PNFP Reports Diluted EPS of $1.76, ROAA of 1.29% and ROATCE of 15.95% For 4Q2022

4Q22 annualized linked-quarter loans grew 19.2%, while deposits grew 15.1%

Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.76 for the quarter ended Dec. 31, 2022, compared to net income per diluted common share of $1.71 for the quarter ended Dec. 31, 2021, an increase of 2.9 percent. Net income per diluted common share was $7.17 for the year ended Dec. 31, 2022, compared to $6.75 for the year ended Dec. 31, 2021, an increase of 6.2 percent.

Paycheck Protection Program (PPP) net interest income for the three months ended Dec. 31, 2022 and 2021 was approximately $72,000 and $15.1 million, respectively. PPP net interest income for the years ended Dec. 31, 2022 and 2021 was $15.6 million and $81.4 million, respectively. PPP net interest income had minimal impact on diluted earnings per common share for the three months ended Dec. 31, 2022 and a $0.15 impact to diluted earnings per common share for the year ended Dec. 31, 2022, compared to impacts of $0.15 and $0.79 for the three months and year ended Dec. 31, 2021, respectively.

"Overall, I am very pleased with our operating performance in 2022," said M. Terry Turner, Pinnacle's president and chief executive officer. "Our core banking business continues to produce outsized growth as we capitalize on vulnerabilities at the larger banks. With a macro environment dominated by rapidly rising short-term interest rates and a very volatile yield curve, maintaining a fortress balance sheet became even more important. Throughout 2022, in addition to protecting tangible book value per common share our credit metrics remained strong and, though there are many economic uncertainties, we remain cautiously optimistic going into 2023. Additionally, even though the competitive pressures to maintain and grow deposits intensified, we were able to grow deposits by 11.7 percent during 2022, which, along with the excess liquidity we had on our balance sheet going into the year, allowed us to fund 24.0 percent loan growth for the year. Perhaps most importantly, we continue to win the war for talent having hired a record 147 revenue producers to our firm in 2022, compared to 119 in 2021. All in all, 2022 was a successful year.

"We believe the operating environment for banks in 2023 will also be challenging. The outlook for the macro environment in 2023 is uncertain at best. Nevertheless, we operate in some of the best banking markets in the country with an organic growth model that we believe further differentiates itself in times such as these. As we enter 2023, we will direct our efforts toward both strong profitability and earnings growth. Our senior leadership and associates are all in and stand ready to meet the challenges ahead."

BALANCE SHEET GROWTH:

Total assets at Dec. 31, 2022 were $42.0 billion, an increase of approximately $3.5 billion from Dec. 31, 2021, reflecting a year-over-year increase of 9.1 percent. A further analysis of select balance sheet trends follows:

 

Balances at

Linked-Quarter

Annualized

% Change

Balances at

Year-over-Year

% Change

(dollars in thousands)

Dec. 31, 2022

Sept. 30, 2022

Dec. 31, 2021

Loans

$

29,041,605

$

27,711,694

19.2

%

$

23,414,262

24.0

%

Less: PPP loans

 

7,967

 

10,723

(102.8

)%

 

371,118

(97.9

)%

Loans excluding PPP loans

 

29,033,638

 

27,700,971

19.2

%

 

23,043,144

26.0

%

Securities and other interest-earning assets

 

8,123,259

 

8,706,453

(26.8

)%

 

11,046,895

(26.5

)%

Total interest-earning assets excluding PPP loans

$

37,156,897

$

36,407,424

8.2

%

$

34,090,039

9.0

%

 

 

 

 

 

 

Core deposits:

 

 

 

 

 

Noninterest-bearing deposits

 

9,812,744

 

10,567,873

(28.6

)%

 

10,461,071

(6.2

)%

Interest-bearing core deposits(1)

 

21,488,333

 

20,180,944

25.9

%

 

18,855,840

14.0

%

Noncore deposits and other funding(2)

 

4,743,562

 

4,444,868

26.9

%

 

3,452,034

37.4

%

Total funding

$

36,044,639

$

35,193,685

9.7

%

$

32,768,945

10.0

%

   

(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.

"I am pleased to report that end-of-period loans grew $1.3 billion during the fourth quarter," Turner said. "Importantly, our deposit base also increased by $1.3 billion during the fourth quarter. We experienced a $755 million reduction in noninterest-bearing account balances during the fourth quarter of 2022 as depositors accelerated their desire for higher yields. Our relationship managers are tightly focused on both deposit acquisition and retention, and are armed with a number of specialized deposit products, including what we believe is a "best-in-class" treasury suite, that should allow us to meet our targets for both volumes and mix in 2023."

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

Pre-tax, pre-provision net revenues (PPNR) for the quarter ended Dec. 31, 2022 were $199.7 million, an increase of 18.1 percent from the $169.1 million recognized in the quarter ended Dec. 31, 2021.

 

Three months ended

Year ended

 

Dec. 31

Dec. 31

(dollars in thousands)

2022

2021

% change

2022

2021

% change

Revenues:

 

 

 

 

 

 

Net interest income

$

319,460

$

238,763

 

33.8

%

$

1,129,293

 

$

932,401

 

21.1

%

Noninterest income

 

82,321

 

100,723

 

(18.3

) %

 

416,124

 

 

395,734

 

5.2

%

Total revenues

 

401,781

 

339,486

 

18.3

%

 

1,545,417

 

 

1,328,135

 

16.4

%

Noninterest expense

 

202,047

 

170,417

 

18.6

%

 

779,999

 

 

660,104

 

18.2

%

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

 

199,734

 

169,069

 

18.1

%

 

765,418

 

 

668,031

 

14.6

%

Adjustments:

 

 

 

 

 

 

Investment (gains) losses on sales of securities, net

 

 

(393

)

NM

 

 

(156

)

 

(759

)

NM

 

ORE expense (benefit)

 

179

 

37

 

NM

 

 

280

 

 

(712

)

NM

 

Adjusted PPNR

$

199,913

$

168,713

 

18.5

%

$

765,542

 

$

666,560

 

14.8

%

  • Revenue per fully diluted common share was $5.27 for the three months ended Dec. 31, 2022, compared to $5.40 for the third quarter of 2022 and $4.47 for the fourth quarter of 2021, a 17.9 percent year-over-year growth rate.
  • Net interest income for the quarter ended Dec. 31, 2022 was $319.5 million, compared to $305.8 million for the third quarter of 2022 and $238.8 million for the fourth quarter of 2021, a year-over-year growth rate of 33.8 percent.
    • Revenues from PPP loans approximated $72,000 in the fourth quarter of 2022, compared to $755,000 in the third quarter of 2022 and $15.1 million in the fourth quarter of 2021. At Dec. 31, 2022, remaining unamortized fees for PPP loans were approximately $250,000.
    • Included in net interest income for the fourth quarter of 2022 was $1.2 million of discount accretion associated with fair value adjustments, compared to $1.3 million of discount accretion recognized in the third quarter of 2022 and $2.2 million in the fourth quarter of 2021. There remains $3.3 million of purchase accounting discount accretion as of Dec. 31, 2022.
  • Noninterest income for the quarter ended Dec. 31, 2022 was $82.3 million, compared to $104.8 million for the third quarter of 2022 and $100.7 million for the fourth quarter of 2021, a year-over-year decline of 18.3 percent.
    • Wealth management revenues, which include investment, trust and insurance services, were $20.2 million for the fourth quarter of 2022, compared to $19.4 million for the third quarter of 2022 and $19.3 million reported for the fourth quarter of 2021, a year-over-year increase of 4.5 percent.
    • Service charges on deposit accounts were $11.1 million for the quarter ended Dec. 31, 2022, compared to $10.9 million for the quarter ended Sept. 30, 2022 and $12.7 million for the quarter ended Dec. 31, 2021. Service charge revenues were negatively impacted by changes to the firm's insufficient funds and overdraft programs implemented during the third quarter of 2022.
    • During the fourth quarter of 2022, mortgage loans sold resulted in a net $65,000 loss primarily due to reduction in the volume of mortgage loan pipelines and the resulting reduction in the pipeline's market valuation of approximately $966,000.
    • Income from the firm's investment in BHG was $21.0 million for the quarter ended Dec. 31, 2022, down from $41.3 million for the quarter ended Sept. 30, 2022 and $30.8 million for the quarter ended Dec. 31, 2021, a year-over-year decline of 31.9 percent for the quarter. Income from the firm's investment in BHG was $145.5 million for the year ended Dec. 31, 2022, a 19.0 percent increase over 2021.
      • During the fourth quarter of 2022, BHG accelerated its strategy of retaining more loans on its balance sheet, which was aided by expanding its liquidity platform through the establishment of three new borrowing facilities. These facilities, which are secured by loans on BHG's balance sheet, represent incremental funding sources to BHG. At Dec. 31, 2022, BHG had fully drawn on one of these funding sources, a $500 million facility from a U.S. asset manager which carried an annualized interest rate of 7.95 percent. As a result of drawing on this facility, BHG elected to place fewer loans though its auction platform in the fourth quarter than was previously planned at the beginning of the quarter. This compares to $446 million in fundings through its securitization platform in the third quarter of 2022.
      • Loans sold to BHG's community bank partners were approximately $600 million in the fourth quarter of 2022 compared to approximately $555 million in the third quarter of 2022 and $375 million in the fourth quarter of 2021. Loan originations decreased to $1.07 billion in the fourth quarter of 2022 compared to $1.17 billion in the third quarter of 2022, its all-time quarterly high for originations. Originations decreased in the fourth quarter primarily due to BHG electing to tighten its underwriting and thus increase the quality of its originations.
      • BHG increased its reserves for on-balance sheet loan losses to $146.9 million, or 4.59 percent of loans held for investment at Dec. 31, 2022, compared to 3.53 percent at Sept. 30, 2022. BHG also increased its accrual for losses attributable to loan substitutions and prepayments for loans previously sold through its community bank auction platform to $313.9 million, or 5.66 percent of the loans that have been previously sold and were unpaid, at Dec. 31, 2022 compared to 5.28 percent at Sept. 30, 2022.
    • Other noninterest income was $30.1 million for the quarter ended Dec. 31, 2022, compared to $31.8 million for the quarter ended Sept. 30, 2022 and $33.2 million for the quarter ended Dec. 31, 2021, a year-over-year decline of 9.6 percent.
      • Fourth quarter 2022 gains from market valuation adjustments in other equity investments were $1.5 million, compared to $725,000 in the third quarter of 2022 and $4.1 million in the fourth quarter of 2021.
  • Noninterest expense for the quarter ended Dec. 31, 2022 was $202.0 million, compared to $199.3 million in the third quarter of 2022 and $170.4 million in the fourth quarter of 2021, reflecting a year-over-year increase of 18.6 percent.
    • Salaries and employee benefits were $131.8 million in the fourth quarter of 2022, compared to $129.9 million in the third quarter of 2022 and $110.0 million in the fourth quarter of 2021, reflecting a year-over-year increase of 19.8 percent.
      • Increase in headcount contributed to the growth in compensation. Total full-time equivalent associates amounted to 3,241.5 associates at Dec. 31, 2022, compared to 2,841.0 full-time equivalent associates at Dec. 31, 2021, a year-over-year increase in headcount of 14.1 percent.
      • Costs related to the firm's incentive plans were $28.5 million in the fourth quarter of 2022 compared to $30.7 million in the third quarter of 2022 and $24.2 million in the fourth quarter of 2021. The reduction in incentive costs in the fourth quarter of 2022 from the third quarter was caused by the fact that the firm did not achieve its fourth quarter PPNR targets under its annual cash incentive plan. Thus, the costs associated with the annual cash incentive award was reduced in the fourth quarter. This reduction was offset by increased headcount. Additionally, a significant portion of the firm's leadership team members' equity compensation is performance-based. After evaluation of the impact of the company's performance in the fourth quarter of 2022 on the company's full year performance against the performance metrics applicable to these performance-based equity awards, it was determined that a smaller accrual was required in the fourth quarter than the company had recorded in each of the first three quarters of 2022.
    • Noninterest expense categories, other than salaries and employee benefits, were $70.2 million in the fourth quarter of 2022, compared to $69.3 million in the third quarter of 2022 and $60.4 million in the fourth quarter of 2021, reflecting a year-over-year increase of 16.4 percent.

"Our fourth quarter 2022 PPNR results decreased by 5.5 percent from the third quarter, while full year 2022 PPNR results exceeded 2021 results by 14.6 percent," said Harold R. Carpenter, Pinnacle’s chief financial officer. "Loan growth, as well as the impact of the rising short-term rate environment, contributed to an increase of $13.7 million in net interest income in the fourth quarter of 2022 as compared to the third quarter of 2022. As to BHG, we anticipated a reduction in its fourth quarter results. Further impacting its fourth quarter results was the successful closing of three new funding sources, showcasing BHG's unique access to liquidity at a time when many asset generators are struggling to fund their growth. BHG's decision to tap into one of these funding sources contributed to fewer loans being placed on the auction platform than was originally anticipated resulting in reduced fourth quarter BHG revenues. However, by electing to hold more loans on BHG's balance sheet, this should support increased net interest income to BHG in the future.

"Total revenues increased by approximately $217.3 million between 2022 and 2021, again primarily due to loan growth and the impact of the rising short-term rate environment; however, this increase was negatively impacted by approximately $65.9 million in reduced PPP revenues in 2022 compared to 2021 and rising deposit costs. Thus, excluding PPP revenues of $15.6 million and $81.4 million, from 2022 and 2021, respectively, total revenues were up approximately 22.7 percent between the two periods. Total expenses increased by $119.9 million between 2022 and 2021, primarily due to the increased personnel costs associated with the net addition of approximately 400 associates during 2022.

"Obviously, increased wages and inflation will have a bearing on our expense run rates as we enter 2023. We have built another strong hiring plan for 2023, but we will retain the flexibility to reduce this hiring plan at any time during the year should our leadership deem it necessary. Another item that is impactful to our compensation expense is our incentive burden which would be lower should our results not achieve our 2023 cash incentive plan targets. As many investors are aware, our annual cash incentive awards are always subject to the achievement of predetermined EPS targets. Also, we have several projects and events slated for 2023 which, we could postpone or cancel to reduce our non-compensation cost for this year. We will be closely monitoring our costs and believe we have sufficient flexibility to reduce our noninterest expense run rates at any time should revenues to support these investments not materialize."

PROFITABILITY AND SOUNDNESS:

 

Three months ended

 

Year ended

 

Dec. 31, 2022

Sept. 30, 2022

Dec. 31, 2021

 

Dec. 31, 2022

Dec. 31, 2021

Net interest margin

3.60 %

3.47 %

2.96 %

 

3.29 %

3.02 %

Efficiency ratio

50.29 %

48.53 %

50.20 %

 

50.47 %

49.70 %

Return on average assets

1.29 %

1.42 %

1.39 %

 

1.37 %

1.43 %

Return on average tangible common equity (TCE)

15.95 %

17.40 %

16.13 %

 

16.65 %

16.88 %

 

As of

 

 

Dec. 31, 2022

Sept. 30, 2022

Dec. 31, 2021

 

Stockholder's equity to total assets

 

13.2

%

 

13.0

%

 

13.8

%

 

Tangible common equity to tangible assets

 

8.5

%

 

8.3

%

 

8.8

%

 

Book value per common share

$

69.35

 

$

67.07

 

$

66.89

 

 

Tangible book value per common share

$

44.74

 

$

42.44

 

$

42.55

 

 

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

 

0.17

%

 

0.16

%

 

0.14

%

 

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

 

0.16

%

 

0.15

%

 

0.17

%

 

Classified asset ratio (Pinnacle Bank) (2)

 

2.40

%

 

2.60

%

 

4.10

%

 

Allowance for credit losses (ACL) to total loans

 

1.04

%

 

1.04

%

 

1.12

%

 

ACL to total loans, excluding PPP

 

1.04

%

 

1.04

%

 

1.14

%

 

   

(1):

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

   

(2):

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

  • Net interest margin was 3.60 percent for the fourth quarter of 2022, compared to 3.47 percent for the third quarter of 2022 and 2.96 percent for the fourth quarter of 2021. Net interest margin for the year ended Dec. 31, 2022 was 3.29 percent, compared to 3.02 percent for the year ended Dec. 31, 2021.
  • Provision for credit losses was $24.8 million in the fourth quarter of 2022, compared to $27.5 million in the third quarter of 2022 and $2.7 million in the fourth quarter of 2021. Net charge-offs were $11.7 million for the quarter ended Dec. 31, 2022, compared to $11.0 million for the quarter ended Sept. 30, 2022 and $8.1 million for the quarter ended Dec. 31, 2021. Annualized net loan charge-offs for the fourth quarter of 2022 were 0.17 percent.
  • Nonperforming assets were $46.1 million at Dec. 31, 2022, compared to $41.9 million at Sept. 30, 2022 and $40.1 million at Dec. 31, 2021, up 14.9 percent over the same quarter last year. The ratio of the allowance for credit losses to nonperforming loans at Dec. 31, 2022 was 788.8 percent, compared to 844.5 percent at Sept. 30, 2022 and 833.8 percent at Dec. 31, 2021.
  • Classified assets were $104.2 million at Dec. 31, 2022, compared to $107.9 million at Sept. 30, 2022 and $151.3 million at Dec. 31, 2021, down 31.1 percent over the same quarter last year.

"We were pleased that our net interest margin increased by approximately 13 basis points during the fourth quarter," Carpenter said. "The growth of our net interest margin slowed from the prior quarter, primarily due to increased deposit costs of 74 basis points in the quarter as depositors increasingly sought a higher return for their deposit dollars and competition for deposits remained fierce. We were also pleased that our tangible book value per common share increased in the fourth quarter to $44.74 at Dec. 31, 2022.

"As to credit metrics, they were consistent with the prior quarter’s results and we believe they remain strong in comparison to historical results. Thus, we enter 2023 from a position of strength should any negative trends materialize. We believe we have some of the most experienced relationship managers and credit officers in our markets and, as a result, believe this experience and their long-tenured relationships translate into client selection practices that result in a borrower base that is better able to weather these challenging economic conditions."

BOARD OF DIRECTORS DECLARES DIVIDENDS AND AUTHORIZES SHARE REPURCHASE PLAN

On Jan. 17, 2023, Pinnacle Financial's Board of Directors approved a quarterly cash dividend of $0.22 per common share to be paid on Feb. 24, 2023 to common shareholders of record as of the close of business on Feb. 3, 2023. 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 March 1, 2023 to shareholders of record at the close of business on Feb. 14, 2023. The amount and timing of any future dividend payments to both preferred and common shareholders will be subject to the approval of Pinnacle's Board of Directors.

The firm also announced that its Board of Directors has authorized a new share repurchase program for up to $125 million of the Company’s common stock to commence upon expiration of its existing share repurchase program that is set to expire on March 31, 2023. Repurchases of the Company’s common stock will be made in accordance with applicable laws and may be made at management’s discretion from time to time in the open market, through privately negotiated transactions or otherwise. The board authorized the repurchase program to remain in effect through March 31, 2024, unless the entire repurchase amount has been acquired before that date.

The share repurchase program may be extended, modified, amended, suspended or discontinued at any time at the Company’s discretion and does not commit the Company to repurchase shares of its common stock. The actual timing, number and value of the shares to be purchased under the program will be determined by the Company at its discretion and will depend on a number of factors, including the performance of the Company’s stock price, the Company’s ongoing capital planning considerations, general market and other conditions, applicable legal requirements and compliance with the terms of the Company’s outstanding indebtedness.

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. CT on Jan. 18, 2023, to discuss fourth quarter 2022 results and other matters. To access the call for audio only, please call 1-877-209-7255. For the presentation and streaming audio, please access the webcast on the investor relations page of Pinnacle's website at www.pnfp.com.

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

Pinnacle Financial Partners provides a full range of banking, investment, trust, mortgage and insurance products and services designed for businesses and their owners and individuals interested in a comprehensive relationship with their financial institution. The firm is the No. 1 bank in the Nashville-Murfreesboro-Franklin MSA, according to 2022 deposit data from the FDIC, is listed by Forbes among the top 25 banks in the nation and earned a spot on the 2022 list of 100 Best Companies to Work For® in the U.S., its sixth consecutive appearance. Pinnacle was also listed in Fortune magazine as the second best company to work for in the U.S. for women. American Banker recognized Pinnacle as one of America’s Best Banks to Work For nine years in a row and No. 1 among banks with more than $11 billion in assets in 2021.

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

The firm began operations in a single location in downtown Nashville, TN in October 2000 and has since grown to approximately $42.0 billion in assets as of Dec. 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, including as a result of the negative impact of inflationary pressures on our and BHG's customers and their businesses, resulting in significant increases in loan losses and provisions for those losses and, in the case of BHG, substitutions; (ii) fluctuations or differences in interest rates on loans or deposits from those that Pinnacle Financial is modeling or anticipating, including as a result of Pinnacle Bank's inability to better match deposit rates with the changes in the short-term rate environment, or that affect the yield curve; (iii) adverse conditions in the national or local economies including in Pinnacle Financial's markets throughout Tennessee, North Carolina, South Carolina, Georgia, Alabama, Virginia and Kentucky, particularly in commercial and residential real estate markets; (iv) 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; (v) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits, including during times when Pinnacle Bank is seeking to limit the rates it pays on deposits; (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 the negative impact to net interest margin from rising deposit and other funding costs; (ix) the results of regulatory examinations; (x) Pinnacle Financial's ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions; (xi) difficulties and delays in integrating acquired businesses or fully realizing costs savings and other benefits from acquisitions; (xii) BHG's ability to profitably grow its business and successfully execute on its business plans; (xiii) risks of expansion into new geographic or product markets; (xiv) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including goodwill or other intangible assets; (xv) the ineffectiveness of Pinnacle Bank's hedging strategies, or the unexpected counterparty failure or hedge failure of the underlying hedges; (xvi) 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; (xvii) deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xviii) 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; (xix) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xx) 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; (xxi) 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; (xxii) the risks associated with Pinnacle Bank being a minority investor in BHG, including the risk that the owners of a majority of the equity interests in BHG decide to sell the company or all or a portion of their ownership interests in BHG (triggering a similar sale by Pinnacle Bank); (xxiii) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, like BHG, including regulatory or legislative developments; (xxiv) fluctuations in the valuations of Pinnacle Financial's equity investments and the ultimate success of such investments; (xxv) the availability of and access to capital; (xxvi) 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 (xxvii) 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 and other matters for the accounting periods presented. This release also includes non-GAAP financial measures which exclude the impact of loans originated and forgiven and repaid 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)

December 31,

2022

September 30,

2022

December 31,

2021

ASSETS

 

 

 

Cash and noninterest-bearing due from banks

$

268,649

 

$

168,010

 

$

188,287

 

Restricted cash

 

31,447

 

 

18,636

 

 

82,505

 

Interest-bearing due from banks

 

877,286

 

 

1,616,878

 

 

3,830,747

 

Cash and cash equivalents

 

1,177,382

 

 

1,803,524

 

 

4,101,539

 

Securities purchased with agreement to resell

 

513,276

 

 

528,999

 

 

1,000,000

 

Securities available-for-sale, at fair value

 

3,558,870

 

 

3,542,601

 

 

4,914,194

 

Securities held-to-maturity (fair value of $2.7 billion, $2.5 billion, and $1.2 billion, net of allowance for credit losses of $1.6 million, $1.6 million and $161 at Dec. 31, 2022, Sept. 30, 2022 and Dec. 31, 2021, respectively)

 

3,079,050

 

 

2,938,417

 

 

1,155,958

 

Consumer loans held-for-sale

 

42,237

 

 

45,509

 

 

45,806

 

Commercial loans held-for-sale

 

21,093

 

 

15,413

 

 

17,685

 

Loans

 

29,041,605

 

 

27,711,694

 

 

23,414,262

 

Less allowance for credit losses

 

(300,665

)

 

(288,088

)

 

(263,233

)

Loans, net

 

28,740,940

 

 

27,423,606

 

 

23,151,029

 

Premises and equipment, net

 

327,885

 

 

320,273

 

 

288,182

 

Equity method investment

 

443,185

 

 

425,892

 

 

360,833

 

Accrued interest receivable

 

161,182

 

 

110,170

 

 

98,813

 

Goodwill

 

1,846,973

 

 

1,846,466

 

 

1,819,811

 

Core deposits and other intangible assets

 

34,555

 

 

35,666

 

 

33,819

 

Other real estate owned

 

7,952

 

 

7,787

 

 

8,537

 

Other assets

 

2,015,441

 

 

1,955,795

 

 

1,473,193

 

Total assets

$

41,970,021

 

$

41,000,118

 

$

38,469,399

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Deposits:

 

 

 

Noninterest-bearing

$

9,812,744

 

$

10,567,873

 

$

10,461,071

 

Interest-bearing

 

7,884,605

 

 

7,549,510

 

 

6,530,015

 

Savings and money market accounts

 

13,774,534

 

 

12,712,809

 

 

12,179,663

 

Time

 

3,489,355

 

 

2,859,857

 

 

2,133,784

 

Total deposits

 

34,961,238

 

 

33,690,049

 

 

31,304,533

 

Securities sold under agreements to repurchase

 

194,910

 

 

190,554

 

 

152,559

 

Federal Home Loan Bank advances

 

464,436

 

 

889,248

 

 

888,681

 

Subordinated debt and other borrowings

 

424,055

 

 

423,834

 

 

423,172

 

Accrued interest payable

 

19,478

 

 

10,202

 

 

12,504

 

Other liabilities

 

386,512

 

 

454,119

 

 

377,343

 

Total liabilities

 

36,450,629

 

 

35,658,006

 

 

33,158,792

 

Preferred stock, no par value, 10.0 million shares authorized; 225,000 shares non-cumulative perpetual preferred stock, Series B, liquidation preference $225.0 million, issued and outstanding at Dec. 31, 2022, Sept. 30, 2022 and Dec. 31, 2021, respectively

 

217,126

 

 

217,126

 

 

217,126

 

Common stock, par value $1.00; 180.0 million shares authorized; 76.5 million, 76.4 million and 76.1 million shares issued and outstanding at Dec. 31, 2022, Sept. 30, 2022, and Dec. 31, 2021, respectively

 

76,454

 

 

76,413

 

 

76,143

 

Additional paid-in capital

 

3,074,867

 

 

3,066,527

 

 

3,045,802

 

Retained earnings

 

2,341,706

 

 

2,224,736

 

 

1,864,350

 

Accumulated other comprehensive income (loss), net of taxes

 

(190,761

)

 

(242,690

)

 

107,186

 

Total stockholders' equity

 

5,519,392

 

 

5,342,112

 

 

5,310,607

 

Total liabilities and stockholders' equity

$

41,970,021

 

$

41,000,118

 

$

38,469,399

 

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED

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

Three months ended

Year ended

 

December 31,

2022

September 30,

2022

December 31,

2021

December 31,

2022

December 31,

2021

Interest income:

 

 

 

 

 

Loans, including fees

$

387,328

 

$

315,935

 

$

230,026

 

$

1,182,492

 

$

924,043

 

Securities

 

 

 

 

 

Taxable

 

25,086

 

 

18,204

 

 

9,696

 

 

67,063

 

 

34,769

 

Tax-exempt

 

22,770

 

 

21,408

 

 

16,931

 

 

81,522

 

 

64,848

 

Federal funds sold and other

 

15,994

 

 

16,217

 

 

2,540

 

 

42,858

 

 

7,554

 

Total interest income

 

451,178

 

 

371,764

 

 

259,193

 

 

1,373,935

 

 

1,031,214

 

Interest expense:

 

 

 

 

 

Deposits

 

120,499

 

 

55,189

 

 

10,648

 

 

204,119

 

 

54,116

 

Securities sold under agreements to repurchase

 

474

 

 

182

 

 

54

 

 

794

 

 

239

 

FHLB advances and other borrowings

 

10,745

 

 

10,609

 

 

9,728

 

 

39,729

 

 

44,458

 

Total interest expense

 

131,718

 

 

65,980

 

 

20,430

 

 

244,642

 

 

98,813

 

Net interest income

 

319,460

 

 

305,784

 

 

238,763

 

 

1,129,293

 

 

932,401

 

Provision for credit losses

 

24,805

 

 

27,493

 

 

2,675

 

 

67,925

 

 

16,126

 

Net interest income after provision for credit losses

 

294,655

 

 

278,291

 

 

236,088

 

 

1,061,368

 

 

916,275

 

Noninterest income:

 

 

 

 

 

Service charges on deposit accounts

 

11,123

 

 

10,906

 

 

12,663

 

 

44,675

 

 

41,311

 

Investment services

 

11,765

 

 

10,780

 

 

11,081

 

 

46,441

 

 

37,917

 

Insurance sales commissions

 

2,668

 

 

2,928

 

 

2,328

 

 

12,186

 

 

10,516

 

Gains (losses) on mortgage loans sold, net

 

(65

)

 

1,117

 

 

4,244

 

 

7,268

 

 

32,424

 

Investment gains on sales, net

 

 

 

217

 

 

393

 

 

156

 

 

759

 

Trust fees

 

5,767

 

 

5,706

 

 

5,926

 

 

23,511

 

 

20,724

 

Income from equity method investment

 

21,005

 

 

41,341

 

 

30,844

 

 

145,466

 

 

122,274

 

Other noninterest income

 

30,058

 

 

31,810

 

 

33,244

 

 

136,421

 

 

129,809

 

Total noninterest income

 

82,321

 

 

104,805

 

 

100,723

 

 

416,124

 

 

395,734

 

Noninterest expense:

 

 

 

 

 

Salaries and employee benefits

 

131,802

 

 

129,910

 

 

110,048

 

 

510,175

 

 

436,006

 

Equipment and occupancy

 

29,329

 

 

27,886

 

 

24,997

 

 

109,672

 

 

95,250

 

Other real estate, net

 

179

 

 

(90

)

 

37

 

 

280

 

 

(712

)

Marketing and other business development

 

7,579

 

 

4,958

 

 

4,562

 

 

21,073

 

 

12,888

 

Postage and supplies

 

2,682

 

 

2,795

 

 

2,191

 

 

10,168

 

 

8,195

 

Amortization of intangibles

 

1,937

 

 

1,951

 

 

2,057

 

 

7,810

 

 

8,518

 

Other noninterest expense

 

28,539

 

 

31,843

 

 

26,525

 

 

120,821

 

 

99,959

 

Total noninterest expense

 

202,047

 

 

199,253

 

 

170,417

 

 

779,999

 

 

660,104

 

Income before income taxes

 

174,929

 

 

183,843

 

 

166,394

 

 

697,493

 

 

651,905

 

Income tax expense

 

37,082

 

 

35,185

 

 

32,866

 

 

136,751

 

 

124,582

 

Net income

 

137,847

 

 

148,658

 

 

133,528

 

 

560,742

 

 

527,323

 

Preferred stock dividends

 

(3,798

)

 

(3,798

)

 

(3,798

)

 

(15,192

)

 

(15,192

)

Net income available to common shareholders

$

134,049

 

$

144,860

 

$

129,730

 

$

545,550

 

$

512,131

 

Per share information:

 

 

 

 

 

Basic net income per common share

$

1.77

 

$

1.91

 

$

1.72

 

$

7.20

 

$

6.79

 

Diluted net income per common share

$

1.76

 

$

1.91

 

$

1.71

 

$

7.17

 

$

6.75

 

Weighted average common shares outstanding:

 

 

 

 

 

Basic

 

75,771,828

 

 

75,761,930

 

 

75,523,052

 

 

75,735,404

 

 

75,468,339

 

Diluted

 

76,198,411

 

 

75,979,056

 

 

76,024,700

 

 

76,133,865

 

 

75,927,147

 

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

 

(dollars and shares in thousands)

Preferred

Stock

Amount

Common Stock

Additional Paid-

in Capital

Retained

Earnings

Accumulated Other

Comp. Income

(Loss), net

Total

Shareholders'

Equity

 

Shares

Amounts

Balance at December 31, 2020

$

217,126

75,850

 

$

75,850

 

$

3,028,063

 

$

1,407,723

 

$

175,849

 

$

4,904,611

 

Exercise of employee common stock options & related tax benefits

 

45

 

 

45

 

 

956

 

 

 

 

 

 

1,001

 

Preferred dividends paid ($67.52 per share)

 

 

 

 

 

 

 

(15,192

)

 

 

 

(15,192

)

Common dividends paid ($0.72 per share)

 

 

 

 

 

 

 

(55,504

)

 

 

 

(55,504

)

Issuance of restricted common shares, net of forfeitures

 

213

 

 

213

 

 

(213

)

 

 

 

 

 

 

Restricted shares withheld for taxes & related tax benefits

 

(53

)

 

(53

)

 

(4,078

)

 

 

 

 

 

(4,131

)

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

 

88

 

 

88

 

 

(3,878

)

 

 

 

 

 

(3,790

)

Compensation expense for restricted shares & performance stock units

 

 

 

 

 

24,952

 

 

 

 

 

 

24,952

 

Net income

 

 

 

 

 

 

 

527,323

 

 

 

 

527,323

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

(68,663

)

 

(68,663

)

Balance at December 31, 2021

$

217,126

76,143

 

$

76,143

 

$

3,045,802

 

$

1,864,350

 

$

107,186

 

$

5,310,607

 

 

 

 

 

 

 

 

 

Balance at December 31, 2021

$

217,126

76,143

 

$

76,143

 

$

3,045,802

 

$

1,864,350

 

$

107,186

 

$

5,310,607

 

Exercise of employee common stock options & related tax benefits

 

16

 

 

16

 

 

312

 

 

 

 

 

 

328

 

Preferred dividends paid ($67.52 per share)

 

 

 

 

 

 

 

(15,192

)

 

 

 

(15,192

)

Common dividends paid ($0.88 per share)

 

 

 

 

 

 

 

(68,194

)

 

 

 

(68,194

)

Issuance of restricted common shares, net of forfeitures

 

203

 

 

203

 

 

(203

)

 

 

 

 

 

 

Restricted shares withheld for taxes & related tax benefits

 

(51

)

 

(51

)

 

(4,991

)

 

 

 

 

 

(5,042

)

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

 

143

 

 

143

 

 

(5,605

)

 

 

 

 

 

(5,462

)

Compensation expense for restricted shares & performance stock units

 

 

 

 

 

39,552

 

 

 

 

 

 

39,552

 

Net income

 

 

 

 

 

 

 

560,742

 

 

 

 

560,742

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

(297,947

)

 

(297,947

)

Balance at December 31, 2022

$

217,126

76,454

 

$

76,454

 

$

3,074,867

 

$

2,341,706

 

$

(190,761

)

$

5,519,392

 

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

 

 

 

 

 

 

(dollars in thousands)

December

September

June

March

December

September

2022

2022

2022

2022

2021

2021

Balance sheet data, at quarter end:

 

 

 

 

 

 

Commercial and industrial loans

$

10,233,395

 

9,738,271

 

9,244,708

 

8,213,204

 

7,703,428

 

7,079,431

 

Commercial real estate - owner occupied loans

 

3,587,257

 

3,426,271

 

3,243,018

 

3,124,275

 

3,048,822

 

2,954,519

 

Commercial real estate - investment loans

 

5,277,454

 

5,122,127

 

4,909,598

 

4,707,761

 

4,607,048

 

4,597,736

 

Commercial real estate - multifamily and other loans

 

1,265,165

 

1,042,854

 

951,998

 

718,822

 

614,656

 

621,471

 

Consumer real estate - mortgage loans

 

4,435,046

 

4,271,913

 

4,047,051

 

3,813,252

 

3,680,684

 

3,540,439

 

Construction and land development loans

 

3,679,498

 

3,548,970

 

3,386,866

 

3,277,029

 

2,903,017

 

3,096,961

 

Consumer and other loans

 

555,823

 

550,565

 

498,757

 

487,499

 

485,489

 

459,182

 

Paycheck protection program loans

 

7,967

 

10,723

 

51,100

 

157,180

 

371,118

 

708,722

 

Total loans

 

29,041,605

 

27,711,694

 

26,333,096

 

24,499,022

 

23,414,262

 

23,058,461

 

Allowance for credit losses

 

(300,665

)

(288,088

)

(272,483

)

(261,618

)

(263,233

)

(268,635

)

Securities

 

6,637,920

 

6,481,018

 

6,553,893

 

6,136,109

 

6,070,152

 

5,623,890

 

Total assets

 

41,970,021

 

41,000,118

 

40,121,292

 

39,400,378

 

38,469,399

 

36,523,936

 

Noninterest-bearing deposits

 

9,812,744

 

10,567,873

 

11,058,198

 

10,986,194

 

10,461,071

 

9,809,691

 

Total deposits

 

34,961,238

 

33,690,049

 

32,595,303

 

32,295,814

 

31,304,533

 

29,369,807

 

Securities sold under agreements to repurchase

 

194,910

 

190,554

 

199,585

 

219,530

 

152,559

 

148,240

 

FHLB advances

 

464,436

 

889,248

 

1,289,059

 

888,870

 

888,681

 

888,493

 

Subordinated debt and other borrowings

 

424,055

 

423,834

 

423,614

 

423,319

 

423,172

 

542,712

 

Total stockholders' equity

 

5,519,392

 

5,342,112

 

5,315,239

 

5,280,950

 

5,310,607

 

5,191,798

 

Balance sheet data, quarterly averages:

 

 

 

 

 

 

Total loans

$

28,402,197

 

27,021,031

 

25,397,389

 

23,848,533

 

23,225,735

 

22,986,835

 

Securities

 

6,537,262

 

6,542,026

 

6,446,774

 

6,143,664

 

5,813,636

 

5,451,232

 

Federal funds sold and other

 

1,828,588

 

2,600,978

 

2,837,679

 

4,799,946

 

4,356,113

 

3,743,074

 

Total earning assets

 

36,768,047

 

36,164,035

 

34,681,842

 

34,792,143

 

33,395,484

 

32,181,141

 

Total assets

 

41,324,251

 

40,464,649

 

38,780,786

 

38,637,221

 

37,132,078

 

35,896,130

 

Noninterest-bearing deposits

 

10,486,233

 

10,926,069

 

10,803,439

 

10,478,403

 

10,240,393

 

9,247,382

 

Total deposits

 

34,177,281

 

33,108,415

 

31,484,100

 

31,538,985

 

30,034,026

 

28,739,871

 

Securities sold under agreements to repurchase

 

199,610

 

215,646

 

216,846

 

179,869

 

141,781

 

164,837

 

FHLB advances

 

701,813

 

1,010,865

 

1,095,531

 

888,746

 

888,559

 

888,369

 

Subordinated debt and other borrowings

 

427,503

 

426,267

 

427,191

 

441,755

 

484,389

 

586,387

 

Total stockholders' equity

 

5,433,274

 

5,403,244

 

5,316,219

 

5,331,405

 

5,262,586

 

5,176,625

 

Statement of operations data, for the three months ended:

Interest income

$

451,178

 

371,764

 

292,376

 

258,617

 

259,193

 

260,868

 

Interest expense

 

131,718

 

65,980

 

27,802

 

19,142

 

20,430

 

23,325

 

Net interest income

 

319,460

 

305,784

 

264,574

 

239,475

 

238,763

 

237,543

 

Provision for credit losses

 

24,805

 

27,493

 

12,907

 

2,720

 

2,675

 

3,382

 

Net interest income after provision for credit losses

 

294,655

 

278,291

 

251,667

 

236,755

 

236,088

 

234,161

 

Noninterest income

 

82,321

 

104,805

 

125,502

 

103,496

 

100,723

 

104,095

 

Noninterest expense

 

202,047

 

199,253

 

196,038

 

182,661

 

170,417

 

168,851

 

Income before taxes

 

174,929

 

183,843

 

181,131

 

157,590

 

166,394

 

169,405

 

Income tax expense

 

37,082

 

35,185

 

36,004

 

28,480

 

32,866

 

32,828

 

Net income

 

137,847

 

148,658

 

145,127

 

129,110

 

133,528

 

136,577

 

Preferred stock dividends

 

(3,798

)

(3,798

)

(3,798

)

(3,798

)

(3,798

)

(3,798

)

Net income available to common shareholders

$

134,049

 

144,860

 

141,329

 

125,312

 

129,730

 

132,779

 

Profitability and other ratios:

 

 

 

 

 

 

Return on avg. assets (1)

 

1.29

%

1.42

%

1.46

%

1.32

%

1.39

%

1.47

%

Return on avg. equity (1)

 

9.79

%

10.64

%

10.66

%

9.53

%

9.78

%

10.18

%

Return on avg. common equity (1)

 

10.20

%

11.08

%

11.12

%

9.94

%

10.20

%

10.62

%

Return on avg. tangible common equity (1)

 

15.95

%

17.40

%

17.62

%

15.63

%

16.13

%

16.98

%

Common stock dividend payout ratio (15)

 

12.26

%

12.34

%

12.63

%

12.94

%

10.65

%

11.13

%

Net interest margin (2)

 

3.60

%

3.47

%

3.17

%

2.89

%

2.96

%

3.03

%

Noninterest income to total revenue (3)

 

20.49

%

25.53

%

32.17

%

30.18

%

29.67

%

30.47

%

Noninterest income to avg. assets (1)

 

0.79

%

1.03

%

1.30

%

1.09

%

1.08

%

1.15

%

Noninterest exp. to avg. assets (1)

 

1.94

%

1.95

%

2.03

%

1.92

%

1.82

%

1.87

%

Efficiency ratio (4)

 

50.29

%

48.53

%

50.26

%

53.26

%

50.20

%

49.42

%

Avg. loans to avg. deposits

 

83.10

%

81.61

%

80.67

%

75.62

%

77.33

%

79.98

%

Securities to total assets

 

15.82

%

15.81

%

16.34

%

15.57

%

15.78

%

15.40

%

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

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

 

 

 

 

(dollars in thousands)

Three months ended

 

Three months ended

December 31, 2022

 

December 31, 2021

 

Average

Balances

Interest

Rates/

Yields

 

Average

Balances

Interest

Rates/

Yields

Interest-earning assets

 

 

 

 

 

 

 

Loans (1) (2)

$

28,402,197

$

387,328

5.54

%

 

$

23,225,735

$

230,026

4.04

%

Securities

 

 

 

 

 

 

 

Taxable

 

3,421,072

 

25,086

2.91

%

 

 

3,112,605

 

9,696

1.24

%

Tax-exempt (2)

 

3,116,190

 

22,770

3.49

%

 

 

2,701,031

 

16,931

3.04

%

Interest-bearing due from banks

 

1,117,468

 

10,626

3.77

%

 

 

3,481,902

 

1,402

0.16

%

Resell agreements

 

521,787

 

3,432

2.61

%

 

 

706,522

 

598

0.34

%

Federal funds sold

 

 

%

 

 

 

%

Other

 

189,333

 

1,936

4.06

%

 

 

167,689

 

540

1.28

%

Total interest-earning assets

 

36,768,047

$

451,178

5.02

%

 

 

33,395,484

$

259,193

3.20

%

Nonearning assets

 

 

 

 

 

 

 

Intangible assets

 

1,881,597

 

 

 

 

1,854,963

 

 

Other nonearning assets

 

2,674,607

 

 

 

 

1,881,631

 

 

Total assets

$

41,324,251

 

 

 

$

37,132,078

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

Interest checking

 

7,262,128

 

36,808

2.01

%

 

 

5,799,700

 

2,427

0.17

%

Savings and money market

 

13,337,326

 

68,677

2.04

%

 

 

11,777,899

 

5,153

0.17

%

Time

 

3,091,594

 

15,014

1.93

%

 

 

2,216,034

 

3,068

0.55

%

Total interest-bearing deposits

 

23,691,048

 

120,499

2.02

%

 

 

19,793,633

 

10,648

0.21

%

Securities sold under agreements to repurchase

 

199,610

 

474

0.94

%

 

 

141,781

 

54

0.15

%

Federal Home Loan Bank advances

 

701,813

 

5,380

3.04

%

 

 

888,559

 

4,558

2.04

%

Subordinated debt and other borrowings

 

427,503

 

5,365

4.98

%

 

 

484,389

 

5,170

4.23

%

Total interest-bearing liabilities

 

25,019,974

 

131,718

2.09

%

 

 

21,308,362

 

20,430

0.38

%

Noninterest-bearing deposits

 

10,486,233

 

 

 

 

10,240,393

 

 

Total deposits and interest-bearing liabilities

 

35,506,207

$

131,718

1.47

%

 

 

31,548,755

$

20,430

0.26

%

Other liabilities

 

384,770

 

 

 

 

320,737

 

 

Stockholders' equity

 

5,433,274

 

 

 

 

5,262,586

 

 

Total liabilities and stockholders' equity

$

41,324,251

 

 

 

$

37,132,078

 

 

Net interest income

 

$

319,460

 

 

 

$

238,763

 

Net interest spread (3)

 

 

2.93

%

 

 

 

2.82

%

Net interest margin (4)

 

 

3.60

%

 

 

 

2.96

%

 

 

 

 

 

 

 

 

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

(2) Yields computed on tax-exempt instruments on a tax equivalent basis and included $14.1 million of taxable equivalent income for the three months ended December 31, 2022 compared to $10.1 million for the three months ended December 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 December 31, 2022 would have been 3.55% compared to a net interest spread of 2.94% for the three months ended December 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

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

 

 

 

 

(dollars in thousands)

Year ended

 

Year ended

December 31, 2022

 

December 31, 2021

 

Average

Balances

Interest

Rates/

Yields

 

Average

Balances

Interest

Rates/

Yields

Interest-earning assets

 

 

 

 

 

 

 

Loans (1) (2)

$

26,182,102

$

1,182,492

4.62

%

 

$

23,060,949

$

924,043

4.09

%

Securities

 

 

 

 

 

 

 

Taxable

 

3,405,346

 

67,063

1.97

%

 

 

2,711,044

 

34,769

1.28

%

Tax-exempt (2)

 

3,013,505

 

81,522

3.26

%

 

 

2,534,653

 

64,848

3.09

%

Interest-bearing due from banks

 

1,815,251

 

23,206

1.28

%

 

 

3,056,555

 

3,853

0.13

%

Resell agreements

 

1,010,443

 

14,106

1.40

%

 

 

426,027

 

1,440

0.34

%

Federal funds sold

 

 

%

 

 

9,964

 

%

Other

 

181,824

 

5,546

3.05

%

 

 

160,066

 

2,261

1.41

%

Total interest-earning assets

 

35,608,471

$

1,373,935

3.98

%

 

 

31,959,258

$

1,031,214

3.33

%

Nonearning assets

 

 

 

 

 

 

 

Intangible assets

 

1,877,870

 

 

 

 

1,858,119

 

 

Other nonearning assets

 

2,324,564

 

 

 

 

1,875,255

 

 

Total assets

$

39,810,905

 

 

 

$

35,692,632

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

Interest checking

 

6,737,026

 

63,549

0.94

%

 

 

5,578,632

 

9,887

0.18

%

Savings and money market

 

12,695,974

 

112,218

0.88

%

 

 

11,437,779

 

22,823

0.20

%

Time

 

2,478,629

 

28,352

1.14

%

 

 

2,682,315

 

21,406

0.80

%

Total interest-bearing deposits

 

21,911,629

 

204,119

0.93

%

 

 

19,698,726

 

54,116

0.27

%

Securities sold under agreements to repurchase

 

203,082

 

794

0.39

%

 

 

155,888

 

239

0.15

%

Federal Home Loan Bank advances

 

923,964

 

20,848

2.26

%

 

 

899,785

 

18,111

2.01

%

Subordinated debt and other borrowings

 

429,169

 

18,881

4.40

%

 

 

604,081

 

26,347

4.36

%

Total interest-bearing liabilities

 

23,467,844

 

244,642

1.04

%

 

 

21,358,480

 

98,813

0.46

%

Noninterest-bearing deposits

 

10,674,249

 

 

 

 

8,910,349

 

 

Total deposits and interest-bearing liabilities

 

34,142,093

$

244,642

0.72

%

 

 

30,268,829

$

98,813

0.33

%

Other liabilities

 

297,409

 

 

 

 

314,650

 

 

Stockholders' equity

 

5,371,403

 

 

 

 

5,109,153

 

 

Total liabilities and stockholders' equity

$

39,810,905

 

 

 

$

35,692,632

 

 

Net interest income

 

$

1,129,293

 

 

 

$

932,401

 

Net interest spread (3)

 

 

2.94

%

 

 

 

2.87

%

Net interest margin (4)

 

 

3.29

%

 

 

 

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 $43.0 million of taxable equivalent income for the year ended December 31, 2022 compared to $33.8 million for the year ended December 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 year ended December 31, 2022 would have been 3.26% compared to a net interest spread of 3.01% for the year ended December 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)

December

September

June

March

December

September

2022

2022

2022

2022

2021

2021

Asset quality information and ratios:

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

Nonaccrual loans

$

38,116

 

34,115

 

15,459

 

26,616

 

31,569

 

46,692

 

ORE and other nonperforming assets (NPAs)

 

7,952

 

7,787

 

8,237

 

8,437

 

8,537

 

8,415

 

Total nonperforming assets

$

46,068

 

41,902

 

23,696

 

35,053

 

40,106

 

55,107

 

Past due loans over 90 days and still accruing interest

$

4,406

 

6,757

 

3,840

 

1,605

 

1,607

 

1,914

 

Accruing troubled debt restructurings (5)

$

2,193

 

2,228

 

2,279

 

2,317

 

2,354

 

2,397

 

Accruing purchase credit deteriorated loans

$

8,060

 

8,759

 

9,194

 

12,661

 

13,086

 

12,158

 

Net loan charge-offs

$

11,729

 

10,983

 

877

 

2,958

 

8,077

 

9,281

 

Allowance for credit losses to nonaccrual loans

 

788.8

%

844.5

%

1,762.6

%

982.9

%

833.8

%

575.3

%

As a percentage of total loans:

 

 

 

 

 

 

Past due accruing loans over 30 days

 

0.15

%

0.13

%

0.11

%

0.11

%

0.09

%

0.09

%

Potential problem loans

 

0.19

%

0.21

%

0.32

%

0.41

%

0.47

%

0.60

%

Allowance for credit losses

 

1.04

%

1.04

%

1.03

%

1.07

%

1.12

%

1.17

%

Nonperforming assets to total loans, ORE and other NPAs

 

0.16

%

0.15

%

0.09

%

0.14

%

0.17

%

0.24

%

Classified asset ratio (Pinnacle Bank) (7)

 

2.4

%

2.6

%

2.9

%

3.6

%

4.1

%

5.6

%

Annualized net loan charge-offs to avg. loans (6)

 

0.17

%

0.16

%

0.01

%

0.05

%

0.14

%

0.16

%

 

 

 

 

 

 

 

Interest rates and yields:

 

 

 

 

 

 

Loans

 

5.54

%

4.73

%

4.07

%

3.94

%

4.04

%

4.13

%

Securities

 

3.19

%

2.66

%

2.29

%

2.12

%

2.08

%

2.04

%

Total earning assets

 

5.02

%

4.20

%

3.49

%

3.11

%

3.20

%

3.32

%

Total deposits, including non-interest bearing

 

1.40

%

0.66

%

0.23

%

0.13

%

0.14

%

0.17

%

Securities sold under agreements to repurchase

 

0.94

%

0.34

%

0.15

%

0.13

%

0.15

%

0.14

%

FHLB advances

 

3.04

%

2.26

%

1.92

%

2.04

%

2.04

%

2.04

%

Subordinated debt and other borrowings

 

4.98

%

4.51

%

4.04

%

4.00

%

4.23

%

4.45

%

Total deposits and interest-bearing liabilities

 

1.47

%

0.75

%

0.34

%

0.23

%

0.26

%

0.30

%

 

 

 

 

 

 

 

Capital and other ratios (7):

 

 

 

 

 

 

Pinnacle Financial ratios:

 

 

 

 

 

 

Stockholders' equity to total assets

 

13.2

%

13.0

%

13.2

%

13.4

%

13.8

%

14.2

%

Common equity Tier one

 

10.0

%

10.0

%

10.2

%

10.5

%

10.9

%

10.5

%

Tier one risk-based

 

10.5

%

10.7

%

10.9

%

11.2

%

11.7

%

11.3

%

Total risk-based

 

12.4

%

12.6

%

12.9

%

13.3

%

13.8

%

14.0

%

Leverage

 

9.7

%

9.7

%

9.8

%

9.5

%

9.7

%

9.3

%

Tangible common equity to tangible assets

 

8.5

%

8.3

%

8.4

%

8.5

%

8.8

%

9.0

%

Pinnacle Bank ratios:

 

 

 

 

 

 

Common equity Tier one

 

10.9

%

11.1

%

11.0

%

11.4

%

11.9

%

11.7

%

Tier one risk-based

 

10.9

%

11.1

%

11.0

%

11.4

%

11.9

%

11.7

%

Total risk-based

 

11.6

%

11.8

%

11.7

%

12.1

%

12.6

%

12.5

%

Leverage

 

10.1

%

10.1

%

9.9

%

9.6

%

9.9

%

9.7

%

Construction and land development loans

as a percentage of total capital (18)

 

85.9

%

85.4

%

87.4

%

87.4

%

79.1

%

89.3

%

Non-owner occupied commercial real estate and

multi-family as a percentage of total capital (18)

 

249.6

%

244.0

%

250.2

%

243.7

%

234.1

%

252.4

%

 

 

 

 

 

 

 

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

 

 

 

 

 

 

 

(dollars in thousands, except per share data)

 

December

September

June

March

December

September

 

2022

2022

2022

2022

2021

2021

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

Earnings per common share – basic

$

1.77

 

1.91

 

1.87

 

1.66

 

1.72

 

1.76

 

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

$

1.77

 

1.91

 

1.87

 

1.66

 

1.71

 

1.76

 

Earnings per common share – diluted

$

1.76

 

1.91

 

1.86

 

1.65

 

1.71

 

1.75

 

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

$

1.76

 

1.91

 

1.86

 

1.65

 

1.70

 

1.75

 

Common dividends per share

$

0.22

 

0.22

 

0.22

 

0.22

 

0.18

 

0.18

 

Book value per common share at quarter end (8)

$

69.35

 

67.07

 

66.74

 

66.30

 

66.89

 

65.36

 

Tangible book value per common share at quarter end (8)

$

44.74

 

42.44

 

42.08

 

41.65

 

42.55

 

40.98

 

Revenue per diluted common share

$

5.27

 

5.40

 

5.14

 

4.52

 

4.47

 

4.50

 

Revenue per diluted common share, excluding non-GAAP adjustments

$

5.27

 

5.40

 

5.14

 

4.52

 

4.46

 

4.50

 

 

 

 

 

 

 

 

 

Investor information:

 

 

 

 

 

 

 

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

$

73.40

 

81.10

 

72.31

 

92.08

 

95.50

 

94.08

 

High closing sales price of common stock during quarter

$

87.81

 

87.66

 

91.42

 

110.41

 

104.72

 

98.00

 

Low closing sales price of common stock during quarter

$

70.74

 

68.68

 

68.56

 

90.46

 

90.20

 

83.84

 

 

 

 

 

 

 

 

 

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

$

25.35

 

25.33

 

25.19

 

26.72

 

28.21

 

28.14

 

High closing sales price of depositary shares during quarter

$

25.60

 

26.23

 

26.44

 

28.53

 

28.99

 

29.23

 

Low closing sales price of depositary shares during quarter

$

23.11

 

24.76

 

24.75

 

25.63

 

27.42

 

28.00

 

 

 

 

 

 

 

 

 

Other information:

 

 

 

 

 

 

 

Residential mortgage loan sales:

 

 

 

 

 

 

 

Gross loans sold

$

134,514

 

181,139

 

239,736

 

270,793

 

352,342

 

347,664

 

Gross fees (9)

$

3,149

 

3,189

 

6,523

 

5,700

 

10,098

 

11,215

 

Gross fees as a percentage of loans originated

 

2.34

%

1.76

%

2.72

%

2.11

%

2.87

%

3.23

%

Net gain (loss) on residential mortgage loans sold

$

(65

)

1,117

 

2,150

 

4,066

 

4,244

 

7,814

 

Investment gains (losses) on sales of securities, net (14)

$

 

217

 

 

(61

)

393

 

 

Brokerage account assets, at quarter end (10)

$

8,049,125

 

7,220,405

 

6,761,480

 

7,158,939

 

7,187,085

 

6,597,152

 

Trust account managed assets, at quarter end

$

4,560,752

 

4,162,639

 

4,207,406

 

4,499,911

 

4,720,290

 

4,155,510

 

Core deposits (11)

$

31,301,077

 

30,748,817

 

30,011,444

 

30,398,683

 

29,316,911

 

27,170,367

 

Core deposits to total funding (11)

 

86.9

%

87.4

%

87.0

%

89.9

%

89.5

%

87.8

%

Risk-weighted assets

$

36,216,901

 

35,281,315

 

33,366,074

 

31,170,258

 

29,349,534

 

27,945,624

 

Number of offices

 

123

 

120

 

119

 

119

 

118

 

117

 

Total core deposits per office

$

254,480

 

256,240

 

252,197

 

255,451

 

248,448

 

232,225

 

Total assets per full-time equivalent employee

$

12,948

 

12,875

 

13,052

 

13,186

 

13,541

 

13,188

 

Annualized revenues per full-time equivalent employee

$

491.8

 

511.5

 

509.0

 

465.5

 

474.1

 

489.4

 

Annualized expenses per full-time equivalent employee

$

247.3

 

248.2

 

255.8

 

247.9

 

238.0

 

241.9

 

Number of employees (full-time equivalent)

 

3,241.5

 

3,184.5

 

3,074.0

 

2,988.0

 

2,841.0

 

2,769.5

 

Associate retention rate (12)

 

93.8

%

93.6

%

93.3

%

93.1

%

93.4

%

93.4

%

 

 

 

 

 

 

 

 

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

 

 

 

RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

 

 

 

Three months ended

 

Year ended

(dollars in thousands, except per share data)

December

September

December

 

December

December

2022

2022

2021

 

2022

2021

 

 

 

 

 

 

 

Net interest income

$

319,460

 

305,784

 

238,763

 

 

1,129,293

 

932,401

 

 

 

 

 

 

 

 

Noninterest income

 

82,321

 

104,805

 

100,723

 

 

416,124

 

395,734

 

Total revenues

 

401,781

 

410,589

 

339,486

 

 

1,545,417

 

1,328,135

 

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

 

 

(217

)

(393

)

 

(156

)

(759

)

Total revenues excluding the impact of adjustments noted above

$

401,781

 

410,372

 

339,093

 

 

1,545,261

 

1,327,376

 

 

 

 

 

 

 

 

Noninterest expense

$

202,047

 

199,253

 

170,417

 

 

779,999

 

660,104

 

Less: ORE expense (benefit)

 

179

 

(90

)

37

 

 

280

 

(712

)

Noninterest expense excluding the impact of adjustments noted above

$

201,868

 

199,343

 

170,380

 

 

779,719

 

660,816

 

 

 

 

 

 

 

 

Pre-tax income

$

174,929

 

183,843

 

166,394

 

 

697,493

 

651,905

 

Provision for credit losses

 

24,805

 

27,493

 

2,675

 

 

67,925

 

16,126

 

Pre-tax pre-provision net revenue

 

199,734

 

211,336

 

169,069

 

 

765,418

 

668,031

 

Adjustments noted above

 

179

 

(307

)

(356

)

 

124

 

(1,471

)

Adjusted pre-tax pre-provision net revenue (13)

$

199,913

 

211,029

 

168,713

 

 

765,542

 

666,560

 

 

 

 

 

 

 

 

Noninterest income

$

82,321

 

104,805

 

100,723

 

 

416,124

 

395,734

 

Less: Adjustments as noted above

 

 

(217

)

(393

)

 

(156

)

(759

)

Noninterest income excluding the impact of adjustments noted above

$

82,321

 

104,588

 

100,330

 

 

415,968

 

394,975

 

 

 

 

 

 

 

 

Efficiency ratio (4)

 

50.29

%

48.53

%

50.20

%

 

50.47

%

49.70

%

Adjustments as noted above

 

(0.05

) %

0.05

%

0.05

%

 

(0.01

) %

0.08

%

Efficiency ratio (excluding adjustments noted above) (4)

 

50.24

%

48.58

%

50.25

%

 

50.46

%

49.78

%

 

 

 

 

 

 

 

Total average assets

$

41,324,251

 

40,464,649

 

37,132,078

 

 

39,810,905

 

35,692,632

 

 

 

 

 

 

 

 

Noninterest income to average assets (1)

 

0.79

%

1.03

%

1.08

%

 

1.05

%

1.11

%

Adjustments as noted above

 

%

%

(0.01

) %

 

(0.01

) %

%

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

 

0.79

%

1.03

%

1.07

%

 

1.04

%

1.11

%

 

 

 

 

 

 

 

Noninterest expense to average assets (1)

 

1.94

%

1.95

%

1.82

%

 

1.96

%

1.85

%

Adjustments as noted above

 

%

%

%

 

%

%

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

 

1.94

%

1.95

%

1.82

%

 

1.96

%

1.85

%

 

 

 

 

 

 

 

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

 

RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

 

Three months ended

(dollars in thousands, except per share data)

December

September

June

March

December

September

2022

2022

2022

2022

2021

2021

Net income available to common shareholders

$

134,049

 

144,860

 

141,329

 

125,312

 

129,730

 

132,779

 

Investment (gains) losses on sales of securities, net

 

 

(217

)

 

61

 

(393

)

 

ORE expense (benefit)

 

179

 

(90

)

86

 

105

 

37

 

(79

)

Tax effect on adjustments noted above (17)

 

(47

)

80

 

(22

)

(43

)

93

 

21

 

Net income available to common shareholders excluding adjustments noted above

$

134,181

 

144,633

 

141,393

 

125,435

 

129,467

 

132,721

 

 

 

 

 

 

 

 

Basic earnings per common share

$

1.77

 

1.91

 

1.87

 

1.66

 

1.72

 

1.76

 

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

 

 

 

 

 

(0.01

)

 

Adjustment due to ORE expense (benefit)

 

 

 

 

 

 

 

Adjustment due to tax effect on adjustments noted above (17)

 

 

 

 

 

 

 

Basic earnings per common share excluding adjustments noted above

$

1.77

 

1.91

 

1.87

 

1.66

 

1.71

 

1.76

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

1.76

 

1.91

 

1.86

 

1.65

 

1.71

 

1.75

 

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

 

 

 

 

 

(0.01

)

 

Adjustment due to ORE expense (benefit)

 

 

 

 

 

 

 

Adjustment due to tax effect on adjustments noted above (17)

 

 

 

 

 

 

 

Diluted earnings per common share excluding the adjustments noted above

$

1.76

 

1.91

 

1.86

 

1.65

 

1.70

 

1.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue per diluted common share

$

5.27

 

5.40

 

5.14

 

4.52

 

4.47

 

4.50

 

Adjustments as noted above

 

 

 

 

 

(0.01

)

 

Revenue per diluted common share excluding adjustments noted above

$

5.27

 

5.40

 

5.14

 

4.52

 

4.46

 

4.50

 

 

 

 

 

 

 

 

Book value per common share at quarter end (8)

$

69.35

 

67.07

 

66.74

 

66.30

 

66.89

 

65.36

 

Adjustment due to goodwill, core deposit and other intangible assets

 

(24.61

)

(24.63

)

(24.66

)

(24.65

)

(24.34

)

(24.38

)

Tangible book value per common share at quarter end (8)

$

44.74

 

42.44

 

42.08

 

41.65

 

42.55

 

40.98

 

 

 

 

 

 

 

 

Paycheck Protection Program (PPP)

 

 

 

 

 

 

PPP net interest income

$

72

 

755

 

4,060

 

10,690

 

15,131

 

20,420

 

Income tax expense at statutory rates (17)

 

19

 

197

 

1,061

 

2,794

 

3,955

 

5,338

 

Earnings attributable to PPP

 

53

 

558

 

2,999

 

7,896

 

11,176

 

15,082

 

 

 

 

 

 

 

 

Basic earnings per common share attributable to PPP

$

 

0.01

 

0.04

 

0.10

 

0.15

 

0.20

 

Diluted earnings per common share attributable to PPP

$

 

0.01

 

0.04

 

0.10

 

0.15

 

0.20

 

 

 

 

 

 

 

 

Equity method investment (16)

 

 

 

 

 

 

Fee income from BHG, net of amortization

$

21,005

 

41,341

 

49,465

 

33,655

 

30,844

 

30,409

 

Funding cost to support investment

 

4,586

 

3,891

 

1,998

 

666

 

388

 

379

 

Pre-tax impact of BHG

 

16,419

 

37,450

 

47,467

 

32,989

 

30,456

 

30,030

 

Income tax expense at statutory rates (17)

 

4,292

 

9,789

 

12,408

 

8,623

 

7,961

 

7,850

 

Earnings attributable to BHG

$

12,127

 

27,661

 

35,059

 

24,366

 

22,495

 

22,180

 

 

 

 

 

 

 

 

Basic earnings per common share attributable to BHG

$

0.16

 

0.37

 

0.46

 

0.32

 

0.30

 

0.29

 

Diluted earnings per common share attributable to BHG

$

0.16

 

0.36

 

0.46

 

0.32

 

0.30

 

0.29

 

 

 

 

 

 

 

 

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

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

 

 

 

RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

 

 

 

 

Year ended

(dollars in thousands, except per share data)

 

December 31,

 

2022

2021

Net income available to common shareholders

 

$

545,550

 

512,131

 

Investment (gains) losses on sales of securities, net

 

 

(156

)

(759

)

ORE expense (benefit)

 

 

280

 

(712

)

Tax effect on adjustments noted above (17)

 

 

(32

)

385

 

Net income available to common shareholders excluding adjustments noted above

 

$

545,642

 

511,045

 

 

 

 

 

Basic earnings per common share

 

$

7.20

 

6.79

 

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

 

 

 

(0.01

)

Adjustment due to ORE expense (benefit)

 

 

 

(0.01

)

Adjustment due to tax effect on adjustments noted above (17)

 

 

 

 

Basic earnings per common share excluding adjustments noted above

 

$

7.20

 

6.77

 

 

 

 

 

Diluted earnings per common share

 

 

7.17

 

6.75

 

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

 

 

 

(0.01

)

Adjustment due to ORE expense (benefit)

 

 

 

(0.01

)

Adjustment due to tax effect on adjustments noted above (17)

 

 

 

 

Diluted earnings per common share excluding the adjustments noted above

 

$

7.17

 

6.73

 

 

 

 

 

 

 

 

 

Revenue per diluted common share

 

$

20.30

 

17.49

 

Adjustments as noted above

 

 

 

(0.01

)

Revenue per diluted common share excluding adjustments noted above

 

$

20.30

 

17.48

 

 

 

 

 

Paycheck Protection Program (PPP)

 

 

 

PPP net interest income

 

 

15,577

 

81,431

 

Income tax expense at statutory rates (17)

 

 

4,072

 

21,286

 

Earnings attributable to PPP

 

$

11,505

 

60,145

 

 

 

 

 

Basic earnings per common share attributable to PPP

 

$

0.15

 

0.80

 

Diluted earnings per common share attributable to PPP

 

$

0.15

 

0.79

 

 

 

 

 

Equity method investment (16)

 

 

 

Fee income from BHG, net of amortization

 

$

145,466

 

122,274

 

Funding cost to support investment

 

 

11,141

 

3,202

 

Pre-tax impact of BHG

 

 

134,325

 

119,072

 

Income tax expense at statutory rates (17)

 

 

35,113

 

31,125

 

Earnings attributable to BHG

 

$

99,212

 

87,947

 

 

 

 

 

Basic earnings per common share attributable to BHG

 

$

1.31

 

1.17

 

Diluted earnings per common share attributable to BHG

 

$

1.30

 

1.16

 

 

 

 

 

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

 

 

 

 

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

 

 

 

RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

Three months ended

 

Year ended

(dollars in thousands, except per share data)

December

September

December

 

December

December

2022

2022

2021

 

2022

2021

 

 

 

 

 

 

 

Return on average assets (1)

 

1.29

%

1.42

%

1.39

%

 

 

1.37

%

1.43

%

Adjustments as noted above

 

%

%

(0.01

) %

 

 

%

%

Return on average assets excluding adjustments noted above (1)

 

1.29

%

1.42

%

1.38

%

 

 

1.37

%

1.43

%

 

 

 

 

 

 

 

Tangible assets:

 

 

 

 

 

 

Total assets

$

41,970,021

 

41,000,118

 

38,469,399

 

 

$

41,970,021

 

38,469,399

 

Less: Goodwill

 

(1,846,973

)

(1,846,466

)

(1,819,811

)

 

 

(1,846,973

)

(1,819,811

)

Core deposit and other intangible assets

 

(34,555

)

(35,666

)

(33,819

)

 

 

(34,555

)

(33,819

)

Net tangible assets

$

40,088,493

 

39,117,986

 

36,615,769

 

 

$

40,088,493

 

36,615,769

 

 

 

 

 

 

 

 

Tangible common equity:

 

 

 

 

 

 

Total stockholders' equity

$

5,519,392

 

5,342,112

 

5,310,607

 

 

$

5,519,392

 

5,310,607

 

Less: Preferred stockholders' equity

 

(217,126

)

(217,126

)

(217,126

)

 

 

(217,126

)

(217,126

)

Total common stockholders' equity

 

5,302,266

 

5,124,986

 

5,093,481

 

 

 

5,302,266

 

5,093,481

 

Less: Goodwill

 

(1,846,973

)

(1,846,466

)

(1,819,811

)

 

 

(1,846,973

)

(1,819,811

)

Core deposit and other intangible assets

 

(34,555

)

(35,666

)

(33,819

)

 

 

(34,555

)

(33,819

)

Net tangible common equity

$

3,420,738

 

3,242,854

 

3,239,851

 

 

$

3,420,738

 

3,239,851

 

 

 

 

 

 

 

 

Ratio of tangible common equity to tangible assets

 

8.53

%

8.29

%

8.85

%

 

 

8.53

%

8.85

%

 

 

 

 

 

 

 

Average tangible assets:

 

 

 

 

 

 

Average assets

$

41,324,251

 

40,464,649

 

37,132,078

 

 

$

39,810,905

 

35,692,632

 

Less: Average goodwill

 

(1,846,471

)

(1,846,466

)

(1,819,811

)

 

 

(1,843,708

)

(1,819,811

)

Average core deposit and other intangible assets

 

(35,126

)

(36,884

)

(35,152

)

 

 

(34,162

)

(38,308

)

Net average tangible assets

$

39,442,654

 

38,581,299

 

35,277,115

 

 

$

37,933,035

 

33,834,513

 

 

 

 

 

 

 

 

Return on average assets (1)

 

1.29

%

1.42

%

1.39

%

 

 

1.37

%

1.43

%

Adjustment due to goodwill, core deposit and other intangible assets

 

0.06

%

0.07

%

0.07

%

 

 

0.07

%

0.08

%

Return on average tangible assets (1)

 

1.35

%

1.49

%

1.46

%

 

 

1.44

%

1.51

%

Adjustments as noted above

 

%

%

%

 

 

%

%

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

 

1.35

%

1.49

%

1.46

%

 

 

1.44

%

1.51

%

 

 

 

 

 

 

 

Average tangible common equity:

 

 

 

 

 

 

Average stockholders' equity

$

5,433,274

 

5,403,244

 

5,262,586

 

 

$

5,371,403

 

5,109,153

 

Less: Average preferred equity

 

(217,126

)

(217,126

)

(217,126

)

 

 

(217,126

)

(217,126

)

Average common equity

 

5,216,148

 

5,186,118

 

5,045,460

 

 

 

5,154,277

 

4,892,027

 

Less: Average goodwill

 

(1,846,471

)

(1,846,466

)

(1,819,811

)

 

 

(1,843,708

)

(1,819,811

)

Average core deposit and other intangible assets

 

(35,126

)

(36,884

)

(35,152

)

 

 

(34,162

)

(38,308

)

Net average tangible common equity

$

3,334,551

 

3,302,768

 

3,190,497

 

 

$

3,276,407

 

3,033,908

 

 

 

 

 

 

 

 

Return on average equity (1)

 

9.79

%

10.64

%

9.78

%

 

 

10.16

%

10.02

%

Adjustment due to average preferred stockholders' equity

 

0.41

%

0.44

%

0.42

%

 

 

0.42

%

0.45

%

Return on average common equity (1)

 

10.20

%

11.08

%

10.20

%

 

 

10.58

%

10.47

%

Adjustment due to goodwill, core deposit and other intangible assets

 

5.75

%

6.32

%

5.93

%

 

 

6.07

%

6.41

%

Return on average tangible common equity (1)

 

15.95

%

17.40

%

16.13

%

 

 

16.65

%

16.88

%

Adjustments as noted above

 

0.01

%

(0.03

) %

(0.03

) %

 

 

%

(0.04

) %

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

 

15.96

%

17.37

%

16.10

%

 

 

16.65

%

16.84

%

 

 

 

 

 

 

 

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

 

1.04

%

1.04

%

1.12

%

 

 

1.04

%

1.12

%

Impact of excluding PPP loans from total loans

 

%

%

0.02

%

 

 

%

0.02

%

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

 

1.04

%

1.04

%

1.14

%

 

 

1.04

%

1.14

%

 

 

 

 

 

 

 

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. 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.

7. 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.

8. 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.

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

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

11. 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.

12. 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.

13. Adjusted pre-tax, pre-provision net revenue excludes the impact of ORE expenses and income and investment gains and losses on sales of securities.

14. 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.

15. 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.

16. 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.

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

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

pnfp-earnings

Contacts

MEDIA CONTACT: Joe Bass, 615-743-8219

FINANCIAL CONTACT: Harold Carpenter, 615-744-3742

WEBSITE: www.pnfp.com

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