PNFP Reports Diluted EPS of $1.65, ROAA of 1.32% and ROATCE of 15.63% For 1Q2022

Company Release - 4/18/2022 5:27 PM ET

Annualized linked-quarter loan growth of 18.5% for 1Q2022, 22.5% exclusive of PPP paydowns

NASHVILLE, Tenn.--(BUSINESS WIRE)-- Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.65 for the quarter ended March 31, 2022, compared to net income per diluted common share of $1.61 for the quarter ended March 31, 2021, an increase of approximately 2.5 percent. Items significantly impacting the comparability between the two periods were:

  • PPP income in the first quarter of 2022 was $10.8 million, compared to $23.0 million in the first quarter of 2021. PPP loans at March 31, 2022 were $157.2 million, down from $371.1 million at Dec. 31, 2021 and $2.2 billion at March 31, 2021.
  • Income from the firm’s sale of residential mortgage loans amounted to $4.1 million during the first quarter of 2022, compared to $13.7 million during the first quarter of 2021.
  • On March 1, 2022, Pinnacle Bank acquired the remaining equity of JB&B Capital, LLC ("JB&B"), a commercial equipment leasing business in Knoxville, TN, in a cash transaction. Pinnacle had previously acquired 20 percent of JB&B's equity in 2017. As a result of the acquisition of JB&B, first quarter 2022 net income per diluted common share increased by $0.04 per share, which includes approximately $5.5 million of gains resulting from remeasurement of the previous investment offset in part by approximately $1.0 million of provision for credit losses recorded in accordance with CECL for the outstanding leases at JB&B. Lease balances attributable to the JB&B acquisition approximated $60.7 million at March 31, 2022.

"In our view, the economic landscape remains fragile," said M. Terry Turner, Pinnacle's president and chief executive officer. "Russia's invasion of Ukraine and the various economic sanctions enacted in response are likely to continue to weigh on our economy. The full impact of the ongoing supply chain issues, inflation, inverted yield curves and a potential recession are as yet unknown. Our response thus far has been to seek to protect tangible book value, to initiate a number of targeted loan portfolio reviews, including our COVID-impacted and commercial real estate portfolios, and to heighten our diligence on cybersecurity and fraud detection.

"Despite the uncertain economic environment, we are pleased with our first quarter performance and remain optimistic for 2022," Turner said. "As a result of our prolific hiring over the last few years, we had anticipated rapid loan growth this year based primarily on market share movement as the new revenue producers continue to consolidate their clients from their previous employers to us. Not only are we realizing outsized loan growth in our legacy Tennessee, Carolinas and Virginia markets, but we are also having great success in our market extensions to Atlanta, Washington, D.C., Birmingham, and Huntsville. The prolific hiring continued during the first quarter with 28 additional revenue producers. The loan growth we experienced during the first quarter, along with our current loan pipelines and our continued ability to attract new associates, have bolstered our confidence that we could meet or exceed mid-teen percentage loan growth for this year."

BALANCE SHEET GROWTH:

Total assets at March 31, 2022 were $39.4 billion, an increase of approximately $4.1 billion from March 31, 2021, reflecting a year-over-year increase of 11.6 percent. A further analysis of select balance sheet trends follows:

 

Balances at

 

Balances at

 

(dollars in thousands)

March 31,
2022

December 31,
2021

Linked-Quarter
Annualized
% Change

March 31,
2021

Year-over-Year
% Change

Loans

$

24,499,022

$

23,414,262

18.5

%

$

23,086,701

6.1

%

Less PPP loans

 

157,180

 

371,118

(230.6

)%

 

2,221,409

(92.9

)%

Loans excluding PPP loans

 

24,341,842

 

23,043,144

22.5

%

 

20,865,292

16.7

%

Securities and other interest-earning assets

 

10,704,157

 

11,046,895

(12.4

)%

 

8,237,831

29.9

%

Total interest-earning assets excluding PPP loans

$

35,045,999

$

34,090,039

11.2

%

$

29,103,123

20.4

%

 

 

 

 

 

 

Core Deposits:

 

 

 

 

 

Noninterest-bearing deposits

 

10,986,194

 

10,461,071

20.1

%

 

8,103,943

35.6

%

Interest-bearing core deposits(1)

 

19,412,489

 

18,855,840

11.8

%

 

16,857,447

15.2

%

Noncore deposits and other funding(2)

 

3,428,850

 

3,452,034

(2.7

)%

 

5,062,784

(32.3

)%

Total funding

$

33,827,533

$

32,768,945

12.9

%

$

30,024,174

12.7

%

 

(1): Interest-bearing core deposits are interest-bearing deposits, money market accounts, time deposits less than $250,000 and reciprocating time and money market deposits issued through the IntraFi Network.

(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.

"During the first quarter, loan growth approximated an annualized rate of 18.5 percent when compared to balances at Dec. 31, 2021. Excluding the impact of PPP, loans increased at an annualized rate of 22.5 percent," Turner said. "As we have been highlighting for the past several quarters, replacing last year's PPP revenue and extraordinary volume of mortgage origination fees is primarily a function of new loan growth this year, and we are off to a tremendous start. Additionally, we were pleased with our core deposit growth in the first quarter of 14.7 percent and that our average deposit costs decreased during the quarter to 13 basis points."

PRE-TAX, PRE-PROVISION NET REVENUES (PPNR):

Pre-tax, pre-provision net revenues (PPNR) for the quarter ended March 31, 2022 were $160.3 million, a decrease of 1.4 percent from the $160.9 million recognized in the quarter ended March 31, 2021.

 

Three months ended

 

March 31,

(dollars in thousands)

2022

2021

% change

Revenues:

 

 

 

Net interest income

$

239,475

$

222,870

 

7.5

%

Noninterest income

 

103,496

 

92,709

 

11.6

%

Total revenues

 

342,971

 

315,579

 

8.7

%

Noninterest expense

 

182,661

 

154,696

 

18.1

%

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

$

160,310

$

160,883

 

(0.4

)%

Adjustments:

 

 

 

Investment losses on sales of securities, net

 

61

 

 

NM

 

ORE expense (benefit)

 

105

 

(13

)

NM

 

Adjusted PPNR

$

160,476

$

160,870

 

(0.2

)%

  • Revenue per fully diluted common share was $4.52 for the three months ended March 31, 2022, compared to $4.47 for the fourth quarter of 2021 and $4.17 for the first quarter of 2021, an 8.4 percent year-over-year growth rate.
  • Net interest income for the quarter ended March 31, 2022 was $239.5 million, compared to $238.8 million for the fourth quarter of 2021 and $222.9 million for the first quarter of 2021, a year-over-year growth rate of 7.5 percent.
    • Revenues from PPP loans approximated $10.8 million in the first quarter of 2022, compared to $15.5 million in the fourth quarter of 2021 and $23.0 million in the first quarter of 2021. At March 31, 2022, remaining unamortized fees for PPP loans were approximately $5.0 million.
    • Included in net interest income for the first quarter of 2022 was $1.7 million of discount accretion associated with fair value adjustments, compared to $2.2 million of discount accretion recognized in the fourth quarter of 2021 and $3.8 million in the first quarter of 2021. There remains $7.0 million of purchase accounting discount accretion as of March 31, 2022.
  • Noninterest income for the quarter ended March 31, 2022 was $103.5 million, compared to $100.7 million for the quarter ended Dec. 31, 2021, a linked-quarter annualized increase of 11.0 percent. Compared to $92.7 million for the first quarter of 2021, noninterest income grew 11.6 percent.
    • Wealth management revenues, which include investment, trust and insurance services, were $20.7 million for the first quarter of 2022, compared to $19.3 million for the fourth quarter of 2021, a linked-quarter annualized increase of 28.2 percent. Compared to $16.1 million for the first quarter of 2021, wealth management revenues were up 28.5 percent.
    • First quarter 2022 gains from investments in joint ventures and other funds was $1.7 million, compared to $3.4 million in the first quarter of 2021 and $4.1 million in the fourth quarter of 2021.
    • Service charges on deposit accounts were $11.0 million for the quarter ended March 31, 2022, compared to $12.7 million for the quarter ended Dec. 31, 2021 and $8.3 million for the quarter ended March 31, 2021. Fluctuations in these accounts are directly correlated with transaction volume and include NSF fees, analysis fees and check card interchange revenues.
    • Income from the firm's investment in BHG was $33.7 million for the quarter ended March 31, 2022, up from $30.8 million for the quarter ended Dec. 31, 2021 and $29.0 million for the quarter ended March 31, 2021.
    • Other noninterest income was $34.1 million for the quarter ended March 31, 2022, compared to $33.2 million for the quarter ended Dec. 31, 2021 and $25.7 million for the quarter ended March 31, 2021, a linked-quarter annualized increase of 10.4 percent and year-over-year growth of 32.8 percent, respectively. The year-over-year growth was primarily impacted by the $5.5 million gain on remeasurement of our investment in JB&B.
  • Noninterest expense for the quarter ended March 31, 2022 was $182.7 million, compared to $170.4 million in the fourth quarter of 2021 and $154.7 million in the first quarter of 2021, reflecting a linked-quarter annualized growth rate of 28.7 percent and a year-over-year increase of 18.1 percent.
    • Salaries and employee benefits were $121.9 million in the first quarter of 2022, compared to $110.0 million in the fourth quarter of 2021 and $102.7 million in the first quarter of 2021, reflecting a linked-quarter annualized growth rate of 43.0 percent and a year-over-year increase of 18.6 percent. Total full-time equivalent associates amounted to 2,988 associates at March 31, 2022, compared to 2,621 full-time equivalent associates at March 31, 2021, an increase of 14.0 percent.
    • Noninterest expense categories, other than salaries and employee benefits, were $60.8 million in the first quarter of 2022, compared to $60.4 million in the fourth quarter of 2021 and $52.0 million in the first quarter of 2021, reflecting a linked-quarter annualized growth rate of less than 1 percent and a year-over-year increase of 17.0 percent.

"We continue to highlight PPNR and our efforts to grow PPNR consistently," said Harold R. Carpenter, Pinnacle’s chief financial officer. "PPNR was flattish compared to last year’s first quarter, but given the headwinds of reduced PPP revenues and reduced revenues from our residential mortgage business, we are pleased with our first quarter PPNR results. In addition to our anticipated loan growth this year, we believe that BHG's performance will result in at least 20 percent noninterest income growth in 2022 and that our wealth management businesses will also have a strong year given market volatility and several significant hires that were accomplished in 2021. As to expenses, compensation costs increased nearly 19 percent over last year, due primarily to increased headcount, annual merit raises and seasonal payroll taxes. We are optimistic that our hiring model will continue to provide us even more opportunities to add revenue producers this year. As a result, including the impact of inflation and the addition of JB&B on our expense base, we believe our noninterest expenses for 2022 will approximate mid-teen percentage increase over 2021 noninterest expense.

"We all appreciated that growing PPNR in 2022 would be challenging for the entire banking industry. We believe our loan growth momentum going into the second quarter is very strong, and assuming rates continue to increase and eliminate the impact of a larger percentage of our loan floors, not only should our revenue growth accelerate, but our margins should begin to expand as well."

PROFITABILITY:

 

Three months ended

 

March 31,
2022

December 31,
2021

March 31,
2021

Net interest margin

 

2.89

%

 

2.96

%

 

3.02

%

Efficiency ratio

 

53.26

%

 

50.20

%

 

49.02

%

Return on average assets

 

1.32

%

 

1.39

%

 

1.42

%

Return on average tangible common equity (TCE)

 

15.63

%

 

16.13

%

 

17.16

%

Book value per common share

$

66.30

 

$

66.89

 

$

62.33

 

Tangible book value per common share

$

41.65

 

$

42.55

 

$

37.88

 

  • Net interest margin was 2.89 percent for the first quarter of 2022, compared to 2.96 percent for the fourth quarter of 2021 and 3.02 percent for the first quarter of 2021.
    • Impacting the firm’s net interest margin in the first quarter of 2022 and first and fourth quarters of 2021 were both PPP loans and the firm’s decision early in the pandemic to maintain additional on-balance sheet liquidity. The firm estimates its first quarter 2022 and fourth quarter 2021 net interest margin was negatively impacted by approximately 29 and 25 basis points, respectively, as a result of PPP loans and additional liquidity, compared to approximately 27 basis points for the first quarter 2021.
  • During the quarter ended March 31, 2022, book value decreased by $0.59 per share and tangible book value decreased by $0.90 per share when compared to the fourth quarter of 2021, due in large part to approximately $132.8 million decrease in the net unrealized fair value of the firm's available-for-sale investment securities portfolio caused by rising rates. Additionally, during the first quarter, the firm transferred approximately $1.1 billion of available-for-sale securities to held-to-maturity.

"We remain pleased with our profitability metrics for the first quarter," Carpenter said. "There is much discussion about the rate environment and its impact on our balance sheet sensitivity going forward. We believe our balance sheet is positioned more conservatively than most given our disciplined adherence to loan floors over the last few years. Over the course of the last few weeks and since the most recent increase in Fed funds rates, our loan yields have expanded by almost 6 basis points, while our total deposit costs have increased approximately 2 basis points. Thus far, and we are very early in the up-rate cycle, we are pleased with how our relationship managers are working with their clients and setting expectations for the next several quarters.

"Additionally, the impact of increased rates on tangible book value has garnered attention. Our tangible book value per share decreased by 2.1 percent this quarter, primarily due to the impact of rising rates on accumulated other comprehensive income. Early in the first quarter of 2022, we transferred approximately $1.1 billion of available-for-sale securities to held-to-maturity to help counter the impact of rising rates on tangible equity. Tangible book value per share is a key initiative of ours, so we will continue to position our firm to grow tangible book value over the long term."

MAINTAINING A STRONG BALANCE SHEET:

 

Three months ended or as of

 

March 31,
2022

December 31,
2021

March 31,
2021

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

0.05

%

0.14

%

0.20

%

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

0.14

%

0.17

%

0.36

%

Classified asset ratio (Pinnacle Bank) (2)

3.60

%

4.10

%

7.30

%

Allowance for credit losses (ACL) to total loans

1.07

%

1.12

%

1.22

%

ACL to total loans, excluding PPP

1.07

%

1.14

%

1.35

%

 

(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.

  • Provision for credit losses was $2.7 million in the first quarter of 2022 and the fourth quarter of 2021, compared to $7.2 million in the first quarter of 2021. Net charge-offs were $3.0 million for the quarter ended March 31, 2022, compared to $8.1 million for the quarter ended Dec. 31, 2021 and $11.4 million for the quarter ended March 31, 2021.
  • Nonperforming assets were $35.1 million at March 31, 2022, compared to $40.1 million at Dec. 31, 2021 and $82.8 million at March 31, 2021. The ratio of the allowance for credit losses to nonperforming loans at March 31, 2022 was 982.9 percent, compared to 833.8 percent at Dec. 31, 2021 and 389.4 percent at March 31, 2021.
  • Classified assets were $137.0 million at March 31, 2022, compared to $151.3 million at Dec. 31, 2021 and $244.9 million at March 31, 2021.

"Our credit performance has been strong for many years, and this was even more evident in the first quarter," Carpenter said. "Several of our loan credit metrics are at the lowest point they have been at in many years. During the first quarter, our allowance for credit losses to total loans (excluding PPP loans) (ACL) decreased from 1.14 percent at year end 2021 to 1.07 percent at March 31, 2022. We believe that continued reductions in our ACL are possible through most of 2022."

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. CT on April 19, 2022, to discuss first quarter 2022 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, is listed by Forbes among the top 25 banks in the nation and earned a spot on the 2022 list of 100 Best Companies to Work For® in the U.S., its sixth consecutive appearance. American Banker recognized Pinnacle as one of America’s Best Banks to Work For nine years in a row and No. 1 among banks with more than $11 billion in assets in 2021.

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

The firm began operations in a single location in downtown Nashville, TN in October 2000 and has since grown to approximately $39.4 billion in assets as of March 31, 2022. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 15 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 booster shots 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) 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; (vi) 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; (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 compression to net interest margin; (x) 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, including the negative impact of inflationary pressures on our customers and their businesses; (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) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, like BHG, including regulatory or legislative developments; (xxvii) fluctuations in the valuations of Pinnacle Financial's equity investments and the ultimate success of such investments; (xxiii) 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, 2021, 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 2022 versus certain periods in 2021 and to internally prepared projections.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS – UNAUDITED

 

 

 

 

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

March 31,
2022

December 31,
2021

March 31,
2021

ASSETS

 

 

 

Cash and noninterest-bearing due from banks

$

187,093

 

$

188,287

 

$

189,251

 

Restricted cash

 

29,680

 

 

82,505

 

 

162,834

 

Interest-bearing due from banks

 

3,103,008

 

 

3,830,747

 

 

2,780,137

 

Federal funds sold and other

 

 

 

 

 

55,186

 

Cash and cash equivalents

 

3,319,781

 

 

4,101,539

 

 

3,187,408

 

Securities purchased with agreement to resell

 

1,332,753

 

 

1,000,000

 

 

450,000

 

Securities available-for-sale, at fair value

 

3,569,723

 

 

4,914,194

 

 

3,677,019

 

Securities held-to-maturity (fair value of $2.4 billion, $1.2 billion and $1.0 billion, net of allowance for credit losses of $1.1 million, $161 and $198 at March 31, 2022, Dec. 31, 2021 and March 31, 2021, respectively)

 

2,566,386

 

 

1,155,958

 

 

1,014,345

 

Consumer loans held-for-sale

 

67,224

 

 

45,806

 

 

85,769

 

Commercial loans held-for-sale

 

35,383

 

 

17,685

 

 

12,541

 

Loans

 

24,499,022

 

 

23,414,262

 

 

23,086,701

 

Less allowance for credit losses

 

(261,618

)

 

(263,233

)

 

(280,881

)

Loans, net

 

24,237,404

 

 

23,151,029

 

 

22,805,820

 

Premises and equipment, net

 

296,779

 

 

288,182

 

 

289,515

 

Equity method investment

 

382,256

 

 

360,833

 

 

327,512

 

Accrued interest receivable

 

95,147

 

 

98,813

 

 

98,477

 

Goodwill

 

1,850,951

 

 

1,819,811

 

 

1,819,811

 

Core deposits and other intangible assets

 

31,997

 

 

33,819

 

 

40,130

 

Other real estate owned

 

8,237

 

 

8,537

 

 

10,651

 

Other assets

 

1,606,357

 

 

1,473,193

 

 

1,480,707

 

Total assets

$

39,400,378

 

$

38,469,399

 

$

35,299,705

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Deposits:

 

 

 

Noninterest-bearing

$

10,986,194

 

$

10,461,071

 

$

8,103,943

 

Interest-bearing

 

6,838,659

 

 

6,530,015

 

 

5,814,689

 

Savings and money market accounts

 

12,416,101

 

 

12,179,663

 

 

11,361,620

 

Time

 

2,054,860

 

 

2,133,784

 

 

3,012,688

 

Total deposits

 

32,295,814

 

 

31,304,533

 

 

28,292,940

 

Securities sold under agreements to repurchase

 

219,530

 

 

152,559

 

 

172,117

 

Federal Home Loan Bank advances

 

888,870

 

 

888,681

 

 

888,115

 

Subordinated debt and other borrowings

 

423,319

 

 

423,172

 

 

671,002

 

Accrued interest payable

 

8,575

 

 

12,504

 

 

15,359

 

Other liabilities

 

283,320

 

 

377,343

 

 

300,648

 

Total liabilities

 

34,119,428

 

 

33,158,792

 

 

30,340,181

 

Preferred stock, no par value, 10.0 million shares authorized; 225,000 shares non-cumulative perpetual preferred stock, Series B, liquidation preference $225.0 million, issued and outstanding at March 31, 2022, Dec. 31, 2021 and March 31, 2021, respectively

 

217,126

 

 

217,126

 

 

217,126

 

Common stock, par value $1.00; 180.0 million shares authorized; 76.4 million, 76.1 million and 76.1 million shares issued and outstanding at March 31, 2022, Dec. 31, 2021, and March 31, 2021, respectively

 

76,377

 

 

76,143

 

 

76,088

 

Additional paid-in capital

 

3,045,914

 

 

3,045,802

 

 

3,027,311

 

Retained earnings

 

1,972,686

 

 

1,864,350

 

 

1,515,451

 

Accumulated other comprehensive income (loss), net of taxes

 

(31,153

)

 

107,186

 

 

123,548

 

Total stockholders' equity

 

5,280,950

 

 

5,310,607

 

 

4,959,524

 

Total liabilities and stockholders' equity

$

39,400,378

 

$

38,469,399

 

$

35,299,705

 

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED

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

Three months ended

 

March 31,
2022

December 31,
2021

March 31,
2021

Interest income:

 

 

 

Loans, including fees

$

227,047

 

$

230,026

 

$

227,372

 

Securities

 

 

 

Taxable

 

11,048

 

 

9,696

 

 

7,728

 

Tax-exempt

 

17,446

 

 

16,931

 

 

15,498

 

Federal funds sold and other

 

3,076

 

 

2,540

 

 

1,319

 

Total interest income

 

258,617

 

 

259,193

 

 

251,917

 

Interest expense:

 

 

 

Deposits

 

10,250

 

 

10,648

 

 

17,468

 

Securities sold under agreements to repurchase

 

56

 

 

54

 

 

72

 

FHLB advances and other borrowings

 

8,836

 

 

9,728

 

 

11,507

 

Total interest expense

 

19,142

 

 

20,430

 

 

29,047

 

Net interest income

 

239,475

 

 

238,763

 

 

222,870

 

Provision for credit losses

 

2,720

 

 

2,675

 

 

7,235

 

Net interest income after provision for credit losses

 

236,755

 

 

236,088

 

 

215,635

 

Noninterest income:

 

 

 

Service charges on deposit accounts

 

11,030

 

 

12,663

 

 

8,307

 

Investment services

 

10,691

 

 

11,081

 

 

8,191

 

Insurance sales commissions

 

4,036

 

 

2,328

 

 

3,225

 

Gains on mortgage loans sold, net

 

4,066

 

 

4,244

 

 

13,666

 

Investment gains (losses) on sales, net

 

(61

)

 

393

 

 

 

Trust fees

 

5,973

 

 

5,926

 

 

4,687

 

Income from equity method investment

 

33,655

 

 

30,844

 

 

28,950

 

Other noninterest income

 

34,106

 

 

33,244

 

 

25,683

 

Total noninterest income

 

103,496

 

 

100,723

 

 

92,709

 

Noninterest expense:

 

 

 

Salaries and employee benefits

 

121,852

 

 

110,048

 

 

102,728

 

Equipment and occupancy

 

25,536

 

 

24,997

 

 

23,220

 

Other real estate, net

 

105

 

 

37

 

 

(13

)

Marketing and other business development

 

3,777

 

 

4,562

 

 

2,349

 

Postage and supplies

 

2,371

 

 

2,191

 

 

1,806

 

Amortization of intangibles

 

1,871

 

 

2,057

 

 

2,206

 

Other noninterest expense

 

27,149

 

 

26,525

 

 

22,400

 

Total noninterest expense

 

182,661

 

 

170,417

 

 

154,696

 

Income before income taxes

 

157,590

 

 

166,394

 

 

153,648

 

Income tax expense

 

28,480

 

 

32,866

 

 

28,220

 

Net income

 

129,110

 

 

133,528

 

 

125,428

 

Preferred stock dividends

 

(3,798

)

 

(3,798

)

 

(3,798

)

Net income available to common shareholders

$

125,312

 

$

129,730

 

$

121,630

 

Per share information:

 

 

 

Basic net income per common share

$

1.66

 

$

1.72

 

$

1.61

 

Diluted net income per common share

$

1.65

 

$

1.71

 

$

1.61

 

Weighted average common shares outstanding:

 

 

 

Basic

 

75,654,986

 

 

75,523,052

 

 

75,372,883

 

Diluted

 

75,930,372

 

 

76,024,700

 

 

75,657,149

 

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

 

 

 

 

 

 

(dollars in thousands)

March

December

September

June

March

December

2022

2021

2021

2021

2021

2020

Balance sheet data, at quarter end:

 

 

 

 

 

 

Commercial and industrial loans

$

8,213,204

 

7,703,428

 

7,079,431

 

6,771,254

 

6,355,119

 

6,239,588

 

Commercial real estate - owner occupied loans

 

3,124,275

 

3,048,822

 

2,954,519

 

2,817,689

 

2,869,785

 

2,802,227

 

Commercial real estate - investment loans

 

4,707,761

 

4,607,048

 

4,597,736

 

4,644,551

 

4,782,712

 

4,565,040

 

Commercial real estate - multifamily and other loans

 

718,822

 

614,656

 

621,471

 

724,253

 

790,469

 

638,344

 

Consumer real estate - mortgage loans

 

3,813,252

 

3,680,684

 

3,540,439

 

3,335,537

 

3,086,916

 

3,099,172

 

Construction and land development loans

 

3,277,029

 

2,903,017

 

3,096,961

 

2,791,611

 

2,568,969

 

2,901,746

 

Consumer and other loans

 

487,499

 

485,489

 

459,182

 

440,124

 

411,322

 

379,515

 

Paycheck protection program loans

 

157,180

 

371,118

 

708,722

 

1,372,916

 

2,221,409

 

1,798,869

 

Total loans

 

24,499,022

 

23,414,262

 

23,058,461

 

22,897,935

 

23,086,701

 

22,424,501

 

Allowance for credit losses

 

(261,618

)

(263,233

)

(268,635

)

(273,747

)

(280,881

)

(285,050

)

Securities

 

6,136,109

 

6,070,152

 

5,623,890

 

5,326,908

 

4,691,364

 

4,615,040

 

Total assets

 

39,400,378

 

38,469,399

 

36,523,936

 

35,412,309

 

35,299,705

 

34,932,860

 

Noninterest-bearing deposits

 

10,986,194

 

10,461,071

 

9,809,691

 

8,926,200

 

8,103,943

 

7,392,325

 

Total deposits

 

32,295,814

 

31,304,533

 

29,369,807

 

28,217,603

 

28,292,940

 

27,705,575

 

Securities sold under agreements to repurchase

 

219,530

 

152,559

 

148,240

 

177,661

 

172,117

 

128,164

 

FHLB advances

 

888,870

 

888,681

 

888,493

 

888,304

 

888,115

 

1,087,927

 

Subordinated debt and other borrowings

 

423,319

 

423,172

 

542,712

 

671,994

 

671,002

 

670,575

 

Total stockholders' equity

 

5,280,950

 

5,310,607

 

5,191,798

 

5,101,231

 

4,959,524

 

4,904,611

 

Balance sheet data, quarterly averages:

 

 

 

 

 

 

Total loans

$

23,848,533

 

23,225,735

 

22,986,835

 

23,179,803

 

22,848,086

 

22,524,683

 

Securities

 

6,143,664

 

5,813,636

 

5,451,232

 

5,036,786

 

4,666,269

 

4,567,872

 

Federal funds sold and other

 

4,799,946

 

4,356,113

 

3,743,074

 

3,143,078

 

3,356,199

 

3,621,623

 

Total earning assets

 

34,792,143

 

33,395,484

 

32,181,141

 

31,359,667

 

30,870,554

 

30,714,178

 

Total assets

 

38,637,221

 

37,132,078

 

35,896,130

 

35,053,772

 

34,659,132

 

34,436,765

 

Noninterest-bearing deposits

 

10,478,403

 

10,240,393

 

9,247,382

 

8,500,465

 

7,620,665

 

7,322,393

 

Total deposits

 

31,538,985

 

30,034,026

 

28,739,871

 

28,013,659

 

27,620,784

 

27,193,256

 

Securities sold under agreements to repurchase

 

179,869

 

141,781

 

164,837

 

173,268

 

143,586

 

121,331

 

FHLB advances

 

888,746

 

888,559

 

888,369

 

888,184

 

934,662

 

1,250,848

 

Subordinated debt and other borrowings

 

441,755

 

484,389

 

586,387

 

674,162

 

673,662

 

673,419

 

Total stockholders' equity

 

5,331,405

 

5,262,586

 

5,176,625

 

5,039,608

 

4,953,656

 

4,852,373

 

Statement of operations data, for the three months ended:

Interest income

$

258,617

 

259,193

 

260,868

 

259,236

 

251,917

 

257,047

 

Interest expense

 

19,142

 

20,430

 

23,325

 

26,011

 

29,047

 

36,062

 

Net interest income

 

239,475

 

238,763

 

237,543

 

233,225

 

222,870

 

220,985

 

Provision for credit losses

 

2,720

 

2,675

 

3,382

 

2,834

 

7,235

 

9,180

 

Net interest income after provision for credit losses

 

236,755

 

236,088

 

234,161

 

230,391

 

215,635

 

211,805

 

Noninterest income

 

103,496

 

100,723

 

104,095

 

98,207

 

92,709

 

83,444

 

Noninterest expense

 

182,661

 

170,417

 

168,851

 

166,140

 

154,696

 

161,305

 

Income before taxes

 

157,590

 

166,394

 

169,405

 

162,458

 

153,648

 

133,944

 

Income tax expense

 

28,480

 

32,866

 

32,828

 

30,668

 

28,220

 

23,068

 

Net income

 

129,110

 

133,528

 

136,577

 

131,790

 

125,428

 

110,876

 

Preferred stock dividends

 

(3,798

)

(3,798

)

(3,798

)

(3,798

)

(3,798

)

(3,798

)

Net income available to common shareholders

$

125,312

 

129,730

 

132,779

 

127,992

 

121,630

 

107,078

 

Profitability and other ratios:

 

 

 

 

 

 

Return on avg. assets (1)

 

1.32

%

1.39

%

1.47

%

1.46

%

1.42

%

1.24

%

Return on avg. equity (1)

 

9.53

%

9.78

%

10.18

%

10.19

%

9.96

%

8.78

%

Return on avg. common equity (1)

 

9.94

%

10.20

%

10.62

%

10.65

%

10.41

%

9.19

%

Return on avg. tangible common equity (1)

 

15.63

%

16.13

%

16.98

%

17.32

%

17.16

%

15.37

%

Common stock dividend payout ratio (16)

 

12.94

%

10.65

%

11.13

%

11.73

%

13.69

%

15.84

%

Net interest margin (2)

 

2.89

%

2.96

%

3.03

%

3.08

%

3.02

%

2.97

%

Noninterest income to total revenue (3)

 

30.18

%

29.67

%

30.47

%

29.63

%

29.38

%

27.41

%

Noninterest income to avg. assets (1)

 

1.09

%

1.08

%

1.15

%

1.12

%

1.08

%

0.96

%

Noninterest exp. to avg. assets (1)

 

1.92

%

1.82

%

1.87

%

1.90

%

1.81

%

1.86

%

Efficiency ratio (4)

 

53.26

%

50.20

%

49.42

%

50.13

%

49.02

%

52.99

%

Avg. loans to avg. deposits

 

75.62

%

77.33

%

79.98

%

82.74

%

82.72

%

82.83

%

Securities to total assets

 

15.57

%

15.78

%

15.40

%

15.04

%

13.29

%

13.21

%

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

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

 

 

 

 

(dollars in thousands)

Three months ended

 

Three months ended

March 31, 2022

 

March 31, 2021

 

Average
Balances

Interest

Rates/
Yields

 

Average
Balances

Interest

Rates/
Yields

Interest-earning assets

 

 

 

 

 

 

 

Loans (1) (2)

$

23,848,533

$

227,047

3.94

%

 

$

22,848,086

$

227,372

4.11

%

Securities

 

 

 

 

 

 

 

Taxable

 

3,234,641

 

11,048

1.39

%

 

 

2,271,325

 

7,728

1.38

%

Tax-exempt (2)

 

2,909,023

 

17,446

2.94

%

 

 

2,394,944

 

15,498

3.15

%

Interest-bearing due from banks

 

3,347,804

 

1,303

0.16

%

 

 

3,168,308

 

713

0.09

%

Resell agreements

 

1,281,746

 

1,214

0.38

%

 

 

5,000

 

%

Federal funds sold

 

 

%

 

 

22,809

 

%

Other

 

170,396

 

559

1.33

%

 

 

160,082

 

606

1.54

%

Total interest-earning assets

 

34,792,143

$

258,617

3.11

%

 

 

30,870,554

$

251,917

3.41

%

Nonearning assets

 

 

 

 

 

 

 

Intangible assets

 

1,863,730

 

 

 

 

1,861,386

 

 

Other nonearning assets

 

1,981,348

 

 

 

 

1,927,192

 

 

Total assets

$

38,637,221

 

 

 

$

34,659,132

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

Interest checking

 

6,391,316

 

2,599

0.16

%

 

 

5,466,389

 

2,599

0.19

%

Savings and money market

 

12,587,219

 

5,124

0.17

%

 

 

11,321,344

 

6,713

0.24

%

Time

 

2,082,047

 

2,527

0.49

%

 

 

3,212,386

 

8,156

1.03

%

Total interest-bearing deposits

 

21,060,582

 

10,250

0.20

%

 

 

20,000,119

 

17,468

0.35

%

Securities sold under agreements to repurchase

 

179,869

 

56

0.13

%

 

 

143,586

 

72

0.20

%

Federal Home Loan Bank advances

 

888,746

 

4,474

2.04

%

 

 

934,662

 

4,494

1.95

%

Subordinated debt and other borrowings

 

441,755

 

4,362

4.00

%

 

 

673,662

 

7,013

4.22

%

Total interest-bearing liabilities

 

22,570,952

 

19,142

0.34

%

 

 

21,752,029

 

29,047

0.54

%

Noninterest-bearing deposits

 

10,478,403

 

 

 

 

7,620,665

 

 

Total deposits and interest-bearing liabilities

 

33,049,355

$

19,142

0.23

%

 

 

29,372,694

$

29,047

0.40

%

Other liabilities

 

256,461

 

 

 

 

332,782

 

 

Stockholders' equity

 

5,331,405

 

 

 

 

4,953,656

 

 

Total liabilities and stockholders' equity

$

38,637,221

 

 

 

$

34,659,132

 

 

Net interest income

 

$

239,475

 

 

 

$

222,870

 

Net interest spread (3)

 

 

2.77

%

 

 

 

2.86

%

Net interest margin (4)

 

 

2.89

%

 

 

 

3.02

%

 

 

 

 

 

 

 

 

(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 March 31, 2022 compared to $7.3 million for the three months ended March 31, 2021. The tax-exempt benefit has been reduced by the projected impact of tax-exempt income that will be disallowed pursuant to IRS Regulations as of and for the then current period presented.

(3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the three months ended March 31, 2022 would have been 2.88% compared to a net interest spread of 3.00% for the three months ended March 31, 2021.

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

 

 

 

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

 

 

 

 

 

 

(dollars in thousands)

March

December

September

June

March

December

2022

2021

2021

2021

2021

2020

Asset quality information and ratios:

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

Nonaccrual loans

$

26,616

 

31,569

 

46,692

 

53,105

 

72,135

 

73,836

 

ORE and other nonperforming assets (NPAs)

 

8,437

 

8,537

 

8,415

 

9,602

 

10,651

 

12,360

 

Total nonperforming assets

$

35,053

 

40,106

 

55,107

 

62,707

 

82,786

 

86,196

 

Past due loans over 90 days and still accruing interest

$

1,605

 

1,607

 

1,914

 

1,810

 

2,833

 

2,362

 

Accruing troubled debt restructurings (5)

$

2,317

 

2,354

 

2,397

 

2,428

 

2,460

 

2,494

 

Accruing purchase credit deteriorated loans

$

12,661

 

13,086

 

12,158

 

12,400

 

13,904

 

14,091

 

Net loan charge-offs

$

2,958

 

8,077

 

9,281

 

9,968

 

11,397

 

10,775

 

Allowance for credit losses to nonaccrual loans

 

982.9

%

833.8

%

575.3

%

515.5

%

389.4

%

386.1

%

As a percentage of total loans:

 

 

 

 

 

 

Past due accruing loans over 30 days

 

0.11

%

0.09

%

0.09

%

0.07

%

0.09

%

0.19

%

Potential problem loans (6)

 

0.41

%

0.47

%

0.60

%

0.74

%

0.70

%

0.77

%

Allowance for credit losses (20)

 

1.07

%

1.12

%

1.17

%

1.20

%

1.22

%

1.27

%

Nonperforming assets to total loans, ORE and other NPAs

 

0.14

%

0.17

%

0.24

%

0.27

%

0.36

%

0.38

%

Classified asset ratio (Pinnacle Bank) (8)

 

3.6

%

4.1

%

5.6

%

6.8

%

7.3

%

8.1

%

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

 

0.05

%

0.14

%

0.16

%

0.17

%

0.20

%

0.19

%

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

 

44.9

 

45.3

 

46.0

 

46.1

 

45.2

 

45.1

 

 

 

 

 

 

 

 

Interest rates and yields:

 

 

 

 

 

 

Loans

 

3.94

%

4.04

%

4.13

%

4.11

%

4.11

%

4.20

%

Securities

 

2.12

%

2.08

%

2.04

%

2.25

%

2.29

%

2.27

%

Total earning assets

 

3.11

%

3.20

%

3.32

%

3.42

%

3.41

%

3.44

%

Total deposits, including non-interest bearing

 

0.13

%

0.14

%

0.17

%

0.20

%

0.26

%

0.33

%

Securities sold under agreements to repurchase

 

0.13

%

0.15

%

0.14

%

0.13

%

0.20

%

0.21

%

FHLB advances

 

2.04

%

2.04

%

2.04

%

2.03

%

1.95

%

2.00

%

Subordinated debt and other borrowings

 

4.00

%

4.23

%

4.45

%

4.52

%

4.22

%

4.13

%

Total deposits and interest-bearing liabilities

 

0.23

%

0.26

%

0.30

%

0.35

%

0.40

%

0.49

%

 

 

 

 

 

 

 

Capital and other ratios (8):

 

 

 

 

 

 

Pinnacle Financial ratios:

 

 

 

 

 

 

Stockholders' equity to total assets

 

13.4

%

13.8

%

14.2

%

14.4

%

14.0

%

14.0

%

Common equity Tier one

 

10.5

%

10.9

%

10.5

%

10.5

%

10.3

%

10.0

%

Tier one risk-based

 

11.2

%

11.7

%

11.3

%

11.3

%

11.2

%

10.9

%

Total risk-based

 

13.3

%

13.8

%

14.0

%

14.5

%

14.5

%

14.3

%

Leverage

 

9.5

%

9.7

%

9.3

%

9.2

%

8.9

%

8.6

%

Tangible common equity to tangible assets

 

8.5

%

8.8

%

9.0

%

9.0

%

8.6

%

8.5

%

Pinnacle Bank ratios:

 

 

 

 

 

 

Common equity Tier one

 

11.4

%

11.9

%

11.7

%

11.9

%

11.8

%

11.4

%

Tier one risk-based

 

11.4

%

11.9

%

11.7

%

11.9

%

11.8

%

11.4

%

Total risk-based

 

12.1

%

12.6

%

12.5

%

13.1

%

13.0

%

12.7

%

Leverage

 

9.6

%

9.9

%

9.7

%

9.6

%

9.4

%

9.1

%

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

 

87.4

%

79.1

%

89.3

%

80.1

%

76.0

%

89.0

%

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

 

243.7

%

234.1

%

252.4

%

248.8

%

256.0

%

264.0

%

 

 

 

 

 

 

 

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)

March

December

September

June

March

December

2022

2021

2021

2021

2021

2020

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

Earnings per common share – basic

$

1.66

 

1.72

 

1.76

 

1.70

 

1.61

 

1.42

 

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

$

1.66

 

1.71

 

1.76

 

1.69

 

1.61

 

1.58

 

Earnings per common share – diluted

$

1.65

 

1.71

 

1.75

 

1.69

 

1.61

 

1.42

 

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

$

1.65

 

1.70

 

1.75

 

1.68

 

1.61

 

1.58

 

Common dividends per share

$

0.22

 

0.18

 

0.18

 

0.18

 

0.18

 

0.16

 

Book value per common share at quarter end (9)

$

66.30

 

66.89

 

65.36

 

64.19

 

62.33

 

61.80

 

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

$

41.65

 

42.55

 

40.98

 

39.77

 

37.88

 

37.25

 

Revenue per diluted common share

$

4.52

 

4.47

 

4.50

 

4.37

 

4.17

 

4.03

 

Revenue per diluted common share, excluding non-GAAP adjustments

$

4.52

 

4.46

 

4.50

 

4.37

 

4.17

 

4.03

 

 

 

 

 

 

 

 

 

Investor information:

 

 

 

 

 

 

 

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

$

92.08

95.50

94.08

88.29

88.66

64.40

High closing sales price of common stock during quarter

$

110.41

 

104.72

 

98.00

 

92.94

 

93.58

 

65.51

 

Low closing sales price of common stock during quarter

$

90.46

 

90.20

 

83.84

 

84.25

 

63.48

 

35.97

 

 

 

 

 

 

 

 

 

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

$

26.72

 

28.21

 

28.14

 

29.13

 

27.62

 

27.69

 

High closing sales price of depositary shares during quarter

$

28.53

 

28.99

 

29.23

 

29.13

 

27.83

 

27.94

 

Low closing sales price of depositary shares during quarter

$

25.63

 

27.42

 

28.00

 

27.38

 

26.83

 

26.45

 

 

 

 

 

 

 

 

 

Other information:

 

 

 

 

 

 

 

Residential mortgage loan sales:

 

 

 

 

 

 

 

Gross loans sold

$

270,793

 

352,342

 

347,664

 

394,299

 

546,963

 

479,867

 

Gross fees (10)

$

5,700

 

10,098

 

11,215

 

15,552

 

18,793

 

23,729

 

Gross fees as a percentage of loans originated

 

2.11

%

2.87

%

3.23

%

3.94

%

3.44

%

4.94

%

Net gain on residential mortgage loans sold

$

4,066

 

4,244

 

7,814

 

6,700

 

13,666

 

12,387

 

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

$

(61

)

393

 

 

366

 

 

 

Brokerage account assets, at quarter end (11)

$

7,158,939

 

7,187,085

 

6,597,152

 

6,344,416

 

5,974,884

 

5,509,560

 

Trust account managed assets, at quarter end

$

4,499,911

 

4,720,290

 

4,155,510

 

3,640,932

 

3,443,373

 

3,295,198

 

Core deposits (12)

$

30,398,683

 

29,316,911

 

27,170,367

 

25,857,639

 

24,961,390

 

23,510,883

 

Core deposits to total funding (12)

 

89.9

%

89.5

%

87.8

%

86.3

%

83.1

%

79.5

%

Risk-weighted assets

$

31,170,258

 

29,349,534

 

27,945,624

 

26,819,277

 

26,105,158

 

25,791,896

 

Number of offices

 

119

 

118

 

117

 

116

 

115

 

114

 

Total core deposits per office

$

255,451

 

248,448

 

232,225

 

222,911

 

217,141

 

206,236

 

Total assets per full-time equivalent employee

$

13,186

 

13,541

 

13,188

 

13,087

 

13,468

 

13,262

 

Annualized revenues per full-time equivalent employee

$

465.5

 

474.1

 

489.4

 

491.3

 

488.3

 

459.8

 

Annualized expenses per full-time equivalent employee

$

247.9

 

238.0

 

241.9

 

246.3

 

239.4

 

246.6

 

Number of employees (full-time equivalent)

 

2,988.0

 

2,841.0

 

2,769.5

 

2,706.0

 

2,621.0

 

2,634.0

 

Associate retention rate (13)

 

93.1

%

93.4

%

93.4

%

93.3

%

94.4

%

94.8

%

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

Three months ended

(dollars in thousands, except per share data)

March

December

March

2022

2021

2021

Net interest income

$

239,475

 

238,763

 

222,870

 

Noninterest income

 

103,496

 

100,723

 

92,709

 

Total revenues

 

342,971

 

339,486

 

315,579

 

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

 

61

 

(393

)

 

Total revenues excluding the impact of adjustments noted above

$

343,032

 

339,093

 

315,579

 

Noninterest expense

$

182,661

 

170,417

 

154,696

 

Less: ORE expense

 

105

 

37

 

(13

)

Noninterest expense excluding the impact of adjustments noted above

$

182,556

 

170,380

 

154,709

 

Pre-tax income

$

157,590

 

166,394

 

153,648

 

Provision for credit losses

 

2,720

 

2,675

 

7,235

 

Pre-tax pre-provision net revenue

 

160,310

 

169,069

 

160,883

 

Adjustments noted above

 

166

 

(356

)

(13

)

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

$

160,476

 

168,713

 

160,870

 

Noninterest income

$

103,496

 

100,723

 

92,709

 

Less: Adjustments as noted above

 

61

 

(393

)

 

Noninterest income excluding the impact of adjustments noted above

$

103,557

 

100,330

 

92,709

 

Efficiency ratio (4)

 

53.26

%

50.20

%

49.02

%

Adjustments as noted above

 

(0.04

)%

0.05

%

%

Efficiency ratio (excluding adjustments noted above) (4)

 

53.22

%

50.25

%

49.02

%

Total average assets

$

38,637,221

 

37,132,078

 

34,659,132

 

Noninterest income to average assets (1)

 

1.09

%

1.08

%

1.08

%

Adjustments as noted above

 

%

(0.01

)%

%

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

 

1.09

%

1.07

%

1.08

%

Noninterest expense to average assets (1)

 

1.92

%

1.82

%

1.81

%

Adjustments as noted above

 

%

%

%

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

 

1.92

%

1.82

%

1.81

%

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

Three months ended

(dollars in thousands, except per share data)

March

December

September

June

March

December

2022

2021

2021

2021

2021

2020

Net income available to common shareholders

$

125,312

 

129,730

 

132,779

 

127,992

 

121,630

 

107,078

 

Investment (gains) losses on sales of securities, net

 

61

 

(393

)

 

(366

)

 

 

ORE expense

 

105

 

37

 

(79

)

(657

)

(13

)

1,457

 

FHLB restructuring charges

 

 

 

 

 

 

10,307

 

Hedge termination charges

 

 

 

 

 

 

4,673

 

Tax effect on adjustments noted above (18)

 

(43

)

93

 

21

 

267

 

3

 

(4,297

)

Net income available to common shareholders excluding adjustments noted above

$

125,435

 

129,467

 

132,721

 

127,236

 

121,620

 

119,218

 

 

 

 

 

 

 

 

Basic earnings per common share

$

1.66

 

1.72

 

1.76

 

1.70

 

1.61

 

1.42

 

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

 

 

(0.01

)

 

 

 

 

Adjustment due to ORE expense

 

 

 

 

(0.01

)

 

0.02

 

Adjustment due to FHLB restructuring charges

 

 

 

 

 

 

0.14

 

Adjustment due to hedge termination charges

 

 

 

 

 

 

0.06

 

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

 

 

 

 

 

 

(0.06

)

Basic earnings per common share excluding adjustments noted above

$

1.66

 

1.71

 

1.76

 

1.69

 

1.61

 

1.58

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

1.65

 

1.71

 

1.75

 

1.69

 

1.61

 

1.42

 

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

 

 

(0.01

)

 

 

 

 

Adjustment due to ORE expense

 

 

 

 

(0.01

)

 

0.02

 

Adjustment due to FHLB restructuring charges

 

 

 

 

 

 

0.14

 

Adjustment due to hedge termination charges

 

 

 

 

 

 

0.06

 

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

 

 

 

 

 

 

(0.06

)

Diluted earnings per common share excluding the adjustments noted above

$

1.65

 

1.70

 

1.75

 

1.68

 

1.61

 

1.58

 

 

 

 

 

 

 

 

Revenue per diluted common share

$

4.52

 

4.47

 

4.50

 

4.37

 

4.17

 

4.03

 

Adjustments as noted above

 

 

(0.01

)

 

 

 

 

Revenue per diluted common share excluding adjustments noted above

$

4.52

 

4.46

 

4.50

 

4.37

 

4.17

 

4.03

 

 

 

 

 

 

 

 

Book value per common share at quarter end (9)

$

66.30

 

66.89

 

65.36

 

64.19

 

62.33

 

61.80

 

Adjustment due to goodwill, core deposit and other intangible assets

 

(24.65

)

(24.34

)

(24.38

)

(24.42

)

(24.45

)

(24.55

)

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

$

41.65

 

42.55

 

40.98

 

39.77

 

37.88

 

37.25

 

 

 

 

 

 

 

 

Equity method investment (17)

 

 

 

 

 

 

Fee income from BHG, net of amortization

$

33,655

 

30,844

 

30,409

 

32,071

 

28,950

 

24,294

 

Funding cost to support investment

 

666

 

388

 

379

 

1,230

 

1,205

 

1,222

 

Pre-tax impact of BHG

 

32,989

 

30,456

 

30,030

 

30,841

 

27,745

 

23,072

 

Income tax expense at statutory rates (18)

 

8,623

 

7,961

 

7,850

 

8,062

 

7,253

 

6,031

 

Earnings attributable to BHG

$

24,366

 

22,495

 

22,180

 

22,779

 

20,492

 

17,041

 

 

 

 

 

 

 

 

Basic earnings per common share attributable to BHG

$

0.32

 

0.30

 

0.29

 

0.30

 

0.27

 

0.23

 

Diluted earnings per common share attributable to BHG

$

0.32

 

0.30

 

0.29

 

0.30

 

0.27

 

0.23

 

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

Three months ended

(dollars in thousands, except per share data)

March

December

March

2022

2021

2021

 

 

 

 

Return on average assets (1)

 

1.32

%

1.39

%

1.42

%

Adjustments as noted above

 

%

(0.01

) %

%

Return on average assets excluding adjustments noted above (1)

 

1.32

%

1.38

%

1.42

%

 

 

 

 

Tangible assets:

 

 

 

Total assets

$

39,400,378

 

38,469,399

 

35,299,705

 

Less: Goodwill

 

(1,850,951

)

(1,819,811

)

(1,819,811

)

Core deposit and other intangible assets

 

(31,997

)

(33,819

)

(40,130

)

Net tangible assets

$

37,517,430

 

36,615,769

 

33,439,764

 

 

 

 

 

Tangible common equity:

 

 

 

Total stockholders' equity

$

5,280,950

 

5,310,607

 

4,959,524

 

Less: Preferred stockholders' equity

 

(217,126

)

(217,126

)

(217,126

)

Total common stockholders' equity

 

5,063,824

 

5,093,481

 

4,742,398

 

Less: Goodwill

 

(1,850,951

)

(1,819,811

)

(1,819,811

)

Core deposit and other intangible assets

 

(31,997

)

(33,819

)

(40,130

)

Net tangible common equity

$

3,180,876

 

3,239,851

 

2,882,457

 

 

 

 

 

Ratio of tangible common equity to tangible assets

 

8.48

%

8.85

%

8.62

%

 

 

 

 

Average tangible assets:

 

 

 

Average assets

$

38,637,221

 

37,132,078

 

34,659,132

 

Less: Average goodwill

 

(1,830,553

)

(1,819,811

)

(1,819,811

)

Average core deposit and other intangible assets

 

(33,177

)

(35,152

)

(41,575

)

Net average tangible assets

$

36,773,491

 

35,277,115

 

32,797,746

 

 

 

 

 

Return on average assets (1)

 

1.32

%

1.39

%

1.42

%

Adjustment due to goodwill, core deposit and other intangible assets

 

0.06

%

0.07

%

0.08

%

Return on average tangible assets (1)

 

1.38

%

1.46

%

1.50

%

Adjustments as noted above

 

%

%

%

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

 

1.38

%

1.46

%

1.50

%

 

 

 

 

Average tangible common equity:

 

 

 

Average stockholders' equity

$

5,331,405

 

5,262,586

 

4,953,656

 

Less: Average preferred equity

 

(217,126

)

(217,126

)

(217,126

)

Average common equity

 

5,114,279

 

5,045,460

 

4,736,530

 

Less: Average goodwill

 

(1,830,553

)

(1,819,811

)

(1,819,811

)

Average core deposit and other intangible assets

 

(33,177

)

(35,152

)

(41,575

)

Net average tangible common equity

$

3,250,549

 

3,190,497

 

2,875,144

 

 

 

 

 

Return on average equity (1)

 

9.53

%

9.78

%

9.96

%

Adjustment due to average preferred stockholders' equity

 

0.41

%

0.42

%

0.45

%

Return on average common equity (1)

 

9.94

%

10.20

%

10.41

%

Adjustment due to goodwill, core deposit and other intangible assets

 

5.69

%

5.93

%

6.75

%

Return on average tangible common equity (1)

 

15.63

%

16.13

%

17.16

%

Adjustments as noted above

 

0.02

%

(0.03

)%

%

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

 

15.65

%

16.10

%

17.16

%

 

 

 

 

Allowance for credit losses on loans as a percent of total loans (20)

 

1.07

%

1.12

%

1.22

%

Impact of excluding PPP loans from total loans

 

%

0.02

%

0.13

%

Allowance as adjusted for the above exclusion of PPP loans from total loans (20)

 

1.07

%

1.14

%

1.35

%

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.

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MEDIA CONTACT:
Joe Bass, 615-743-8219

FINANCIAL CONTACT:
Harold Carpenter, 615-744-3742

WEBSITE: www.pnfp.com

Source: Pinnacle Financial Partners, Inc.