017

 

189,308

 

Total assets per full-time equivalent employee

$

13,188

 

13,087

 

13,468

 

13,262

 

13,027

 

12,936

 

Annualized revenues per full-time equivalent employee

$

489.4

 

491.3

 

488.3

 

459.8

 

456.1

 

426.9

 

Annualized expenses per full-time equivalent employee

$

241.9

 

246.3

 

239.4

 

246.6

 

221.1

 

205.4

 

Number of employees (full-time equivalent)

 

2,769.5

 

2,706.0

 

2,621.0

 

2,634.0

 

2,596.5

 

2,577.5

 

Associate retention rate (13)

 

93.4

%

93.3

%

94.4

%

94.8

%

94.4

%

94.5

%

 

 

 

 

 

 

 

 

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

2021

2021

2020

 

2021

2020

 

 

 

 

 

 

 

Net interest income

$

237,543

 

233,225

 

206,594

 

 

693,638

 

600,803

 

 

 

 

 

 

 

 

Noninterest income

104,095

 

98,207

 

91,065

 

 

295,011

 

234,396

 

Total revenues

341,638

 

331,432

 

297,659

 

 

988,649

 

835,199

 

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

 

(366

)

(651

)

 

(366

)

(986

)

Total revenues excluding the impact of adjustments noted above

$

341,638

 

331,066

 

297,008

 

 

988,283

 

834,213

 

 

 

 

 

 

 

 

Noninterest expense

$

168,851

 

166,140

 

143,852

 

 

489,687

 

403,150

 

Less: ORE expense

(79

)

(657

)

1,795

 

 

(749

)

7,098

 

FHLB restructuring charges

 

 

1,991

 

 

 

4,861

 

Noninterest expense excluding the impact of adjustments noted above

$

168,930

 

166,797

 

140,066

 

 

490,436

 

391,191

 

 

 

 

 

 

 

 

Pre-tax income

$

169,405

 

162,458

 

137,049

 

 

485,511

 

237,414

 

Provision for credit losses

3,382

 

2,834

 

16,758

 

 

13,451

 

194,635

 

Pre-tax pre-provision net revenue

172,787

 

165,292

 

153,807

 

 

498,962

 

432,049

 

Adjustments noted above

(79

)

(1,023

)

3,135

 

 

(1,115

)

10,973

 

Adjusted pre-tax pre-provision net revenue (14)

$

172,708

 

164,269

 

156,942

 

 

497,847

 

443,022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

$

104,095

 

98,207

 

91,065

 

 

295,011

 

234,396

 

Less: Adjustments as noted above

 

(366

)

(651

)

 

(366

)

(986

)

Noninterest income excluding the impact of adjustments noted above

$

104,095

 

97,841

 

90,414

 

 

294,645

 

233,410

 

 

 

 

 

 

 

 

Efficiency ratio (4)

49.42

%

50.13

%

48.33

%

 

49.53

%

48.27

%

Adjustments as noted above

0.03

%

0.25

%

(1.17

)%

 

0.10

%

(1.38

)%

Efficiency ratio (excluding adjustments noted above) (4)

49.45

%

50.38

%

47.16

%

 

49.63

%

46.89

%

 

 

 

 

 

 

 

Total average assets

$

35,896,130

 

35,053,772

 

33,838,716

 

 

35,207,543

 

31,628,677

 

 

 

 

 

 

 

 

Noninterest income to average assets (1)

1.15

%

1.12

%

1.07

%

 

1.12

%

0.99

%

Adjustments as noted above

%

%

(0.01

)%

 

%

%

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

1.15

%

1.12

%

1.06

%

 

1.12

%

0.99

%

 

 

 

 

 

 

 

Noninterest expense to average assets (1)

1.87

%

1.90

%

1.69

%

 

1.86

%

1.70

%

Adjustments as noted above

%

0.01

%

(0.04

)%

 

%

(0.05

)%

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

1.87

%

1.91

%

1.65

%

 

1.86

%

1.65

%

 

 

 

 

 

 

 

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

2021

2021

2021

2020

2020

2020

Net income available to common shareholders

$

132,779

 

127,992

 

121,630

 

107,078

 

106,847

 

62,444

 

Investment (gains) losses on sales of securities, net

 

(366

)

 

 

(651

)

128

 

ORE expense

(79

)

(657

)

(13

)

1,457

 

1,795

 

2,888

 

FHLB restructuring charges

 

 

 

10,307

 

1,991

 

2,870

 

Hedge termination charges

 

 

 

4,673

 

 

 

Tax effect on adjustments noted above (18)

21

 

267

 

3

 

(4,297

)

(819

)

(1,539

)

Net income available to common shareholders excluding adjustments noted above

$

132,721

 

127,236

 

121,620

 

119,218

 

109,163

 

66,791

 

 

 

 

 

 

 

 

Basic earnings per common share

$

1.76

 

1.70

 

1.61

 

1.42

 

1.42

 

0.83

 

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

 

 

 

 

(0.01

)

 

Adjustment due to ORE expense

 

(0.01

)

 

0.02

 

0.02

 

0.04

 

Adjustment due to FHLB restructuring charges

 

 

 

0.14

 

0.03

 

0.04

 

Adjustment due to hedge termination charges

 

 

 

0.06

 

 

 

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

 

 

 

(0.06

)

(0.01

)

(0.02

)

Basic earnings per common share excluding adjustments noted above

$

1.76

 

1.69

 

1.61

 

1.58

 

1.45

 

0.89

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

1.75

 

1.69

 

1.61

 

1.42

 

1.42

 

0.83

 

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

 

 

 

 

(0.01

)

 

Adjustment due to ORE expense

 

(0.01

)

 

0.02

 

0.02

 

0.04

 

Adjustment due to FHLB restructuring charges

 

 

 

0.14

 

0.03

 

0.04

 

Adjustment due to hedge termination charges

 

 

 

0.06

 

 

 

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

 

 

 

(0.06

)

(0.01

)

(0.02

)

Diluted earnings per common share excluding the adjustments noted above

$

1.75

 

1.68

 

1.61

 

1.58

 

1.45

 

0.89

 

 

 

 

 

 

 

 

Revenue per diluted common share

$

4.50

 

4.37

 

4.17

 

4.03

 

3.95

 

3.63

 

Adjustments as noted above

 

 

 

 

(0.01

)

 

Revenue per diluted common share excluding adjustments noted above

$

4.50

 

4.37

 

4.17

 

4.03

 

3.94

 

3.63

 

 

 

 

 

 

 

 

Book value per common share at quarter end (9)

$

65.36

 

64.19

 

62.33

 

61.80

 

60.26

 

59.05

 

Adjustment due to goodwill, core deposit and other intangible assets

(24.38

)

(24.42

)

(24.45

)

(24.55

)

(24.59

)

(24.62

)

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

$

40.98

 

39.77

 

37.88

 

37.25

 

35.68

 

34.43

 

 

 

 

 

 

 

 

Equity method investment (17)

 

 

 

 

 

 

Fee income from BHG, net of amortization

$

30,409

 

32,071

 

28,950

 

24,294

 

26,445

 

17,208

 

Funding cost to support investment

379

 

1,230

 

1,205

 

1,222

 

1,231

 

2,134

 

Pre-tax impact of BHG

30,030

 

30,841

 

27,745

 

23,072

 

25,214

 

15,074

 

Income tax expense at statutory rates (18)

7,850

 

8,062

 

7,253

 

6,031

 

6,591

 

3,940

 

Earnings attributable to BHG

$

22,180

 

22,779

 

20,492

 

17,041

 

18,623

 

11,134

 

 

 

 

 

 

 

 

Basic earnings per common share attributable to BHG

$

0.29

 

0.30

 

0.27

 

0.23

 

0.25

 

0.15

 

Diluted earnings per common share attributable to BHG

$

0.29

 

0.30

 

0.27

 

0.23

 

0.25

 

0.15

 

 

 

 

 

 

 

 

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

 

 

 

RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

 

 

 

 

Nine months ended

(dollars in thousands, except per share data)

 

September

 

2021

2020

Net income available to common shareholders

 

$

382,401

 

197,647

 

Investment (gains) losses on sales of securities, net

 

(366

)

(986

)

ORE expense

 

(749

)

7,098

 

FHLB restructuring charges

 

 

4,861

 

Tax effect on adjustments noted above (18)

 

291

 

(2,868

)

Net income available to common shareholders excluding adjustments noted above

 

$

381,577

 

205,752

 

 

 

 

 

Basic earnings per common share

 

$

5.07

 

2.62

 

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

 

 

(0.01

)

Adjustment due to ORE expense

 

(0.01

)

0.09

 

Adjustment due to FHLB restructuring charges

 

 

0.06

 

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

 

 

(0.04

)

Basic earnings per common share excluding adjustments noted above

 

$

5.06

 

2.72

 

 

 

 

 

Diluted earnings per common share

 

5.05

 

2.62

 

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

 

 

(0.01

)

Adjustment due to ORE expense

 

(0.01

)

0.09

 

Adjustment due to FHLB restructuring charges

 

 

0.06

 

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

 

 

(0.04

)

Diluted earnings per common share excluding the adjustments noted above

 

$

5.04

 

2.72

 

 

 

 

 

Revenue per diluted common share

 

$

13.05

 

11.06

 

Adjustments as noted above

 

(0.01

)

(0.02

)

Revenue per diluted common share excluding adjustments noted above

 

$

13.04

 

11.04

 

 

 

 

 

Equity method investment (17)

 

 

 

Fee income from BHG, net of amortization

 

$

91,430

 

59,245

 

Funding cost to support investment

 

2,814

 

5,487

 

Pre-tax impact of BHG

 

88,616

 

53,758

 

Income tax expense at statutory rates (18)

 

23,164

 

14,052

 

Earnings attributable to BHG

 

$

65,452

 

39,706

 

 

 

 

 

Basic earnings per common share attributable to BHG

 

$

0.87

 

0.53

 

Diluted earnings per common share attributable to BHG

 

$

0.86

 

0.53

 

 

 

 

 

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

2021

2021

2020

 

2021

2020

 

 

 

 

 

 

 

Return on average assets (1)

1.47

%

1.46

%

1.26

%

 

1.45

%

0.83

%

Adjustments as noted above

%

%

0.02

%

 

%

0.04

%

Return on average assets excluding adjustments noted above (1)

1.47

%

1.46

%

1.28

%

 

1.45

%

0.87

%

 

 

 

 

 

 

 

Tangible assets:

 

 

 

 

 

 

Total assets

$

36,523,936

 

35,412,309

 

33,824,931

 

 

$

36,523,936

 

33,824,931

 

Less: Goodwill

(1,819,811

)

(1,819,811

)

(1,819,811

)

 

(1,819,811

)

(1,819,811

)

Core deposit and other intangible assets

(35,876

)

(37,963

)

(44,713

)

 

(35,876

)

(44,713

)

Net tangible assets

$

34,668,249

 

33,554,535

 

31,960,407

 

 

$

34,668,249

 

31,960,407

 

 

 

 

 

 

 

 

Tangible common equity:

 

 

 

 

 

 

Total stockholders' equity

$

5,191,798

 

5,101,231

 

4,787,308

 

 

$

5,191,798

 

4,787,308

 

Less: Preferred stockholders' equity

(217,126

)

(217,126

)

(217,126

)

 

(217,126

)

(217,126

)

Total common stockholders' equity

4,974,672

 

4,884,105

 

4,570,182

 

 

4,974,672

 

4,570,182

 

Less: Goodwill

(1,819,811

)

(1,819,811

)

(1,819,811

)

 

(1,819,811

)

(1,819,811

)

Core deposit and other intangible assets

(35,876

)

(37,963

)

(44,713

)

 

(35,876

)

(44,713

)

Net tangible common equity

$

3,118,985

 

3,026,331

 

2,705,658

 

 

$

3,118,985

 

2,705,658

 

 

 

 

 

 

 

 

Ratio of tangible common equity to tangible assets

9.00

%

9.02

%

8.47

%

 

9.00

%

8.47

%

 

 

 

 

 

 

 

Average tangible assets:

 

 

 

 

 

 

Average assets

$

35,896,130

 

35,053,772

 

33,838,716

 

 

$

35,207,543

 

31,628,677

 

Less: Average goodwill

(1,819,811

)

(1,819,811

)

(1,819,811

)

 

(1,819,811

)

(1,819,811

)

Average core deposit and other intangible assets

(37,228

)

(39,360

)

(46,272

)

 

(39,372

)

(48,308

)

Net average tangible assets

$

34,039,091

 

33,194,601

 

31,972,633

 

 

$

33,348,360

 

29,760,558

 

 

 

 

 

 

 

 

Return on average assets (1)

1.47

%

1.46

%

1.26

%

 

1.45

%

0.83

%

Adjustment due to goodwill, core deposit and other intangible assets

0.08

%

0.09

%

0.07

%

 

0.08

%

0.06

%

Return on average tangible assets (1)

1.55

%

1.55

%

1.33

%

 

1.53

%

0.89

%

Adjustments as noted above

%

(0.01

)%

0.03

%

 

%

0.03

%

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

1.55

%

1.54

%

1.36

%

 

1.53

%

0.92

%

 

 

 

 

 

 

 

Average tangible common equity:

 

 

 

 

 

 

Average stockholders' equity

$

5,176,625

 

5,039,608

 

4,765,864

 

 

$

5,057,447

 

4,561,567

 

Less: Average preferred equity

(217,126

)

(217,126

)

(217,535

)

 

(217,126

)

(92,831

)

Average common equity

4,959,499

 

4,822,482

 

4,548,329

 

 

4,840,321

 

4,468,736

 

Less: Average goodwill

(1,819,811

)

(1,819,811

)

(1,819,811

)

 

(1,819,811

)

(1,819,811

)

Average core deposit and other intangible assets

(37,228

)

(39,360

)

(46,272

)

 

(39,372

)

(48,308

)

Net average tangible common equity

$

3,102,460

 

2,963,311

 

2,682,246

 

 

$

2,981,138

 

2,600,617

 

 

 

 

 

 

 

 

Return on average equity (1)

10.18

%

10.19

%

8.92

%

 

10.11

%

5.79

%

Adjustment due to average preferred stockholders' equity

0.44

%

0.46

%

0.43

%

 

0.45

%

0.12

%

Return on average common equity (1)

10.62

%

10.65

%

9.35

%

 

10.56

%

5.91

%

Adjustment due to goodwill, core deposit and other intangible assets

6.36

%

6.67

%

6.50

%

 

6.59

%

4.24

%

Return on average tangible common equity (1)

16.98

%

17.32

%

15.85

%

 

17.15

%

10.15

%

Adjustments as noted above

(0.01

)%

(0.10

)%

0.34

%

 

(0.04

)%

0.42

%

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

16.97

%

17.22

%

16.19

%

 

17.11

%

10.57

%

 

 

 

 

 

 

 

Allowance for credit losses on loans as a percent of total loans

1.17

%

1.20

%

1.28

%

 

1.17

%

1.28

%

Impact of excluding PPP loans from total loans

0.03

%

0.07

%

0.15

%

 

0.03

%

0.15

%

Allowance as adjusted for the above exclusion of PPP loans from total loans

1.20

%

1.27

%

1.43

%

 

1.20

%

1.43

%

 

 

 

 

 

 

 

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

 

 

 

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

1. Ratios are presented on an annualized basis.

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

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

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

5. Troubled debt restructurings include loans where the Company, as a result of the borrower's financial difficulties, has granted a credit concession to the borrower (i.e., interest only payments for a significant period of time, extending the maturity of the loan, etc.). All of these loans continue to accrue interest at the contractual rate. Troubled debt restructurings do not include, beginning with the quarter ended March 31, 2020, loans for which the Company has granted a deferral of interest and/or principal or other modification pursuant to the guidance issued by the FDIC providing for relief under the Coronavirus Aid, Relief and Economic Security Act.

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

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

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

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

Tangible common equity to tangible assets - End of period total stockholders' equity less end of period 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.

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

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

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

12. Core deposits include all transaction deposit accounts, money market and savings accounts and all certificates of deposit issued in a denomination of less than $250,000. The ratio noted above represents total core deposits divided by total funding, which includes total deposits, FHLB advances, securities sold under agreements to repurchase, subordinated indebtedness and all other interest-bearing liabilities.

13. Associate retention rate is computed by dividing the number of associates employed at quarter end less the number of associates that have resigned in the last 12 months by the number of associates employed at quarter end. Associate retention rate does not include associates at acquired institutions displaced by merger.

14. Adjusted pre-tax, pre-provision net revenue excludes the impact of ORE expenses and income, investment gains and losses on sales of securities, FHLB restructuring charges and hedge termination charges.

15. Represents investment gains (losses) on sales and impairments, net occurring as a result of gains or losses incurred as the result of a change in management's intention to sell a bond prior to the recovery of its amortized cost basis.

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

17. Earnings from equity method investment includes the impact of the issuance of subordinated debt as well as the funding costs of the overall franchise. Income tax expense is calculated using statutory tax rates.

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

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

20. Effective January 1, 2020 Pinnacle Financial adopted the current expected credit loss accounting standard which requires the recognition of all losses expected to be recorded over a loan's life.

pnfp-earnings


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Financials (USD)
Sales 2021 1 340 M - -
Net income 2021 501 M - -
Net Debt 2021 - - -
P/E ratio 2021 14,7x
Yield 2021 0,74%
Capitalization 7 331 M 7 331 M -
Capi. / Sales 2021 5,47x
Capi. / Sales 2022 5,21x
Nbr of Employees 2 770
Free-Float 97,6%
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Pinnacle Financial Partners, Inc. Technical Analysis Chart | PNFP | US72346Q1040 | MarketScreener
Technical analysis trends PINNACLE FINANCIAL PARTNERS, INC.
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TrendsBearishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 11
Last Close Price 97,06 $
Average target price 116,60 $
Spread / Average Target 20,1%
EPS Revisions
Managers and Directors
M. Terry Turner President, Chief Executive Officer & Director
Harold R. Carpenter Chief Financial Officer
Robert A. McCabe Chairman
Randy Withrow Chief Information Officer & Senior Vice President
Mary Schneider Chief Compliance Officer