Pinnacle Financial Partners (PNFP) Q3 2024 earnings summary

Executive summary

• Q3 2024 delivered strong growth in loans, deposits, and earning assets, with net income up 10.9% to $142.9M and diluted EPS rising 10.1% to $1.86 year-over-year.

• Tangible book value per share increased 13% year-over-year to $55.12, and total assets reached $50.7B, up 6.7% year-over-year.

• Growth was driven by a repeatable model focused on hiring top bankers, expanding in high-growth Southeastern markets, and gaining market share from larger competitors.

• BHG segment showed resilient originations and placements, though income declined due to higher substitution losses.

• Culture, incentive alignment, and high associate engagement remain central, with recognition as a top workplace.

Financial highlights

• Net interest income for Q3 2024 was $351.5M, up 10.8% year-over-year, with NIM expanding to 3.22% from 3.06% in Q3 2023.

• Loans increased to $34.3B, up 5% since year-end and 6.7% annualized; deposits rose to $41.0B, with noninterest-bearing deposits at 20.1%.

• Noninterest income rose 26.9% in Q3, led by wealth management and deposit service charges; fee revenues (ex-BHG) up 8.3% sequentially.

• Noninterest expense increased 21.6% year-over-year, mainly from higher salaries, benefits, and infrastructure costs.

• Book value per share rose to $79.33, and tangible book value per share to $55.12.

Outlook and guidance

• 2024 guidance: loan growth 7%-8%, deposit growth 7%-9%, net interest income growth 7%-8%, fee income (ex-BHG) up 23%-26%.

• Charge-off guidance narrowed to 21-23 bps for 2024; provisioning at 32-35 bps of average loans.

• Management expects continued double-digit growth in 2025, supported by robust hiring and new office investments.

• Salary and benefit expenses projected to rise as hiring continues; equipment and occupancy costs to increase with new locations.

• Asset/liability management strategies will address interest rate risk, with two 25 bps Fed rate cuts assumed in late 2024.