Pinnacle Financial Partners (PNFP) Q2 2024 earnings summary

Executive summary

• Achieved inflection points in revenue, EPS, and adjusted PPNR, with strong underlying growth and resilience in challenging market conditions, though reported Q2 2024 diluted EPS was $0.64, down 74.8% year-over-year; adjusted EPS was $1.63, down 9.4% year-over-year but up 6.5% sequentially.

• Net income for Q2 2024 was $53.2M, a 73% decrease year-over-year; YTD net income was $177.1M, down 47%.

• Loans grew 3.3% to $33.8B and deposits increased 3.2% to $39.8B since year-end 2023, with continued expansion in strategic markets.

• Tangible book value per share grew 8.3% year-over-year to $52.92, and capital ratios remain strong.

• Significant capital optimization and balance sheet repositioning initiatives executed in Q2, including securities sales and a credit default swap.

Financial highlights

• Net interest income for Q2 2024 was $332.3M, up 5.3% year-over-year and 4.5% sequentially, with net interest margin expanding to 3.14% from 3.04% in Q1 2024 but down from 3.20% in Q2 2023.

• Adjusted noninterest income was $106.4M, up 8.4% year-over-year, while noninterest income fell 80% to $34.3M due to $72.1M in securities losses.

• Noninterest expense rose to $271.4M, up 28.2% year-over-year, driven by restructuring and optimization costs; adjusted noninterest expense was $243.0M, up 14.8%.

• Pre-tax, pre-provision net revenue (PPNR) was $95.2M, down 65.7% year-over-year; adjusted PPNR was $195.7M, down 3.1%.

• Provision for credit losses was $30.2M, with net charge-offs of $22.9M, up from $9.8M in Q2 2023.

Outlook and guidance

• 2024 year-end loan growth now expected at 7–9% over 2023, revised from prior 9–11% outlook.

• Net interest income growth outlook maintained at 8–10% year-over-year; 3Q24 NIM expected to rise from 2Q24.

• Core fee income growth for 2024 projected at 14–17% (excluding BHG and non-recurring items); BHG income expected to decrease 10–15% year-over-year.

• 2024 net charge-offs forecasted at 0.20–0.25% of average loans; ACL to remain consistent with June 30, 2024 levels barring macro changes.

• Efficiency ratio expected to remain elevated due to recent portfolio repositioning and expense increases.