PNFP Reports Fully Diluted EPS up 29.4% over Same Quarter Last Year

Loans up 11.6% over same quarter last year

NASHVILLE, Tenn.--()--Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today reported net income per diluted common share of $0.44 for the quarter ended Dec. 31, 2013, compared to net income per diluted common share of $0.34 for the quarter ended Dec. 31, 2012, an increase of 29.4 percent. Net income per diluted common share was $1.67 for the year ended Dec. 31, 2013, compared to net income per diluted common share of $1.10 for the year ended Dec. 31, 2012, an increase of 51.8 percent.

Included in 2013 results were net reductions approximating $0.05 in earnings per share consisting of an $877,000 charge due to a Federal Home Loan Bank advance restructuring in the first quarter of 2013 and $1.47 million in net losses on sales of investment securities that occurred during the first three quarters of 2013.

“Our 2013 results represent another remarkable year for our shareholders and associates,” said M. Terry Turner, Pinnacle’s president and chief executive officer. “Loans increased more than $432 million during 2013, an 11.6 percent increase over last year. Our fourth quarter 2013 average noninterest bearing deposit balances increased 20.5 percent from last year’s fourth quarter average balances, indicating that our deposit franchise continues to grow and gain momentum in two very attractive banking markets. We had a very successful recruiting year as we attracted several of the best bankers and investment professionals to our firm in 2013. Lastly, we initiated our quarterly cash dividend program in the fourth quarter of 2013. All of these factors give me great confidence in our ability to accomplish our targeted growth and profitability objectives in 2014 while continuing to enhance shareholder value.”

GROWING THE CORE EARNINGS CAPACITY OF THE FIRM:

  • Loans at Dec. 31, 2013 were a record $4.144 billion, an increase of $432.3 million from Dec. 31, 2012, reflecting year-over-year growth of 11.6 percent. Loan growth during the fourth quarter was $175.2 million compared to $43.9 million in the third quarter of 2013 and $187.0 million in the same quarter last year.
  • Average balances of noninterest bearing deposit accounts were $1.179 billion in the fourth quarter of 2013, up 7.2 percent from the third quarter of 2013 and up 20.5 percent over the same quarter last year.
  • Revenues (excluding securities gains and losses) for the quarter ended Dec. 31, 2013 were a record $57.5 million, an increase from $57.4 million in the third quarter of 2013 and up 7.7 percent over the $53.4 million for the same quarter last year.
  • The firm’s efficiency ratio for the quarter ended Dec. 31, 2013 was 56.8 percent compared to 59.5 percent in the third quarter of 2013 and 63.0 percent for the same quarter last year.

“I continue to be very impressed with the effectiveness of our client contact associates,” Turner said. “Their ability to know and meet the needs of their current clients as well as attract new clients is providing the kind of operating leverage necessary to achieve our long-term profitability targets. Despite an economic landscape that yields only modest opportunities for net loan growth, we continue to take market share from larger competitors and believe that will be the case throughout 2014 as these associates continue to build their books of business in Nashville and Knoxville.”

OTHER FOURTH QUARTER 2013 HIGHLIGHTS:

  • Revenue growth
    • Net interest income for the quarter ended Dec. 31, 2013 was $45.0 million, compared to $44.6 million in the third quarter of 2013 and $42.2 million for the fourth quarter of 2012. Net interest income for the fourth quarter of 2013 was up 6.5 percent year-over-year and is at its highest quarterly level since the firm’s founding in 2000.
      • Consistent with previously disclosed expectations, the firm’s net interest margin decreased to 3.70 percent for the quarter ended Dec. 31, 2013, down from 3.72 percent last quarter and 3.80 percent for the quarter ended Dec. 31, 2012.
    • Noninterest income for the quarter ended Dec. 31, 2013 was $12.5 million, compared to $11.4 million for the third quarter of 2013 and $13.1 million for the same quarter last year. Excluding securities gains and losses in each period, noninterest income was up 12.3 percent over the same quarter last year.
      • Wealth management revenues, which include investment services, insurance and trust fees, were $4.40 million during the fourth quarter of 2013, compared to $3.91 million during the third quarter of 2013 and $3.96 million during the fourth quarter of 2012.
      • Gains on mortgage loans sold, net of commissions, were $1.11 million during the fourth quarter of 2013, compared to $1.33 million during the third quarter of 2013 and $1.77 million during the fourth quarter of 2012.
      • Other noninterest income for the fourth quarter of 2013 increased by $1.47 million over the fourth quarter of 2012.

“We are pleased that 2013 total revenues grew 7.7 percent over 2012,” said Harold R. Carpenter, Pinnacle’s chief financial officer. “Given that our revenue growth is all organic, we believe that increase will compare favorably to other peer banks. Also, primarily due to our ability to produce meaningful net loan growth, we continued our track record for growing net interest income despite some shrinkage in the net interest margin. That said, we believe our net interest margin should remain between 3.70 and 3.80 percent in 2014.”

  • Noninterest and income tax expense
    • Noninterest expense for the year ended Dec. 31, 2013 was $129.3 million, compared to $138.2 million for the prior year. Noninterest expense for 2013, excluding other real estate expenses and FHLB restructuring charges, was $125.3 million, representing only a 0.6 percent increase over 2012. Noninterest expense for the quarter ended Dec. 31, 2013 was $32.6 million, compared to $33.3 million in the third quarter of 2013 and $34.9 million in the fourth quarter of 2012.
      • Salaries and employee benefits costs were up from the third quarter of 2013 by approximately $485,000 and by $1.94 million from the fourth quarter of 2012.
      • Other real estate expenses were $302,000 in the fourth quarter of 2013, compared to $700,000 in the third quarter of 2013 and $1.36 million in the fourth quarter of 2012.
    • Income tax expense was $7.27 million for the fourth quarter of 2013, compared to $7.31 million in the third quarter of 2013 and $6.28 million in the fourth quarter of 2012. The effective tax rate for 2013 is 32.8 percent compared to 33.0 percent in 2012.

“We are pleased to report that our expenses, excluding other real estate expenses and FHLB restructuring charges, ended the year at $125.3 million, representing only a 0.6 percent increase over 2012, further validating our ability to grow our revenues without significant incremental costs,” Carpenter said. “This represents a significant effort by the operational leaders and associates throughout our firm. As we move forward into 2014, as has been our strategy for the past two years, we will remain diligent on expense containment while continuing to focus on growing the core revenue capacity of our firm.

“We expect our expense base in 2014 to increase slightly over our fourth quarter run rate due to the usual merit raises that occur in the first part of each year. Also, we intend to continue hiring new revenue-producing associates in 2014, as we have throughout the history of the firm. We believe we have built a very effective platform going into 2014 that should allow our firm to achieve an enhanced level of profitability, consistently operating within or better than the target ranges for each of the key operating metrics we began discussing two years ago.”

  • Asset Quality
    • Nonperforming assets declined by $2.10 million from Sept. 30, 2013, a linked-quarter reduction of 5.92 percent and the 14th consecutive quarterly reduction. Nonperforming assets were 0.80 percent of total loans and ORE at Dec. 31, 2013, compared to 1.11 percent at Dec. 31, 2012 and 0.89 percent at Sept. 30, 2013.
    • Classified assets as a percentage of Pinnacle Bank’s Tier 1 capital plus allowance were 18.5 percent at Dec. 31, 2013, compared to 20.6 percent at Sept. 30, 2013 and 29.4 percent at Dec. 31, 2012.
    • Allowance for loan losses represented 1.64 percent of total loans at Dec. 31, 2013, compared to 1.70 percent at Sept. 30, 2013 and 1.87 percent at Dec. 31, 2012. The ratio of the allowance for loan losses to nonperforming loans increased to 373.8 percent at Dec. 31, 2013, from 336.6 percent at Sept. 30, 2013 and 304.2 percent at Dec. 31, 2012.
      • Net charge-offs were $1.54 million for the quarter ended Dec. 31, 2013, compared to $2.10 million for the third quarter of 2013 and $2.16 million for the quarter ended Dec. 31, 2012. Annualized net charge-offs for the quarter ended Dec. 31, 2013 were 0.15 percent compared to 0.24 percent for the quarter ended Dec. 31, 2012. Net charge-offs for the year ended Dec. 31, 2013 were 0.24 percent.
      • Provision for loan losses decreased from $2.49 million for the fourth quarter of 2012 to $2.23 million for the fourth quarter of 2013.

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. (CST) on Jan. 22, 2014 to discuss fourth quarter 2013 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 began operations in a single downtown Nashville location in October 2000 and has since grown to $5.6 billion in assets at Dec. 31, 2013. At Dec. 31, 2013, Pinnacle is the second-largest bank holding company headquartered in Tennessee, with 29 offices in eight Middle Tennessee counties and four offices in Knoxville. Additionally, Great Place to Work® named Pinnacle one of the best workplaces in the United States on its 2013 Best Small & Medium Workplaces list published in FORTUNE magazine. The American Banker also recognized Pinnacle as the best bank to work for in the country.

Additional information concerning Pinnacle, which is included in the NASDAQ Financial-100 Index, can be accessed at www.pnfp.com.

Certain of the statements in this release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “expect,” “anticipate,” “goal,” “objective,” “intend,” “plan,” “believe,” “should,” “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. All forward-looking statements are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of Pinnacle Financial to differ materially from any results expressed or implied by such forward-looking statements. Such risks include, without limitation, (i) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses; (ii) continuation of the historically low short-term interest rate environment; (iii) the inability of Pinnacle Financial to grow its loan portfolio; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) effectiveness of Pinnacle Financial’s asset management activities in improving, resolving or liquidating lower-quality assets; (vi) increased competition with other financial institutions; (vii) greater than anticipated adverse conditions in the national or local economies including the Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA, particularly in commercial and residential real estate markets; (viii) rapid fluctuations or unanticipated changes in interest rates on loans or deposits; (ix) the results of regulatory examinations; (x) the ability to retain large, uninsured deposits; (xi) the development of any new market other than Nashville or Knoxville; (xii) a merger or acquisition; (xiii) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including intangible assets; (xiv) the ability to attract additional financial advisors or to attract customers from other financial institutions; (xv) further deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xvi) inability to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies and required capital maintenance levels; (xvii) risks associated with litigation, including the applicability of insurance coverage; (xviii) approval of the declaration of any dividend by Pinnacle Financial’s board of directors and, (xix) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, including regulatory or legislative developments arising out of current unsettled conditions in the economy, including implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. A more detailed description of these and other risks is contained in Pinnacle Financial’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission on February 22, 2013 and Pinnacle Financial’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission in 2013. Many of such factors are beyond Pinnacle Financial’s ability to control or predict, and readers are cautioned not to put undue reliance on such forward-looking statements. Pinnacle Financial disclaims any obligation to update or revise any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise.

         
 
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS – UNAUDITED
 
        December 31, 2013     December 31, 2012  

ASSETS

Cash and noninterest-bearing due from banks $ 79,785,004 $ 51,946,542
Interest-bearing due from banks 124,509,486 111,535,083
Federal funds sold and other     4,644,247         1,807,044    
Cash and cash equivalents 208,938,737 165,288,669
 
Securities available-for-sale, at fair value 693,456,314 706,577,806

Securities held-to-maturity (fair value of $38,817,467 and $583,212 at December 31, 2013 and 2012, respectively)

39,795,649 574,863
Mortgage loans held-for-sale 12,850,339 41,194,639
 
Loans 4,144,493,486 3,712,162,430
Less allowance for loan losses     (67,969,693 )       (69,417,437 )  
Loans, net 4,076,523,793 3,642,744,993
 
Premises and equipment, net 72,649,574 75,804,895
Other investments 33,226,195 26,962,890
Accrued interest receivable 15,406,389 14,856,615
Goodwill 243,651,006 244,040,421
Core deposit and other intangible assets 3,840,750 5,103,273
Other real estate owned 15,226,136 18,580,097
Other assets     148,210,975         98,819,455    
Total assets   $ 5,563,775,857       $ 5,040,548,616    
 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits:
Noninterest-bearing $ 1,167,414,487 $ 985,689,460
Interest-bearing 884,294,802 760,786,247
Savings and money market accounts 1,962,714,398 1,662,256,403
Time     519,049,037         606,455,873    
Total deposits 4,533,472,724 4,015,187,983
Securities sold under agreements to repurchase 70,465,326 114,667,475
Federal Home Loan Bank advances 90,637,328 75,850,390
Subordinated debt and other borrowings 98,658,292 106,158,292
Accrued interest payable 792,703 1,360,598
Other liabilities     46,041,823         48,252,519    
Total liabilities 4,840,068,196 4,361,477,257
 

Stockholders’ equity:

Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding - -

Common stock, par value $1.00; 90,000,000 shares authorized; 35,221,941 shares and 34,696,597 shares issued and outstanding at December 31, 2013 and 2012, respectively

35,221,941 34,696,597
Additional paid-in capital 550,212,135 543,760,439
Retained earnings 142,298,199 87,386,689
Accumulated other comprehensive (loss) income, net of taxes     (4,024,614 )       13,227,634    
Stockholders’ equity     723,707,661         679,071,359    
Total liabilities and stockholders’ equity   $ 5,563,775,857       $ 5,040,548,616    
 
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
                 
Three Months Ended Twelve Months Ended
December 31, December 31,
        2013     2012     2013     2012  
Interest income:
Loans, including fees $ 42,811,184 $ 41,705,546 $ 169,252,739 $ 160,036,709
Securities
Taxable 3,644,318 3,574,460 14,504,464 16,931,417
Tax-exempt 1,636,905 1,604,162 6,378,345 6,576,701
Federal funds sold and other     312,119       318,900       1,146,867         1,876,731  
Total interest income     48,404,526       47,203,068       191,282,415         185,421,558  
 
Interest expense:
Deposits 2,644,630 3,730,199 11,721,387 16,842,852
Securities sold under agreements to repurchase 34,535 85,094 238,775 455,499
Federal Home Loan Bank advances and other borrowings     756,896       1,144,741       3,423,617         5,258,749  
Total interest expense     3,436,061       4,960,034       15,383,779         22,557,100  
Net interest income 44,968,465 42,243,034 175,898,636 162,864,458
Provision for loan losses     2,225,114       2,487,938       7,856,522         5,568,830  
Net interest income after provision for loan losses 42,743,351 39,755,096 168,042,114 157,295,628
 
Noninterest income:
Service charges on deposit accounts 2,739,076 2,622,709 10,557,528 9,917,754
Investment services 2,394,735 2,050,708 8,038,425 6,984,970
Insurance sales commissions 1,014,720 1,045,459 4,537,150 4,461,404
Gain on mortgage loans sold, net 1,113,000 1,768,428 6,243,411 6,698,618
Investment gains and losses on sales and impairments, net - 1,987,872 (1,466,475 ) 2,150,605
Trust fees 991,162 863,234 3,747,241 3,195,950
Other noninterest income     4,235,528       2,769,456       15,446,298         9,987,335  
Total noninterest income     12,488,221       13,107,866       47,103,578         43,396,636  
 
Noninterest expense:
Salaries and employee benefits 21,494,178 19,556,285 82,646,967 78,056,564
Equipment and occupancy 5,543,380 5,202,436 21,273,454 20,420,333
Other real estate expense 302,267 1,364,495 3,113,046 11,544,067
Marketing and other business development 1,140,233 1,276,050 3,638,941 3,635,810
Postage and supplies 559,362 562,805 2,249,950 2,379,730
Amortization of intangibles 246,676 683,430 1,262,524 2,738,994
Other noninterest expense     3,350,488       6,205,765       15,076,332         19,389,368  
Total noninterest expense     32,636,584       34,851,266       129,261,214         138,164,866  
Income before income taxes 22,594,988 18,011,696 85,884,478 62,527,398
Income tax expense     7,274,394       6,281,538       28,158,277         20,643,517  
Net income 15,320,594 11,730,158 57,726,201 41,883,881
Preferred dividends - - - 1,660,868
Accretion on preferred stock discount     -       -       -         2,153,172  
Net income available to common stockholders   $ 15,320,594     $ 11,730,158     $ 57,726,201       $ 38,069,841  
 
Per share information:
Basic net income per common share available to common stockholders   $ 0.45     $ 0.35     $ 1.69       $ 1.12  
Diluted net income per common share available to common stockholders   $ 0.44     $ 0.34     $ 1.67       $ 1.10  
 
Weighted average shares outstanding:
Basic 34,355,691 33,960,664 34,200,770 33,899,667
Diluted 34,765,424 34,527,479 34,509,261 34,487,808
 
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
                         
                                         

 

December September June March December September

(dollars in thousands)

      2013     2013     2013     2013     2012     2012  
 
Balance sheet data, at quarter end:
Commercial real estate - mortgage loans $ 1,383,435 1,326,838 1,308,873 1,278,639 1,178,196 1,167,136
Consumer real estate - mortgage loans 695,616 687,259 697,490 675,632 679,927 680,890
Construction and land development loans 316,191 319,973 298,509 306,433 313,552 312,788
Commercial and industrial loans 1,605,547 1,513,632 1,504,086 1,403,428 1,446,577 1,279,050
Consumer and other 143,704 121,600 116,407 108,232 93,910 85,300
Total loans 4,144,493 3,969,302 3,925,365 3,772,364 3,712,162 3,525,164
Allowance for loan losses (67,970 ) (67,280 ) (68,695 ) (69,411 ) (69,417 ) (69,092 )
Securities 733,252 743,885 727,889 724,004 707,153 739,280
Total assets 5,563,776 5,391,201 5,373,168 5,070,935 5,040,549 4,871,386
Noninterest-bearing deposits 1,167,414 1,138,421 1,098,887 977,496 985,689 844,480
Total deposits 4,533,473 4,333,543 4,096,578 3,902,895 4,015,188 3,719,287
Securities sold under agreements to repurchase 70,465 84,032 117,346 129,100 114,667 134,787
FHLB advances 90,637 115,671 325,762 200,796 75,850 190,887
Subordinated debt and other borrowings 98,658 99,283 99,908 105,533 106,158 106,783
Total stockholders’ equity 723,708 712,216 696,569 691,434 679,071 672,824
 
Balance sheet data, quarterly averages:
Total loans $ 3,981,214 3,932,218 3,845,476 3,681,686 3,580,056 3,488,736
Securities 731,651 739,625 745,969 714,104 719,861 766,547
Total earning assets 4,903,233 4,825,552 4,710,534 4,513,273 4,493,216 4,379,742
Total assets 5,388,371 5,313,003 5,210,600 4,992,018 4,964,521 4,860,394
Noninterest-bearing deposits 1,179,340 1,100,532 1,012,718 952,853 978,366 799,508
Total deposits 4,407,806 4,198,779 3,963,393 3,949,742 3,883,423 3,705,672
Securities sold under agreements to repurchase 85,096 110,123 129,550 130,740 142,333 136,918
FHLB advances 42,012 181,392 293,581 98,989 124,781 214,271
Subordinated debt and other borrowings 100,030 100,995 102,573 106,777 108,489 112,406
Total stockholders’ equity 722,919 705,275 699,559 688,241 680,383 669,673
 
Statement of operations data, for the three months ended:
Interest income $ 48,405 48,177 47,544 47,156 47,203 46,441
Interest expense     3,436       3,604       3,945       4,398       4,960       5,509    
Net interest income 44,969 44,573 43,599 42,758 42,243 40,932
Provision for loan losses     2,225       685       2,774       2,172       2,488       1,413    
Net interest income after provision for loan losses 42,744 43,888 40,825 40,586 39,755 39,519
Noninterest income 12,488 11,387 11,326 11,902 13,108 10,430
Noninterest expense     32,636       33,323       30,862       32,440       34,851       33,578    
Income before taxes 22,597 21,952 21,289 20,048 18,012 16,371
Income tax expense     7,274       7,305       6,978       6,600       6,282       5,022    
Net income   $

15,321

      14,647       14,311       13,448       11,730       11,349    
 
Profitability and other ratios:
Return on avg. assets (1) 1.13 % 1.09 % 1.10 % 1.09 % 0.94 % 0.93 %
Return on avg. equity (1) 8.41 % 8.24 % 8.21 % 7.92 % 6.86 % 6.74 %
Return on avg. tangible equity (1) 12.80 % 12.71 % 12.72 % 12.41 % 10.83 % 10.76 %
Dividend payout ratio (18) 20.40 % - - - - -
Net interest margin (1) (2) 3.70 % 3.72 % 3.77 % 3.90 % 3.80 % 3.78 %
Noninterest income to total revenue (3) 21.73 % 20.35 % 20.62 % 21.77 % 23.68 % 20.31 %
Noninterest income to avg. assets (1) 0.92 % 0.85 % 0.87 % 0.97 % 1.05 % 0.85 %
Noninterest exp. to avg. assets (1) 2.40 % 2.49 % 2.38 % 2.64 % 2.79 % 2.75 %

Noninterest expense (excluding ORE and FHLB restructuring charges) to avg. assets (1)

2.38 % 2.44 % 2.27 % 2.51 % 2.52 % 2.55 %
Efficiency ratio (4) 56.80 % 59.55 % 56.19 % 59.35 % 62.96 % 65.38 %
Avg. loans to average deposits 90.32 % 93.65 % 97.02 % 93.21 % 92.19 % 94.15 %
Securities to total assets 13.18 % 13.80 % 13.55 % 14.28 % 14.03 % 15.18 %
 
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
                       

 

Three months ended Three months ended

(dollars in thousands)

    December 31, 2013     December 31, 2012

Average
Balances

    Interest    

Rates/ Yields

   

Average
Balances

    Interest     Rates/ Yields
Interest-earning assets
Loans (1) $ 3,981,214 $ 42,811 4.28 % $ 3,580,056 $ 41,706 4.64 %
Securities
Taxable 552,960 3,644 2.61 % 541,678 3,574 2.63 %
Tax-exempt (2) 178,691 1,637 4.85 % 178,183 1,604 4.78 %
Federal funds sold and other   190,368       313     0.76 %       193,299       319     0.77 %
Total interest-earning assets 4,903,233 $ 48,405     3.98 % 4,493,216   47,203     4.24 %
Nonearning assets
Intangible assets 247,706 249,574
Other nonearning assets   237,432   221,731
Total assets $ 5,388,371 $ 4,964,521
 
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking $ 812,323 $ 386 0.19 % $ 688,196 $ 558 0.32 %
Savings and money market 1,883,788 1,420 0.30 % 1,611,639 1,816 0.45 %
Time   532,355       839     0.63 %       605,222       1,356     0.89 %
Total interest-bearing deposits 3,228,466 2,645 0.32 % 2,905,057 3,730 0.51 %
Securities sold under agreements to repurchase 85,096 35 0.16 % 142,333 85 0.24 %
Federal Home Loan Bank advances 42,012 103 0.97 % 124,781 390 1.24 %
Subordinated debt and other borrowings   100,030       653     2.60 %       108,489       755     2.77 %
Total interest-bearing liabilities 3,455,604 3,436 0.39 % 3,280,660 4,960 0.60 %
Noninterest-bearing deposits   1,179,340       -     -         978,366       -     -  
Total deposits and interest-bearing liabilities 4,634,944 $ 3,436     0.29 % 4,259,026 $ 4,960     0.46 %
Other liabilities 30,508 25,112

Stockholders’ equity

  722,919   680,383

Total liabilities and stockholders’ equity

$ 5,388,371 $ 4,964,521
Net interest income $ 44,969 $ 42,243
Net interest spread (3) 3.58 % 3.64 %
Net interest margin (4) 3.70 % 3.80 %
 
 
(1) Average balances of nonperforming loans are included in the above amounts.
(2) Yields computed on tax-exempt instruments on a tax equivalent basis.
(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 quarter ended December 31, 2013 would have been 3.68% compared to a net interest spread of 3.78% for the quarter ended December 31, 2012.
(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
                       

 

Year ended Year ended

(dollars in thousands)

    December 31, 2013     December 31, 2012

Average
Balances

    Interest     Rates/ Yields    

Average
Balances

    Interest     Rates/ Yields
Interest-earning assets
Loans (1) $ 3,861,166 $ 169,253 4.40 % $ 3,438,401 $ 160,037 4.66 %
Securities
Taxable 559,702 14,504 2.59 % 612,677 16,931 2.76 %
Tax-exempt (2) 173,202 6,378 4.91 % 182,217 6,577 4.82 %
Federal funds sold and other   144,948       1,147     0.93 %       155,876       1,877     1.33 %
Total interest-earning assets 4,739,018 $ 191,282     4.10 % 4,389,171 $ 185,422     4.29 %
Nonearning assets
Intangible assets 248,291 250,619
Other nonearning assets   240,018   233,764
Total assets $ 5,227,327 $ 4,873,554
 
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking $ 790,365 $ 1,928 0.24 % $ 677,632 $ 2,800 0.41 %
Savings and money market 1,714,154 5,795 0.34 % 1,575,174 7,884 0.50 %
Time   564,766       3,998     0.71 %       644,039       6,158     0.96 %
Total interest-bearing deposits 3,069,285 11,721 0.38 % 2,896,845 16,842 0.58 %
Securities sold under agreements to repurchase 113,742 239 0.21 % 134,989 455 0.34 %
Federal Home Loan Bank advances 153,912 690 0.45 % 202,338 2,237 1.11 %
Subordinated debt and other borrowings   102,571       2,733     2.67 %       105,131       3,024     2.87 %
Total interest-bearing liabilities 3,439,510 15,383 0.45 % 3,339,303 22,558 0.68 %
Noninterest-bearing deposits   1,062,089       -     -         809,268       -     -  
Total deposits and interest-bearing liabilities 4,501,599 $ 15,383     0.34 % 4,148,571 $ 22,558     0.54 %
Other liabilities 21,631 27,933

Stockholders’ equity

  704,097   697,050

Total liabilities and stockholders’ equity

$ 5,227,327 $ 4,873,554
Net interest income $ 175,899 $ 162,864
Net interest spread (3) 3.65 % 3.61 %
Net interest margin (4) 3.77 % 3.77 %
 
 
(1) Average balances of nonperforming loans are included in the above amounts.
(2) Yields computed on tax-exempt instruments on a tax equivalent basis.

(3) Yields realized on interest-earning 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 twelve months ended December 31, 2013 would have been 3.75% compared to a net interest spread of 3.75% for the twelve months ended December 31, 2012.

(4) Net interest margin is the result of 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
                         
                                         

 

December September June March December September

(dollars in thousands)

      2013     2013     2013     2013     2012     2012  
 
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans $ 18,183 19,989 20,561 21,837 22,823 36,571
Other real estate (ORE)     15,226       15,522       15,992       16,802       18,580       21,817    
Total nonperforming assets   $ 33,409       35,511       36,553       38,639       41,403       58,388    

Past due loans over 90 days and still accruing interest

$ 3,057 - 747 152 - 162
Troubled debt restructurings (5) $ 19,647 19,661 20,427 20,667 27,450 24,090
Net loan charge-offs $ 1,535 2,100 3,491 2,178 2,163 1,935
Allowance for loan losses to nonperforming loans 373.8 % 336.6 % 334.1 % 317.9 % 304.2 % 188.9 %
As a percentage of total loans:
Past due accruing loans over 30 days 0.31 % 0.33 % 0.39 % 0.23 % 0.29 % 0.35 %
Potential problem loans (6) 1.51 % 1.80 % 2.11 % 2.57 % 2.84 % 3.13 %
Allowance for loan losses 1.64 % 1.70 % 1.75 % 1.84 % 1.87 % 1.96 %
Nonperforming assets to total loans and ORE 0.80 % 0.89 % 0.93 % 1.02 % 1.11 % 1.65 %
Nonperforming assets to total assets 0.60 % 0.66 % 0.68 % 0.76 % 0.82 % 1.20 %
Classified asset ratio (Pinnacle Bank) (8) 18.5 % 20.6 % 23.3 % 26.4 % 29.4 % 33.4 %

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

0.24 % 0.27 % 0.30 % 0.24 % 0.29 % 0.31 %
Avg. commercial loan internal risk ratings (6) 4.5 4.5 4.5 4.5 4.5 4.6
 
Interest rates and yields:
Loans 4.28 % 4.33 % 4.41 % 4.58 % 4.64 % 4.62 %
Securities 3.16 % 3.04 % 3.03 % 3.34 % 3.16 % 3.19 %
Total earning assets 3.98 % 4.02 % 4.10 % 4.30 % 4.24 % 4.28 %
Total deposits, including non-interest bearing 0.24 % 0.26 % 0.30 % 0.35 % 0.38 % 0.43 %
Securities sold under agreements to repurchase 0.16 % 0.20 % 0.22 % 0.24 % 0.24 % 0.29 %
FHLB advances 0.97 % 0.38 % 0.31 % 0.78 % 1.24 % 1.15 %
Subordinated debt and other borrowings 2.60 % 2.62 % 2.72 % 2.72 % 2.77 % 2.84 %
Total deposits and interest-bearing liabilities 0.29 % 0.31 % 0.35 % 0.42 % 0.46 % 0.53 %
 
Pinnacle Financial Partners capital ratios (8):
Stockholders’ equity to total assets 13.0 % 13.2 % 13.0 % 13.6 % 13.5 % 13.8 %
Leverage 10.9 % 10.8 % 10.7 % 10.8 % 10.6 % 10.5 %
Tier one risk-based 11.8 % 12.0 % 11.7 % 11.7 % 11.8 % 12.1 %
Total risk-based 13.0 % 13.2 % 12.9 % 13.0 % 13.0 % 13.4 %
Tier one common equity to risk-weighted assets 10.1 % 10.2 % 9.9 % 9.9 % 9.9 % 10.1 %
Tangible common equity to tangible assets 9.0 % 9.0 % 8.8 % 9.2 % 9.0 % 9.2 %
Pinnacle Bank ratios:
Leverage 10.5 % 10.5 % 10.5 % 10.7 % 10.5 % 10.5 %
Tier one risk-based 11.3 % 11.6 % 11.5 % 11.6 % 11.6 % 12.0 %
Total risk-based 12.6 % 12.9 % 12.7 % 12.8 % 12.9 % 13.3 %
 
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
                         
                                         

 

December September June March December September

(dollars in thousands, except per share data)

      2013     2013     2013     2013     2012     2012  
 
Per share data:
Earnings – basic $ 0.45 0.43 0.42 0.40 0.35 0.33
Earnings – diluted $ 0.44 0.42 0.42 0.39 0.34 0.33
Common dividends per share $ 0.08 - - - - -
Book value per common share at quarter end (9) $ 20.55 20.27 19.86 19.74 19.57 19.39
Tangible common equity per common share $ 13.52 13.22 12.78 12.64 12.39 12.19
 
Weighted avg. common shares – basic 34,355,691 34,282,899 34,172,274 33,987,265 33,960,664 33,939,248
Weighted avg. common shares – diluted 34,765,424 34,606,567 34,431,054 34,206,202 34,527,479 34,523,076
Common shares outstanding 35,221,941 35,133,733 35,073,763 35,022,487 34,696,597 34,691,659
 
Investor information:
Closing sales price $ 32.53 29.81 25.71 23.36 18.84 19.32
High closing sales price during quarter $ 33.25 29.99 26.17 23.73 20.60 20.38
Low closing sales price during quarter $ 29.67 26.56 21.68 19.29 18.05 18.88
 
Other information:
Gains on mortgage loans sold:
Mortgage loan sales:
Gross loans sold $ 70,194 105,817 123,181 120,569 132,485 130,277
Gross fees (10) $ 1,842 2,470 3,346 3,158 3,269 3,193
Gross fees as a percentage of loans originated 2.62 % 2.33 % 2.72 % 2.62 % 2.47 % 2.45 %

Investment gains and losses on sales and impairments, net (17)

$ - (1,441 ) (25 ) - 1,988 (50 )
Brokerage account assets, at quarter-end (11) $ 1,560,349 1,445,461 1,387,172 1,333,676 1,242,379 1,244,100
Trust account managed assets, at quarter-end $ 605,324 576,190 630,322 515,970 496,264 465,983

Balance of commercial loan participations sold to other banks and serviced by Pinnacle, at quarter end

$ 52,703 50,797 45,585 42,721 39,668 40,662
Core deposits (12) $

4,102,032

3,903,000 3,771,425 3,638,402 3,674,662 3,480,410
Core deposits to total funding (12) 85.5 % 84.3 % 81.3 % 86.8 % 87.3 % 86.1 %
Risk-weighted assets $ 4,785,028 4,568,667 4,531,730 4,388,341 4,239,384 4,033,407
Total assets per full-time equivalent employee $ 7,408 7,305 7,335 7,038 6,900 6,715
Annualized revenues per full-time equivalent employee $ 303.5 300.8 300.8 307.7 301.4 281.6
Number of employees (full-time equivalent) 751.0 738.0 732.5 720.5 730.5 725.5
Associate retention rate (13) 94.4 % 93.9 % 93.0 % 91.2 % 93.2 % 93.4 %
 
Selected economic information (in thousands) (14):
Nashville MSA nonfarm employment - November 2013 831.8 814.7 817.1 807.1 799.7 793.8
Knoxville MSA nonfarm employment - November 2013 341.1 337.7 337.9 337.4 333.5 332.6
Nashville MSA unemployment - October 2013 6.8 % 6.8 % 6.8 % 6.2 % 6.3 % 6.6 %
Knoxville MSA unemployment - October 2013 7.1 % 7.1 % 7.2 % 6.5 % 6.2 % 6.4 %
Nashville residential median home price - December 2013 $ 198.8 197.9 205.9 169.0 181.0 177.1
Nashville inventory of residential homes for sale - December 2013 (16) 4.0 10.2 10.5 9.9 9.1 11.0
 

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
                         
December September June March December September
(dollars in thousands, except per share data)       2013     2013     2013     2013     2012     2012  
 
Tangible assets:
Total assets $ 5,563,776 5,391,201 5,373,168 5,070,935 5,040,549 4,871,386
Less: Goodwill (243,651 ) (243,808 ) (243,900 ) (244,012 ) (244,040 ) (244,045 )
Core deposit and other intangible assets     (3,841 )     (4,087 )     (4,334 )     (4,582 )     (5,103 )     (5,787 )  
Net tangible assets   $ 5,316,284       5,143,306       5,124,934       4,822,342       4,791,406       4,621,554    
 
Tangible equity:

Total stockholders’ equity

$ 723,708 712,216 696,569 691,434 679,071 672,824
Less: Goodwill (243,651 ) (243,808 ) (243,900 ) (244,012 ) (244,040 ) (244,045 )
Core deposit and other intangible assets     (3,841 )     (4,087 )     (4,334 )     (4,582 )     (5,103 )     (5,787 )  
Net tangible common equity   $ 476,216       464,321       448,335       442,840       429,928       422,992    
 
Ratio of tangible common equity to tangible assets     8.96 %     9.03 %     8.75 %     9.18 %     8.97 %     9.15 %  
 
 
For the three months ended
December September June March December September
  2013     2013     2013     2013     2012     2012  
 
Net interest income $ 44,969 44,573 43,599 42,758 42,243 40,932
 
Noninterest income 12,488 11,387 11,326 11,902 13,108 10,430
Less: Investments gains and losses on sales and impairments, net - 1,441 25 - (1,988 ) 50
Net noncredit related loan losses     -       -       771       -       -       -    

Noninterest income excluding investment gains and losses on sales and impairments, net, and noncredit related loan losses

    12,488       12,828       12,122       11,902       11,120       10,480    

Total revenues excluding investment gains and losses on sales and impairments, net, and noncredit related loan losses

    57,457       57,401       55,721       54,660       53,363       51,413    
 
Noninterest expense 32,637 33,323 30,862 32,440 34,851 33,578
Other real estate expense 302 699 1,391 721 1,365 2,399
FHLB restructuring charges     -       -       -       877       2,092       -    

Noninterest expense excluding the impact of other real estate expense and FHLB restructuring charges

    32,335       32,624       29,471       30,842       31,394       31,179    
 
Adjusted pre-tax pre-provision income (15)   $ 25,122       24,777       26,250       23,818       21,969       20,233    
 
 
Efficiency Ratio (4) 56.8 % 59.5 % 56.2 % 59.4 % 63.0 % 65.4 %
 
 
Total average assets   $ 5,388,371       5,313,003       5,210,600       4,992,018       4,964,521       4,860,394    
 
Noninterest expense (excluding ORE expense and FHLB restructuring charges) to avg. assets (1) 2.38 % 2.44 % 2.24 % 2.45 % 2.51 % 2.55 %
 

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.

6. Average risk ratings are based on an internal loan review system which assigns a numeric value of 1 to 10 to all loans to commercial entities based on their underlying risk characteristics as of the end of each quarter. A “1” risk rating is assigned to credits that exhibit Excellent risk characteristics, “2” exhibit Very Good risk characteristics, “3” Good, “4” Satisfactory, “5” Acceptable or Average, “6” Watch List, “7” Criticized, “8” Classified or Substandard, “9” Doubtful and “10” Loss (which are charged-off immediately). Additionally, loans rated “8” or worse that are not nonperforming or restructured loans are considered potential problem loans. Generally, consumer loans are not subjected to internal risk ratings.

7. Annualized net loan charge-offs to average loans ratios are computed by annualizing year-to-date net loan charge-offs and dividing the result by average loans for the year-to-date period.
8. Capital ratios 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 total assets - End of period total stockholders’ equity less end of period goodwill, core deposit and other intangibles as a percentage of end of period assets.

Leverage – Tier one capital (pursuant to risk-based capital guidelines) as a percentage of adjusted average assets.

Tier one risk-based – Tier one 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 loan losses.

Tier one common equity to risk weighted assets - Tier 1 capital (pursuant to risk-based capital guidelines) less the amount of any preferred stock or subordinated indebtedness that is considered as a component of tier 1 capital as a percentage of total risk-weighted assets.

9. Book value per share computed by dividing total stockholders’ equity less preferred stock and common stock warrants by common shares outstanding.
10. Amounts are included in the statement of operations in “Gains on loans sold, net”, net of commissions paid on such amounts.
11. At fair value, based on information obtained from Pinnacle’s third party broker/dealer for non-FDIC insured financial products and services.
12. Core deposits include all transaction deposit accounts, money market and savings accounts and all certificates of deposit issued in a denomination of less than $250,000.
The ratio noted above represents total core deposits divided by total funding, which includes total deposits, FHLB advances, securities sold under agreements to repurchase, subordinated indebtedness and all other interest-bearing liabilities.
13. Associate retention rate is computed by dividing the number of associates employed at quarter-end less the number of associates that have resigned in the last 12 months by the number of associates employed at quarter-end.
14. Employment and unemployment data is from BERC- MTSU & Bureau of Labor Statistics. Labor force data is seasonally adjusted. The most recent quarter data presented is as of the most recent month that data is available as of the release date. Historical data is subject to update by the BERC- MTSU & Bureau of Labor Statistics. Historical data is presented based on the most recently reported data available by the BERC- MTSU & Bureau of Labor Statistics. The Nashville home data is from the Greater Nashville Association of Realtors.

15. Adjusted pre-tax, pre-provision income excludes the impact of investment gains and losses on sales and impairments, net, and non-credit related loan losses as well as other real estate owned expenses and FHLB restructuring charges.

16. Represents months supply of homes currently listed with MLS based on current sales activity in the Nashville MSA.

17. Represents investment gains and losses on sales and impairments, net, occurring as a result of both credit losses and 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.

18. The dividend payout ratio is calculated as the sum of the annualized dividend rate divided by the trailing 12-months fully diluted earnings per share as of the dividend declaration date.
 

Contacts

Pinnacle Financial Partners, Inc.
Media Contact:
Nikki Klemmer, 615-743-6132
or
Financial Contact:
Harold Carpenter, 615-744-3742
www.pnfp.com

Sharing

Contacts

Pinnacle Financial Partners, Inc.
Media Contact:
Nikki Klemmer, 615-743-6132
or
Financial Contact:
Harold Carpenter, 615-744-3742
www.pnfp.com