Bulletin
Investor Alert

New York Markets Close in:

press release

Oct. 20, 2020, 5:31 p.m. EDT

PNFP Reports Diluted EPS of $1.42, ROAA of 1.26% and ROTCE of 15.85% For 3Q 2020

Strong balance sheet with elevated capital and liquidity and sound asset quality metrics

Pinnacle Financial Partners, Inc. (nasdaq/ngs:PNFP) reported net income per diluted common share of $1.42 for the quarter ended Sept. 30, 2020, compared to net income per diluted common share of $1.44 for the quarter ended Sept. 30, 2019, a decrease of 1.4 percent. Excluding gains and losses on the sale of investment securities and ORE expense for the three months ended Sept. 30, 2020 and 2019 and FHLB restructuring charges for the three months ended Sept. 30, 2020, net income per diluted common share was $1.45 for both the three months ended Sept. 30, 2020 and 2019.

Net income per diluted common share was $2.62 for the nine months ended Sept. 30, 2020, compared to net income per diluted common share of $3.97 for the nine months ended Sept. 30, 2019, a decrease of 34.0 percent. Excluding gains and losses on the sale of investment securities and ORE expense for the nine months ended Sept. 30, 2020 and 2019, FHLB restructuring charges for the nine months ended Sept. 30, 2020, and branch rationalization charges and a loss from the sale of Pinnacle Bank's non-prime automobile portfolio for the nine months ended Sept. 30, 2019, net income per diluted common share was $2.72 in 2020, compared to $4.11 in 2019, a year-over-year decrease of 33.8 percent.

"Late in the first quarter, we transitioned our firm from an offensive to a defensive posture, which entailed things like allocating significant resources to the re-risk grading of a significant portion of our loan portfolio and limiting the continuous recruitment and hiring of revenue producers, which has been a key driver historically in our outsized growth," said M. Terry Turner, Pinnacle's president and chief executive officer. "Subsequently, we also altered our internal communications and annual cash incentive plan to encourage associates to aggressively identify and deal with any problem credits while continuing to focus on growing pre-tax, pre-provision net revenues (PPNR) for the remainder of 2020 as we seek to better position our firm to grow EPS at the conclusion of the economic disruption resulting from the pandemic. Key emphasis and initiatives that we launched in support of growing PPNR included lowering our cost of client deposits, growing low-cost core deposits to replace non-core funding, negotiating floors on new and renewed loans and increasing our total share-of-wallet from our existing clients."

BALANCE SHEET GROWTH:

  • Loans at Sept. 30, 2020 were $22.5 billion, an increase of $3.1 billion from Sept. 30, 2019, reflecting year-over-year growth of 16.2 percent. Loans at Sept. 30, 2020 decreased approximately $42.9 million from June 30, 2020. Loan volumes at Sept. 30, 2020 include approximately $2.3 billion of loans issued through the Small Business Administration’s (SBA’s) Paycheck Protection Program (PPP) during the second quarter of 2020. The average yield on these loans, inclusive of $9.8 million of loan fee accretion recognized in the quarter, was 2.77 percent for the third quarter of 2020.

  • Deposits at Sept. 30, 2020 were a record $26.5 billion, an increase of $6.5 billion from Sept. 30, 2019, reflecting year-over-year growth of 32.7 percent. Deposits at Sept. 30, 2020 increased $1.0 billion from June 30, 2020, reflecting a linked-quarter annualized growth rate of 16.0 percent.

"Core deposit growth, excluding the impact of the Paycheck Protection Program, has been tremendous and continues to be a real highlight for 2020," Turner said. "Although it is difficult to measure precisely the level of increased deposits that came to us from the PPP, our research continues to indicate that our PPP borrowers have increased their deposit balances with our firm by roughly $1.5 billion between March 31, 2020 and Sept. 30, 2020, or approximately 44.0 percent of our core deposit growth of $3.4 billion during that same time period. So our initiatives to grow low-cost core deposits beyond any growth associated with PPP borrowers have yielded great results.

"Since the onset of the pandemic, we have been discussing that loan growth will be soft for the next few quarters due to the pandemic. Traditionally, our business model has produced outsized growth as we are continually focused on recruiting revenue producers to our firm. Earlier this year, we elected to pull back on our planned recruiting. Even with that, for the first nine months of 2020 we have attracted 56 revenue producers to our firm compared to 67 for the first nine months of 2019. We are now experiencing increased interest from many revenue producers at the regional and national firms. Thus, we are re-connecting with these prospective hires as we believe they will enable us to capitalize on the massive market-share take away opportunity that Greenwich Associates is predicting for our industry based on the number of middle-market businesses that have indicated they intend to switch banks. According to Greenwich, handling of loan requests during the pandemic and poor service of PPP lending has put an unusually large number of clients in play. In addition to our ability to attract some of the best relationship managers from these larger regional and national franchises, we believe our record for a client-friendly approach to handling payment deferrals and our outsized performance on PPP lending should enable us to harvest a great number of vulnerable clients from our larger competitors."

PROFITABILITY:

  • Return on average assets was 1.26 percent for the third quarter of 2020, compared to 0.77 percent for the second quarter of 2020 and 1.62 percent for the third quarter of 2019. Third quarter 2020 return on average tangible assets amounted to 1.33 percent, compared to 0.81 percent for the second quarter of 2020 and 1.74 percent for the third quarter of 2019.

  • Return on average equity for the third quarter of 2020 amounted to 8.92 percent, compared to 5.58 percent for the second quarter of 2020 and 10.28 percent for the third quarter of 2019. Excluding preferred stockholders' equity for the three months ended Sept. 30 and June 30, 2020, respectively, return on average common equity for the third quarter of 2020 amounted to 9.35 percent, compared to 5.66 percent for the second quarter of 2020 and 10.28 percent for the third quarter of 2019. Third quarter 2020 return on average tangible common equity amounted to 15.85 percent, compared to 9.77 percent for the second quarter of 2020 and 18.28 percent for the third quarter of 2019.

"Our profitability metrics rebounded in the third quarter," said Harold R. Carpenter, Pinnacle's chief financial officer. "A modest reserve build along with an increase in adjusted PPNR were large contributors to the increased profitability this quarter. The reduced provision expense was primarily due to a more favorable forecasted unemployment outlook, reduced loan growth and net charge-offs of $13 million this quarter. We believe loan growth will achieve an annualized growth rate of low-single digits this year, exclusive of PPP lending. After steady monthly declines since March 2020, we were pleased that monthly new loan bookings increased throughout the last two months of the third quarter after hitting a low point for 2020 in July. Obviously, national politics and the pandemic will impact the velocity of any economic recovery for the remainder of this year and into next year. Also, contributing to the meaningful growth in PPNR was approximately 12 percent growth in net interest income due to increased PPP revenues along with BHG having another strong fee quarter.

"Consistent with our initiatives to gather low-cost core deposits, we believe deposit flows will remain strong for the remainder of the year. Since reducing our cost of funds is one of the most important initiatives to advancing our PPNR going into 2021, we continue to target a less than 0.25 percent overall deposit rate for the firm, and our relationship managers are actively working with depositors to accelerate deposit repricing."

MAINTAINING A STRONG BALANCE SHEET:

  • Net charge-offs were $13.1 million for the quarter ended Sept. 30, 2020, compared to $5.4 million for the quarter ended June 30, 2020 and $4.9 million for the quarter ended Sept. 30, 2019. Annualized net charge-offs as a percentage of average loans for the quarter ended Sept. 30, 2020 were 0.23 percent, compared to 0.10 percent for the quarter ended June 30, 2020 and 0.10 percent for the third quarter of 2019. Annualized net charge-offs as a percentage of average loans for the nine months ended Sept. 30, 2020 were 0.18 percent, compared to 0.09 percent for the first nine months of 2019.

  • Nonperforming assets were 0.40 percent of total loans and ORE at Sept. 30, 2020, compared to 0.38 percent at June 30, 2020 and 0.53 percent at Sept. 30, 2019. Nonperforming assets were $90.8 million at Sept. 30, 2020, compared to $84.7 million at June 30, 2020 and $103.3 million at Sept. 30, 2019.

  • The classified asset ratio at Sept. 30, 2020 was 9.9 percent, compared to 11.2 percent at June 30, 2020 and 13.5 percent at Sept. 30, 2019. Classified assets were $307.8 million at Sept. 30, 2020, compared to $338.4 million at June 30, 2020 and $363.2 million at Sept. 30, 2019.

  • The allowance for credit losses represented 1.28 percent of total loans at Sept. 30, 2020, compared to 1.27 percent at June 30, 2020 and 0.48 percent at Sept. 30, 2019. Excluding PPP loans, the allowance for credit losses as a percentage of loans was 1.43 percent at Sept. 30, 2020 and 1.41 percent at June 30, 2020.

  • During the second quarter of 2020, the firm successfully issued 9.0 million depositary shares, each representing a 1/40th fractional interest in a share of Series B noncumulative, perpetual preferred stock in a registered public offering to both retail and institutional investors. Net proceeds from the transaction after issuance costs were approximately $217.1 million. The net proceeds, which have been retained at Pinnacle Financial, contributed to an increase in Tier 1 capital at Pinnacle Financial and will continue to provide additional capital for general corporate purposes.

"Credit metrics remain strong and were basically consistent between the second and third quarters," Carpenter said. "We continue to exert great effort to assess and address the risk in our loan book, particularly with respect to the various segments within our loan portfolio that we believe are the most impacted by COVID-19, namely hospitality, restaurants, retail and entertainment. In the second and third quarters, our relationship managers and credit officers reviewed risk grades on approximately $10.0 billion of our C&I, CRE and construction portfolios with no significant downgrades identified.

"We've continued to make excellent progress with respect to reducing borrower deferrals. During April 2020, borrower deferrals topped out at approximately $4.4 billion. At Sept. 30, 2020, deferrals had decreased to $724 million and, as of Oct. 16, 2020, loans for which principal and/or interest was being deferred had decreased to $414 million, or roughly 1.8 percent of loans outstanding."

REVENUES:

  • Revenues for the quarter ended Sept. 30, 2020 were $297.7 million, an increase of $24.0 million from the $273.6 million recognized in the second quarter of 2020, an annualized growth rate of 35.2 percent. Revenues were up $19.2 million from the third quarter of 2019, a year-over-year growth rate of 6.9 percent.

  • Net interest income for the quarter ended Sept. 30, 2020 was $206.6 million, compared to $200.7 million for the second quarter of 2020 and $195.8 million for the third quarter of 2019, a year-over-year growth rate of 5.5 percent. Net interest margin was 2.82 percent for the third quarter of 2020, compared to 2.87 percent for the second quarter of 2020 and 3.43 percent for the third quarter of 2019.

  • Impacting the firm’s net interest income and net interest margin in the third quarter was the impact of both the PPP and the firm’s building and maintenance of additional on-balance sheet liquidity as a result of the pandemic. PPP loans outstanding on average were $2.2 billion during the third quarter of 2020. Additionally, the firm also maintained approximately $2.6 billion in average excess liquidity, primarily in Federal funds sold and other cash equivalent balances. The firm's third quarter 2020 net interest margin was negatively impacted by approximately 40 basis points as a result of PPP loans and building and maintaining excess liquidity, compared to 32 basis points in the second quarter of 2020.

  • Included in net interest income for the third quarter of 2020 was $5.6 million of discount accretion associated with fair value adjustments, compared to $5.8 million of discount accretion recognized in the second quarter of 2020 and $11.1 million in the third quarter of 2019. The firm's net interest margin was positively impacted by approximately 9 basis points as a result of fair value adjustment discount accretion in each of the second and third quarters of 2020. There remains $25.2 million of purchase accounting discount accretion as of Sept. 30, 2020.

  • Noninterest income for the quarter ended Sept. 30, 2020 was $91.1 million, compared to $73.0 million for the second quarter of 2020, a linked-quarter annualized growth rate of 99.3 percent. Compared to $82.6 million for the third quarter of 2019, noninterest income grew 10.2 percent year-over-year.

"We are reporting a net interest margin for the third quarter of 2.82 percent impacted meaningfully by the lower yielding PPP loans and our liquidity build," Carpenter said. "These items will continue to impact our margin results over the next few quarters, but eventually their impact will lessen, allowing the GAAP margin to be more indicative of underlying business trends. Our focus for the next few quarters will be to continue to reduce our deposit costs for both core and wholesale funding sources. We also anticipate reducing our level of liquidity over the next three to four quarters and expect that eventually we will find our way to historical balance sheet liquidity levels. Additionally, consistent with our initiatives to advance PPNR, supporting our net interest margin are loan floors on approximately 54.8 percent of our variable rate loan portfolio as of Sept. 30, 2020 compared to 43.7 percent at Dec. 31, 2019.

"With improvement in various equity markets and consistent with our emphasis on capitalizing on share-of-wallet opportunities, wealth management rebounded in the third quarter with a nice increase in revenues. Our residential mortgage business continues to have a big year with $512.0 million of secondary market placements in the third quarter. Revenues at BHG have proven to be remarkably resilient and continue to outperform and exceed expectations. For the first nine months of 2020, BHG further strengthened its balance sheet by increasing its reserves, while at the same time reporting quarter-over-quarter net earnings growth. Last quarter, BHG granted deferrals to nearly 15 percent of its loans. At Sept. 30, 2020, BHG reported expiration of substantially all COVID-related loan deferrals."

OPERATING LEVERAGE AND OTHER HIGHLIGHTS:

  • The firm's efficiency ratio for the third quarter of 2020 was 48.5 percent, compared to 48.1 percent for the second quarter of 2020 and 47.7 percent in the third quarter of 2019. The ratio of noninterest expenses to average assets was 1.70 percent for the third quarter of 2020, compared to 1.61 percent in the second quarter of 2020 and 1.94 percent in the third quarter of 2019.

  • Noninterest expense for the quarter ended Sept. 30, 2020 was $144.3 million, compared to $131.6 million in the second quarter of 2020 and $132.9 million in the third quarter of 2019, reflecting a year-over-year increase of 8.5 percent. Excluding ORE expense for 2020 and 2019 and FHLB restructuring charges for 2020, noninterest expense for the third quarter of 2020 increased 6.2 percent over the third quarter of 2019.

  • The effective tax rate for the third quarter of 2020 was 19.3 percent, compared to 15.2 percent for the second quarter of 2020 and 19.5 percent for the third quarter of 2019.

"Expenses increased in the third quarter of 2020 due primarily to the restructuring of our annual cash incentive plan with the addition of a PPNR growth component," Carpenter said. "At June 30, 2020, we were accruing a 25 percent target level payout. This reduced target payout was a direct result of the increased provisioning incurred by the firm during the first six months of 2020. Early in the third quarter, in order to ensure that our associates are appropriately focused on combating the impact of COVID-19 on our results for this year as well as to appropriately focus our associates on preparing to capitalize on opportunities that we believe will exist following the pandemic, we determined that a modest increase to the annual incentive opportunity for 2020 was warranted, so we correlated the additional incentive opportunity to growth in PPNR for 2020 over last year. As a result of that modification to the plan, we have increased our cash incentive plan accrual to 50 percent of our associates' annual target award. As we consider expense run rates for 2020, our belief is that our 2020 expense growth will result in a mid-single digit percentage increase in comparison to the annualize run rate from the fourth quarter of 2019."

BOARD OF DIRECTORS DECLARES DIVIDENDS

On Oct. 20, 2020, Pinnacle Financial's Board of Directors approved a quarterly cash dividend of $0.16 per common share to be paid on Nov. 27, 2020 to common shareholders of record as of the close of business on Nov. 6, 2020. Additionally, on that same day, Pinnacle Financial's Board of Directors approved a quarterly dividend of approximately $3.8 million, or $16.88 per share (or $0.422 per depositary share), on Pinnacle Financial's 6.75 percent Series B Non-Cumulative Perpetual Preferred Stock payable on Dec. 1, 2020 to shareholders of record at the close of business on Nov. 16, 2020.

The amount and timing of any future dividend payments to both preferred and common shareholders will be subject to the approval of Pinnacle's Board of Directors.

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. CT on Oct. 21, 2020, to discuss third quarter 2020 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 2020 deposit data from the FDIC. Pinnacle earned a spot on FORTUNE's 2020 list of 100 Best Companies to Work For® in the U.S., its fourth consecutive appearance. American Banker recognized Pinnacle as one of America’s Best Banks to Work For seven years in a row.

Pinnacle owns a 49 percent interest in Bankers Healthcare Group (BHG), which provides innovative, hassle-free financial solutions to healthcare practitioners and other licensed professionals. Great Place to Work and FORTUNE ranked BHG No. 1 on its 2020 list of Best Workplaces in New York State in the small/medium business category.

The firm began operations in a single location in downtown Nashville, TN in October 2000 and has since grown to approximately $33.8 billion in assets as of Sept. 30, 2020. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 12 primarily urban markets in Tennessee, the Carolinas, Virginia and Atlanta.

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) further 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 further effects of the emergence of widespread health emergencies or pandemics, including the magnitude and duration of the COVID-19 pandemic and its 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) 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; (iv) the inability of Pinnacle Financial, or entities in which it has significant investments, like BHG, to maintain the historical growth rate of its, or such entities', loan portfolio; (v) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (vi) effectiveness of Pinnacle Financial's asset management activities in improving, resolving or liquidating lower-quality assets; (vii) 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; (viii) adverse conditions in the national or local economies including in Pinnacle Financial's markets throughout Tennessee, North Carolina, South Carolina, Georgia and Virginia, particularly in commercial and residential real estate markets; (ix) 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; (x) the results of regulatory examinations; (xi) Pinnacle Financial's ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions; (xii) difficulties and delays in integrating acquired businesses or fully realizing costs savings and other benefits from acquisitions; (xiii) BHG's ability to profitably grow its business and successfully execute on its business plans; (xiv) risks of expansion into new geographic or product markets including the recent expansion into the Atlanta, Georgia metro market; (xv) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including goodwill or other intangible assets; (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 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 if not prohibited from doing so by Pinnacle Financial or 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) the availability of and access to capital; (xxv) 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 (xxvi) 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, 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, efficiency ratio, adjusted PPNR 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, the charges associated with Pinnacle Financial's branch rationalization project, FHLB restructuring expenses, the sale of the remaining portion of Pinnacle Bank's non-prime automobile portfolio 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 2020 versus certain periods in 2019 and to internally prepared projections.

 
 
 
 
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS – UNAUDITED
(dollars in thousands)      
  September 30, December 31, September 30,
ASSETS      
Cash and noninterest-bearing due from banks $ 179,231     $ 157,901     $ 197,660    
Restricted cash 247,761     137,045     157,544    
Interest-bearing due from banks 2,604,646     210,784     553,124    
Federal funds sold and other 11,687     20,977     11,975    
Cash and cash equivalents 3,043,325     526,707     920,303    
Securities available-for-sale, at fair value 3,463,422     3,539,995     3,393,435    
Securities held-to-maturity (fair value of $1.1 billion, net of allowance for credit losses of $191,000 at Sept. 30, 2020, $201.2 million and $202.8 million at Dec. 31, 2019 and Sept. 30, 2019, respectively) 1,039,650     188,996     189,684    
Consumer loans held-for-sale 82,748     81,820     73,042    
Commercial loans held-for-sale 12,290     17,585     21,312    
Loans 22,477,409     19,787,876     19,345,642    
Less allowance for credit losses (288,645 )   (94,777 )   (93,647 )  
Loans, net 22,188,764     19,693,099     19,251,995    
Premises and equipment, net 287,711     273,932     274,983    
Equity method investment 289,301     278,037     267,097    
Accrued interest receivable 101,762     84,462     81,124    
Goodwill 1,819,811     1,819,811     1,830,652    
Core deposits and other intangible assets 44,713     51,130     39,349    
Other real estate owned 19,445     29,487     30,049    
Other assets 1,431,989     1,220,435     1,174,809    
Total assets $ 33,824,931     $ 27,805,496     $ 27,547,834    
LIABILITIES AND STOCKHOLDERS' EQUITY      
Deposits:      
Noninterest-bearing $ 7,050,670     $ 4,795,476     $ 4,702,155    
Interest-bearing 4,995,769     3,630,168     3,372,028    
Savings and money market accounts 10,513,645     7,813,939     7,625,872    
Time 3,983,872     3,941,445     4,300,622    
Total deposits 26,543,956     20,181,028     20,000,677    
Securities sold under agreements to repurchase 127,059     126,354     95,402    
Federal Home Loan Bank advances 1,287,738     2,062,534     2,052,548    
Subordinated debt and other borrowings 670,273     749,080     750,488    
Accrued interest payable 26,101     42,183     36,836    
Other liabilities 382,496     288,569     317,253    
Total liabilities 29,037,623     23,449,748     23,253,204    
Preferred stock, no par value, 10.0 million shares authorized; 225,000 shares non-cumulative perpetual preferred stock, Series B, liquidation preference $225.0 million, issued and outstanding at Sept. 30, 2020 and no shares issued and outstanding at Dec. 31, 2019 and Sept. 30, 2019, respectively 217,126            
Common stock, par value $1.00, 180.0 million shares authorized; 75.8 million, 76.6 million and 76.7 million shares issued and outstanding at Sept. 30, 2020, Dec. 31, 2019 and Sept. 30, 2019, respectively 75,835     76,564     76,736    
Additional paid-in capital 3,023,430     3,064,467     3,070,235    
Retained earnings 1,312,929     1,184,183     1,100,517    
Accumulated other comprehensive income, net of taxes 157,988     30,534     47,142    
Total stockholders' equity 4,787,308     4,355,748     4,294,630    
Total liabilities and stockholders' equity $ 33,824,931     $ 27,805,496     $ 27,547,834    
       
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 per share data) Three months ended Nine months ended
  September 30, June 30, September 30, September 30, September 30,
Interest income:          
Loans, including fees $ 224,482     $ 226,281     $ 247,147   $ 687,183     $ 714,179    
Securities          
Taxable 8,276     9,589     10,655   28,133     36,438    
Tax-exempt 15,001     14,596     13,313   43,421     37,541    
Federal funds sold and other 1,429     1,272     4,634   5,258     11,325    
Total interest income 249,188     251,738     275,749   763,995     799,483    
Interest expense:          
Deposits 28,401     33,727     62,531   112,826     175,736    
Securities sold under agreements to repurchase 77     94     152   286     439    
FHLB advances and other borrowings 14,116     17,260     17,260   50,080     51,338    
Total interest expense 42,594     51,081     79,943   163,192     227,513    
Net interest income 206,594     200,657     195,806   600,803     571,970    
Provision for credit losses 16,333     68,332     8,260   184,554     22,639    
Net interest income after provision for credit losses 190,261     132,325     187,546   416,249     549,331    
Noninterest income:          
Service charges on deposit accounts 9,854     6,910     10,193   25,796     27,675    
Investment services 6,734     5,971     6,270   21,944     17,607    
Insurance sales commissions 2,284     2,231     2,252   7,755     7,327    
Gains on mortgage loans sold, net 19,453     19,619     7,402   47,655     18,291    
Investment gains (losses) on sales, net 651     (128 )   417   986     (6,009 )  
Trust fees 3,986     3,958     3,593   12,114     10,349    
Income from equity method investment 26,445     17,208     32,248   59,245     77,799    
Other noninterest income 21,658     17,185     20,244   58,901     51,325    
Total noninterest income 91,065     72,954     82,619   234,396     204,364    
Noninterest expense:          
Salaries and employee benefits 90,103     73,887     85,919   244,470     231,915    
Equipment and occupancy 21,622     22,026     20,348   64,626     63,523    
Other real estate, net 1,795     2,888     655   7,098     3,424    
Marketing and other business development 2,321     2,142     2,723   7,714     8,953    
Postage and supplies 1,761     2,070     1,766   5,821     5,737    
Amortization of intangibles 2,417     2,479     2,430   7,416     7,012    
Other noninterest expense 24,258     26,113     19,100   76,086     54,114    
Total noninterest expense 144,277     131,605     132,941   413,231     374,678    
Income before income taxes 137,049     73,674     137,224   237,414     379,017    
Income tax expense 26,404     11,230     26,703   35,969     74,215    
Net income 110,645     62,444     110,521   201,445     304,802    
Preferred stock dividends (3,798 )         (3,798 )      
Net income available to common shareholders $ 106,847     $ 62,444     $ 110,521   $ 197,647     $ 304,802    
Per share information:          
Basic net income per common share $ 1.42     $ 0.83     $ 1.45   $ 2.62     $ 3.99    
Diluted net income per common share $ 1.42     $ 0.83     $ 1.44   $ 2.62     $ 3.97    
Weighted average common shares outstanding:          
Basic 75,240,664     75,210,869     76,301,010   75,417,663     76,480,757    
Diluted 75,360,033     75,323,259     76,556,309   75,544,677     76,761,167    
This information is preliminary and based on company data available at the time of the presentation.
 
 
 
 
 
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
             
(dollars in thousands) September June March December September June
2020 2020 2020 2019 2019 2019
Balance sheet data, at quarter end:            
Commercial and industrial loans $ 8,395,963   8,516,333   6,752,317   6,290,296   6,002,285   5,795,107  
Commercial real estate - owner occupied 2,748,075   2,708,306   2,650,170   2,669,766   2,595,837   2,624,160  
Commercial real estate - investment 4,648,457   4,822,537   4,520,234   4,418,658   4,443,687   4,252,098  
Commercial real estate - multifamily and other 571,995   561,481   550,338   620,794   669,721   709,135  
Consumer real estate - mortgage loans 3,041,019   3,042,604   3,106,465   3,068,625   3,025,502   2,949,755  
Construction and land development loans 2,728,439   2,574,494   2,520,937   2,430,483   2,253,303   2,117,969  
Consumer and other 343,461   294,545   296,392   289,254   355,307   366,094  
Total loans 22,477,409   22,520,300   20,396,853   19,787,876   19,345,642   18,814,318  
Allowance for credit losses (288,645 ) (285,372 ) (222,465 ) (94,777 ) (93,647 ) (90,253 )
Securities 4,503,072   4,358,313   4,089,821   3,728,991   3,583,119   3,447,834  
Total assets 33,824,931   33,342,112   29,264,180   27,805,496   27,547,834   26,540,355  
Noninterest-bearing deposits 7,050,670   6,892,864   4,963,415   4,795,476   4,702,155   4,493,419  
Total deposits 26,543,956   25,521,829   21,333,171   20,181,028   20,000,677   19,449,383  
Securities sold under agreements to repurchase 127,059   194,553   186,548   126,354   95,402   154,169  
FHLB advances 1,287,738   1,787,551   2,317,520   2,062,534   2,052,548   1,960,062  
Subordinated debt and other borrowings 670,273   717,043   669,658   749,080   750,488   464,144  
Total stockholders' equity 4,787,308   4,695,647   4,385,128   4,355,748   4,294,630   4,176,361  
Balance sheet data, quarterly averages:            
Total loans $ 22,493,192   22,257,168   20,009,288   19,599,620   19,216,835   18,611,164  
Securities 4,420,280   4,194,811   3,814,543   3,662,829   3,507,363   3,412,475  
Federal funds sold and other 3,279,248   2,618,832   807,796   717,927   802,326   530,556  
Total earning assets 30,192,720   29,070,811   24,631,627   23,980,376   23,526,524   22,554,195  
Total assets 33,838,716   32,785,391   28,237,642   27,604,774   27,134,163   25,915,971  
Noninterest-bearing deposits 6,989,439   6,432,010   4,759,729   4,834,694   4,574,821   4,399,766  
Total deposits 26,352,823   24,807,032   20,679,455   20,078,594   19,778,007   18,864,859  
Securities sold under agreements to repurchase 147,211   191,084   141,192   109,127   134,197   117,261  
FHLB advances 1,515,879   2,213,769   2,029,888   1,992,213   2,136,928   2,164,341  
Subordinated debt and other borrowings 715,138   706,657   673,415   753,244   533,194   469,498  
Total stockholders' equity 4,765,864   4,499,438   4,417,155   4,343,246   4,265,006   4,117,754  
Statement of operations data, for the three months ended:
Interest income $ 249,188   251,738   263,069   268,453   275,749   265,851  
Interest expense 42,594   51,081   69,517   74,281   79,943   76,933  
Net interest income 206,594   200,657   193,552   194,172   195,806   188,918  
Provision for credit losses 16,333   68,332   99,889   4,644   8,260   7,195  
Net interest income after provision for credit losses 190,261   132,325   93,663   189,528   187,546   181,723  
Noninterest income 91,065   72,954   70,377   59,462   82,619   70,682  
Noninterest expense 144,277   131,605   137,349   130,470   132,941   127,686  
Income before taxes 137,049   73,674   26,691   118,520   137,224   124,719  
Income tax (benefit) expense 26,404   11,230   (1,665 ) 22,441   26,703   24,398  
Net income 110,645   62,444   28,356   96,079   110,521   100,321  
Preferred stock dividends (3,798 )          
Net income available to common shareholders $ 106,847   62,444   28,356   96,079   110,521   100,321  
Profitability and other ratios:            
Return on avg. assets [(1)] 1.26 % 0.77 % 0.40 % 1.38 % 1.62 % 1.55 %
Return on avg. equity [(1)] 8.92 % 5.58 % 2.58 % 8.78 % 10.28 % 9.77 %
Return on avg. common equity [ (1)] 9.35 % 5.66 % 2.58 % 8.78 % 10.28 % 9.77 %
Return on avg. tangible common equity [(1)] 15.85 % 9.77 % 4.48 % 15.41 % 18.28 % 17.74 %
Common stock dividend payout ratio [(16)] 16.49 % 16.41 % 14.61 % 12.24 % 12.31 % 12.88 %
Net interest margin [ (2)] 2.82 % 2.87 % 3.28 % 3.35 % 3.43 % 3.48 %
Noninterest income to total revenue [(3)] 30.59 % 26.66 % 26.67 % 23.44 % 29.67 % 27.23 %
Noninterest income to avg. assets [(1)] 1.07 % 0.89 % 1.00 % 0.85 % 1.21 % 1.09 %
Noninterest exp. to avg. assets [(1)] 1.70 % 1.61 % 1.96 % 1.88 % 1.94 % 1.98 %
Efficiency ratio [(4)] 48.47 % 48.10 % 52.04 % 51.44 % 47.75 % 49.19 %
Avg. loans to avg. deposits 85.35 % 89.72 % 96.76 % 97.61 % 97.16 % 98.66 %
Securities to total assets 13.31 % 13.07 % 13.98 % 13.41 % 13.01 % 12.99 %
 
This information is preliminary and based on company data available at the time of the presentation.
 
 
 
 
 
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
       
(dollars in thousands) Three months ended   Three months ended
September 30, 2020   September 30, 2019
  Average Interest Rates/Yields   Average Interest Rates/Yields
Interest-earning assets              
Loans [ (1) (2)] $ 22,493,192   $ 224,482   4.04 %   $ 19,216,835   $ 247,147   5.21 %
Securities              
Taxable 2,226,008   8,276   1.48 %   1,712,265   10,655   2.47 %
Tax-exempt [(2)] 2,194,272   15,001   3.29 %   1,795,098   13,313   3.51 %
Federal funds sold and other 3,279,248   1,429   0.17 %   802,326   4,634   2.29 %
Total interest-earning assets 30,192,720   $ 249,188   3.38 %   23,526,524   $ 275,749   4.78 %
Nonearning assets              
Intangible assets 1,866,082         1,866,223      
Other nonearning assets 1,779,914         1,741,416      
Total assets $ 33,838,716         $ 27,134,163      
               
Interest-bearing liabilities              
Interest-bearing deposits:              
Interest checking 4,784,627   3,733   0.31 %   3,237,155   9,517   1.17 %
Savings and money market 10,312,876   8,374   0.32 %   7,614,558   27,303   1.42 %
Time 4,265,881   16,294   1.52 %   4,351,473   25,711   2.34 %
Total interest-bearing deposits 19,363,384   28,401   0.58 %   15,203,186   62,531   1.63 %
Securities sold under agreements to repurchase 147,211   77   0.21 %   134,197   152   0.45 %
Federal Home Loan Bank advances 1,515,879   6,945   1.82 %   2,136,928   11,591   2.15 %
Subordinated debt and other borrowings 715,138   7,171   3.99 %   533,194   5,669   4.22 %
Total interest-bearing liabilities 21,741,612   42,594   0.78 %   18,007,505   79,943   1.76 %
Noninterest-bearing deposits 6,989,439         4,574,821      
Total deposits and interest-bearing liabilities 28,731,051   $ 42,594   0.59 %   22,582,326   $ 79,943   1.40 %
Other liabilities 341,801         286,831      
Stockholders' equity 4,765,864         4,265,006      
Total liabilities and stockholders' equity $ 33,838,716         $ 27,134,163      
Net interest income   $ 206,594         $ 195,806    
Net interest spread [(3)]     2.60 %       3.02 %
Net interest margin [(4)]     2.82 %       3.43 %
               
(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 $7.3 million of taxable equivalent income for the three months ended Sept. 30, 2020 compared to $7.5 million for the three months ended Sept. 30, 2019. The tax-exempt benefit has been reduced by the projected impact of tax-exempt income that will be disallowed pursuant to IRS Regulations as of and for the then current period presented.
(3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the three months ended Sept. 30, 2020 would have been 2.79% compared to a net interest spread of 3.37% for the three months ended Sept. 30, 2019.
(4) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.
     
This information is preliminary and based on company data available at the time of the presentation.
 
 
 
 
 
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
       
(dollars in thousands) Nine months ended   Nine months ended
September 30, 2020   September 30, 2019
  Average Interest Rates/Yields   Average Interest Rates/ Yields
Interest-earning assets              
Loans [ (1) (2)] $ 21,589,858   $ 687,183   4.33 %   $ 18,593,509   $ 714,179   5.23 %
Securities              
Taxable 2,103,023   28,133   1.79 %   1,779,512   36,438   2.74 %
Tax-exempt [(2)] 2,041,199   43,421   3.41 %   1,628,742   37,541   3.67 %
Federal funds sold and other 2,239,102   5,258   0.31 %   602,148   11,325   2.51 %
Total interest-earning assets 27,973,182   $ 763,995   3.75 %   22,603,911   $ 799,483   4.85 %
Nonearning assets              
Intangible assets 1,868,118         1,856,324      
Other nonearning assets 1,787,377         1,580,762      
Total assets $ 31,628,677         $ 26,040,997      
               
Interest-bearing liabilities              
Interest-bearing deposits:              
Interest checking 4,391,319   16,456   0.50 %   3,173,228   28,145   1.19 %
Savings and money market 9,201,302   37,713   0.55 %   7,503,407   80,587   1.44 %
Time 4,298,814   58,657   1.82 %   3,937,486   67,004   2.28 %
Total interest-bearing deposits 17,891,435   112,826   0.84 %   14,614,121   175,736   1.61 %
Securities sold under agreements to repurchase 159,783   286   0.24 %   120,346   439   0.49 %
Federal Home Loan Bank advances 1,918,371   26,854   1.87 %   2,076,647   33,107   2.13 %
Subordinated debt and other borrowings 698,464   23,226   4.44 %   491,384   18,231   4.96 %
Total interest-bearing liabilities 20,668,053   163,192   1.05 %   17,302,498   227,513   1.76 %
Noninterest-bearing deposits 6,063,783         4,391,400      
Total deposits and interest-bearing liabilities 26,731,836   $ 163,192   0.82 %   21,693,898   $ 227,513   1.40 %
Other liabilities 335,274         212,813      
Stockholders' equity 4,561,567         4,134,286      
Total liabilities and stockholders' equity $ 31,628,677         $ 26,040,997      
Net interest income   $ 600,803         $ 571,970    
Net interest spread [(3)]     2.70 %       3.09 %
Net interest margin [(4)]     2.97 %       3.51 %
               
(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 $21.3 million of taxable equivalent income for the nine months ended Sept. 30, 2020 compared to $20.9 million for the nine months ended Sept. 30, 2019. The tax-exempt benefit has been reduced by the projected impact of tax-exempt income that will be disallowed pursuant to IRS Regulations as of and for the then current period presented.
(3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the nine months ended Sept. 30, 2020 would have been 2.93% compared to a net interest spread of 3.45% for the nine months ended Sept. 30, 2019.
(4) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.
 
This information is preliminary and based on company data available at the time of the presentation.
 
 
 
 
 
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
             
(dollars in thousands) September June March December September June
2020 2020 2020 2019 2019 2019
Asset quality information and ratios:            
Nonperforming assets:            
Nonaccrual loans $ 71,390   62,562   70,970   61,605   73,263   76,077  
Other real estate (ORE) and other nonperforming assets (NPAs) 19,445   22,105   27,182   29,487   30,049   26,658  
Total nonperforming assets $ 90,835   $ 84,667   $ 98,152   $ 91,092   $ 103,312   $ 102,735  
Past due loans over 90 days and still accruing interest $ 1,313   $ 1,982   $ 1,990   $ 1,615   $ 2,450   $ 2,733  
Accruing troubled debt restructurings [(5)] $ 2,588   $ 3,274   $ 3,869   $ 4,850   $ 5,803   $ 7,412  
Accruing purchase credit impaired loans $ 14,346   $ 14,616   $ 13,984   $ 13,249   $ 12,887   $ 12,632  
Net loan charge-offs $ 13,057   $ 5,384   $ 10,155   $ 3,515   $ 4,866   $ 4,136  
Allowance for credit losses to nonaccrual loans 404.3 % 456.1 % 313.5 % 153.8 % 127.8 % 118.6 %
As a percentage of total loans:            
Past due accruing loans over 30 days 0.11 % 0.09 % 0.17 % 0.18 % 0.24 % 0.21 %
Potential problem loans [(6)] 0.96 % 1.12 % 1.22 % 1.39 % 1.31 % 1.21 %
Allowance for credit losses [(20)] 1.28 % 1.27 % 1.09 % 0.48 % 0.48 % 0.48 %
Nonperforming assets to total loans, ORE and other NPAs 0.40 % 0.38 % 0.48 % 0.46 % 0.53 % 0.55 %
Classified asset ratio (Pinnacle Bank) [(8)] 9.9 % 11.2 % 12.0 % 13.4 % 13.5 % 13.9 %
Annualized net loan charge-offs to avg. loans [(7)] 0.23 % 0.10 % 0.20 % 0.07 % 0.10 % 0.09 %
Wtd. avg. commercial loan internal risk ratings [(6)] 45.2 45.1 45.0 44.9 45.3 44.9
    44.4 4.5 4.4 4.4 4.5
Interest rates and yields:            
Loans 4.04 % 4.16 % 4.84 % 5.00 % 5.21 % 5.22 %
Securities 2.38 % 2.59 % 2.82 % 2.85 % 3.00 % 3.20 %
Total earning assets 3.38 % 3.58 % 4.41 % 4.58 % 4.78 % 4.85 %
Total deposits, including non-interest bearing 0.43 % 0.55 % 0.99 % 1.10 % 1.25 % 1.25 %
Securities sold under agreements to repurchase 0.21 % 0.20 % 0.33 % 0.48 % 0.45 % 0.49 %
FHLB advances 1.82 % 1.73 % 2.06 % 2.10 % 2.15 % 2.14 %
Subordinated debt and other borrowings 3.99 % 4.42 % 4.96 % 4.04 % 4.22 % 5.34 %
Total deposits and interest-bearing liabilities 0.59 % 0.74 % 1.19 % 1.29 % 1.40 % 1.43 %
             
Capital and other ratios (8):            
Pinnacle Financial ratios:            
Stockholders' equity to total assets 14.2 % 14.1 % 15.0 % 15.7 % 15.6 % 15.7 %
Common equity Tier one 9.9 % 9.6 % 9.4 % 9.7 % 9.6 % 9.5 %
Tier one risk-based 10.7 % 10.4 % 9.4 % 9.7 % 9.6 % 9.5 %
Total risk-based 14.2 % 14.0 % 12.8 % 13.2 % 13.2 % 12.0 %
Leverage 8.5 % 8.4 % 8.8 % 9.1 % 8.9 % 9.1 %
Tangible common equity to tangible assets 8.5 % 8.3 % 9.2 % 9.6 % 9.4 % 9.4 %
Pinnacle Bank ratios:            
Common equity Tier one 11.3 % 11.0 % 11.0 % 11.2 % 11.1 % 10.3 %
Tier one risk-based 11.3 % 11.0 % 11.0 % 11.2 % 11.1 % 10.3 %
Total risk-based 12.6 % 12.4 % 12.2 % 12.2 % 12.1 % 11.3 %
Leverage 8.9 % 8.9 % 10.3 % 10.5 % 10.4 % 9.8 %
Construction and land development loans as a percentage of total capital [(19)] 86.7 % 83.6 % 84.2 % 83.6 % 79.9 % 82.6 %
Non-owner occupied commercial real estate and multi-family as a percentage of total capital [(19)] 268.8 % 275.0 % 264.1 % 268.3 % 272.8 % 288.9 %
             
This information is preliminary and based on company data available at the time of the presentation.
 
 
 
 
 
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
               
(dollars in thousands, except per share data)   September June March December September June
  2020 2020 2020 2019 2019 2019
               
Per share data:              
Earnings per common share – basic $ 1.42   0.83   0.37   1.26   1.45   1.31  
Earnings per common share – basic, excluding non-GAAP adjustments $ 1.45   0.89   0.39   1.27   1.45   1.43  
Earnings per common share – diluted $ 1.42   0.83   0.37   1.26   1.44   1.31  
Earnings per common share – diluted, excluding non-GAAP adjustments $ 1.45   0.89   0.39   1.27   1.45   1.42  
Common dividends per share $ 0.16   0.16   0.16   0.16   0.16   0.16  
Book value per common share at quarter end [(9)] $ 60.26   59.05   57.85   56.89   55.97   54.29  
Tangible book value per common share at quarter end [(9)] $ 35.68   34.43   33.20   32.45   31.60   30.26  
Revenue per diluted common share $ 3.95   3.63   3.47   3.32   3.64   3.39  
Revenue per diluted common share, excluding non-GAAP adjustments $ 3.94   3.63   3.47   3.32   3.63   3.47  
               
Investor information:              
Closing sales price of common stock on last trading day of quarter $ 35.59   41.99   37.54   64.00   56.75   57.48  
High closing sales price of common stock during quarter $ 44.47   48.98   64.03   64.80   61.14   59.23  
Low closing sales price of common stock during quarter $ 33.28   33.24   31.98   54.58   50.78   52.95  
               
Closing sales price of depositary shares on last trading day of quarter $ 26.49   25.98          
High closing sales price of depositary shares during quarter $ 26.82   26.05          
Low closing sales price of depositary shares during quarter $ 25.51   25.19          
               
Other information:              
Residential mortgage loan sales:              
Gross loans sold $ 511,969   550,704   286,703   322,228   302,473   291,813  
Gross fees [(10)] $ 23,557   16,381   9,490   9,953   9,392   8,485  
Gross fees as a percentage of loans originated   4.60 % 2.97 % 3.31 % 3.09 % 3.11 % 2.91 %
Net gain on residential mortgage loans sold $ 19,453   19,619   8,583   6,044   7,402   6,011  
Investment gains (losses) on sales of securities, net [(15)] $ 651   (128)   463   68   417   (4,466)  
Brokerage account assets, at quarter end [(11)] $ 4,866,726   4,499,856   4,000,643   4,636,441   4,355,429   4,287,985  
Trust account managed assets, at quarter end $ 2,978,035   2,908,131   2,714,582   2,942,811   2,530,356   2,425,791  
Core deposits [(12)] $ 22,003,989   21,391,794   18,604,262   17,617,479   17,103,470   16,503,686  
Core deposits to total funding [(12)]   76.9 % 75.8 % 75.9 % 76.2 % 74.7 % 74.9 %
Risk-weighted assets $ 25,189,944   24,937,535   24,600,490   23,911,064   23,370,342   22,706,512  
Number of offices   114   113   111   111   114   114  
Total core deposits per office $ 193,017   189,308   167,606   158,716   150,030   144,769  
Total assets per full-time equivalent employee $ 13,027   12,936   11,422   11,180   11,217   11,241  
Annualized revenues per full-time equivalent employee $ 456.1   426.9   414.3   404.6   449.8   441.0  
Annualized expenses per full-time equivalent employee $ 221.1   205.4   215.6   208.1   214.8   216.9  
Number of employees (full-time equivalent)   2,596.5   2,577.5   2,562.0   2,487.0   2,456.0   2,361.0  
Associate retention rate [(13)]   94.4 % 94.5 % 93.5 % 92.8 % 93.2 % 93.0 %
               
This information is preliminary and based on company data available at the time of the presentation.
 
 
 
 
 
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
  Three months ended   Nine months ended
(dollars in thousands, except per share data) September June September   September September
2020 2020 2019   2020 2019
             
Net interest income $ 206,594   200,657   195,806     600,803   571,970  
             
Noninterest income 91,065   72,954   82,619     234,396   204,364  
Total revenues 297,659   273,611   278,425     835,199   776,334  
Less: Investment (gains) losses on sales of securities, net (651 ) 128   (417 )   (986 ) 6,009  
Loss on sale of non-prime automobile portfolio           1,536  
Total revenues excluding the impact of adjustments noted above $ 297,008   273,739   278,008     834,213   783,879  
             
Noninterest expense $ 144,277   131,605   132,941     413,231   374,678  
Less: Other real estate (ORE) expense 1,795   2,888   655     7,098   3,424  
FHLB restructuring charges 1,991   2,870       4,861    
Branch rationalization charges           3,189  
Noninterest expense excluding the impact of adjustments noted above $ 140,491   125,847   132,286     401,272   368,065  
             
Pre-tax income $ 137,049   73,674   137,224     237,414   379,017  
Provision for credit losses 16,333   68,332   8,260     184,554   22,639  
Pre-tax pre-provision net revenue 153,382   142,006   145,484     421,968   401,656  
Adjustments noted above 3,135   5,886   238     10,973   14,158  
Adjusted pre-tax pre-provision net revenue [(14)] $ 156,517   147,892   145,722     432,941   415,814  
             
             
Noninterest income $ 91,065   72,954   82,619     234,396   204,364  
Less: Adjustments as noted above (651 ) 128   (417 )   (986 ) 7,545  
Noninterest income excluding the impact of adjustments noted above $ 90,414   73,082   82,202     233,410   211,909  
             
Efficiency ratio [(4)] 48.47 % 48.10 % 47.75 %   49.48 % 48.26 %
Adjustments as noted above (1.17 )% (2.13 )% (0.17 )%   (1.38 )% (1.31 )%
Efficiency ratio (excluding adjustments noted above) 47.30 % 45.97 % 47.58 %   48.10 % 46.95 %
             
Total average assets $ 33,838,716   32,785,391   27,134,163     31,628,677   26,040,997  
             
Noninterest income to average assets [(1)] 1.07 % 0.89 % 1.21 %   0.99 % 1.05 %
Adjustments as noted above (0.01 )% 0.01 % (0.01 )%   % 0.04 %
Noninterest income (excluding adjustments noted above) to average assets [(1)] 1.06 % 0.90 % 1.20 %   0.99 % 1.09 %
             
Noninterest expense to average assets [(1)] 1.70 % 1.61 % 1.94 %   1.75 % 1.92 %
Adjustments as noted above (0.05 )% (0.07 )% (0.01 )%   (0.06 )% (0.03 )%
Noninterest expense (excluding adjustments noted above) to average assets [(1)] 1.65 % 1.54 % 1.93 %   1.69 % 1.89 %
             
This information is preliminary and based on company data available at the time of the presentation.
 
 
 
 
 
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
  Three months ended
(dollars in thousands, except per share data) September June March December September June
2020 2020 2020 2019 2019 2019
Net income available to common shareholders $ 106,847     62,444     28,356     96,079     110,521     100,321    
Investment (gains) losses on sales of securities, net (651 )   128     (463 )   (68 )   (417 )   4,466    
Sale of non-prime automobile portfolio                     1,536    
ORE expense 1,795     2,888     2,415     804     655     2,523    
Branch rationalization charges                     3,189    
FHLB restructuring charges 1,991     2,870                    
Tax effect on adjustments noted above [(18)] (819 )   (1,539 )   (510 )   (192 )   (62 )   (3,062 )  
Net income available to common shareholders excluding adjustments noted above $ 109,163     66,791     29,798     96,623     110,697     108,973    
             
Basic earnings per common share $ 1.42     0.83     0.37     1.26     1.45     1.31    
Adjustment due to investment (gains) losses on sales of securities, net (0.01 )               (0.01 )   0.06    
Adjustment due to sale of non-prime automobile portfolio                     0.02    
Adjustment due to ORE expense 0.02     0.04     0.03     0.01     0.01     0.04    
Adjustment due to branch consolidation expense                     0.04    
Adjustment due to FHLB restructuring charges 0.03     0.04                    
Adjustment due to tax effect on adjustments noted above [(18)] (0.01 )   (0.02 )   (0.01 )           (0.04 )  
Basic earnings per common share excluding adjustments noted above $ 1.45     0.89     0.39     1.27     1.45     1.43    
             
Diluted earnings per common share $ 1.42     0.83     0.37     1.26     1.44     1.31    
Adjustment due to investment (gains) losses on sales of securities, net (0.01 )               (0.01 )   0.06    
Adjustment due to sale of non-prime automobile portfolio                     0.02    
Adjustment due to ORE expense 0.02     0.04     0.03     0.01     0.01     0.03    
Adjustment due to branch consolidation expense                     0.04    
Adjustment due to FHLB restructuring charges 0.03     0.04                    
Adjustment due to tax effect on adjustments noted above [(18)] (0.01 )   (0.02 )   (0.01 )       0.01     (0.04 )  
Diluted earnings per common share excluding the adjustments noted above $ 1.45     0.89     0.39     1.27     1.45     1.42    
             
Revenue per diluted common share $ 3.95     3.63     3.47     3.32     3.64     3.39    
Adjustments as noted above (0.01 )               (0.01 )   0.08    
Revenue per diluted common share excluding adjustments noted above $ 3.94     3.63     3.47     3.32     3.63     3.47    
             
Book value per common share at quarter end $ 60.26     59.05     57.85     56.89     55.97     54.29    
Adjustment due to goodwill, core deposit and other intangible assets (24.58 )   (24.62 )   (24.65 )   (24.44 )   (24.37 )   (24.03 )  
Tangible book value per common share at quarter end [(9)] $ 35.68     34.43     33.20     32.45     31.60     30.26    
             
Equity method investment [(17)]            
Fee income from BHG, net of amortization $ 26,445     17,208     15,592     12,312     32,248     32,261    
Funding cost to support investment 1,231     2,134     2,122     2,345     2,366     2,399    
Pre-tax impact of BHG 25,214     15,074     13,470     9,967     29,882     29,862    
Income tax expense at statutory rates 6,591     3,940     3,521     2,605     7,811     7,806    
Earnings attributable to BHG $ 18,623     11,134     9,949     7,362     22,071     22,056    
             
Basic earnings per common share attributable to BHG $ 0.25     0.15     0.13     0.10     0.29     0.29    
Diluted earnings per common share attributable to BHG $ 0.25     0.15     0.13     0.10     0.29     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
    Nine months ended
(dollars in thousands, except per share data)   September September
  2020 2019
Net income available to common shareholders   $ 197,647     304,802    
Investment (gains) losses on sales of securities, net   (986 )   6,009    
Sale of non-prime automobile portfolio       1,536    
ORE expense   7,098     3,424    
Branch consolidation expense       3,189    
FHLB restructuring charges   4,861        
Tax effect on adjustments noted above [(18)]   (2,868 )   (3,701 )  
Net income available to common shareholders excluding adjustments noted above   $ 205,752     315,259    
       
Basic earnings per common share   $ 2.62     3.99    
Adjustment due to investment (gains) losses on sales of securities, net   (0.01 )   0.08    
Adjustment due to sale of non-prime automobile portfolio       0.02    
Adjustment due to ORE expense   0.09     0.04    
Adjustment due to branch consolidation expense       0.04    
Adjustment due to FHLB restructuring charges   0.06        
Adjustment due to tax effect on adjustments noted above [(18)]   (0.04 )   (0.05 )  
Basic earnings per common share excluding adjustments noted above   $ 2.72     4.12    
       
Diluted earnings per common share   2.62     3.97    
Adjustment due to investment (gains) losses on sales of securities, net   (0.01 )   0.08    
Adjustment due to sale of non-prime automobile portfolio       0.02    
Adjustment due to ORE expense   0.09     0.04    
Adjustment due to branch rationalization charges       0.04    
Adjustment due to FHLB restructuring charges   0.06        
Adjustment due to tax effect on adjustments noted above [(18)]   (0.04 )   (0.04 )  
Diluted earnings per common share excluding the adjustments noted above   $ 2.72     4.11    
       
Revenue per diluted common share   $ 11.06     10.11    
Adjustments as noted above   (0.02 )   0.08    
Revenue per diluted common share excluding adjustments noted above   $ 11.04     10.19    
       
Equity method investment [(17)]      
Fee income from BHG, net of amortization   $ 59,245     77,799    
Funding cost to support investment   5,487     7,144    
Pre-tax impact of BHG   53,758     70,655    
Income tax expense at statutory rates   14,052     18,469    
Earnings attributable to BHG   $ 39,706     52,186    
       
Basic earnings per common share attributable to BHG   $ 0.53     0.68    
Diluted earnings per common share attributable to BHG   $ 0.53     0.68    
       
This information is preliminary and based on company data available at the time of the presentation.
 
 
 
 
 
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
  Three months ended   Nine months ended
(dollars in thousands, except per share data) September June September   September September
2020 2020 2019   2020 2019
             
Return on average assets [(1)] 1.26 % 0.77 % 1.62 %   0.83 % 1.56 %
Adjustments as noted above 0.02 % 0.05