PNFP Reports Fully Diluted EPS Up 20.5% Over Same Quarter Last Year

Return on average assets increases to 1.20 percent

NASHVILLE, Tenn.--()--Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today reported net income per fully diluted common share of $0.47 for the quarter ended March 31, 2014, compared to net income per fully diluted common share of $0.39 for the quarter ended March 31, 2013, an increase of 20.5 percent.

“First quarter was another strong quarter of execution against our targets for soundness, profitability and growth,” said M. Terry Turner, Pinnacle’s president and chief executive officer. “At 0.09 percent, the annualized rate of net charge-offs was back to our pre-recession levels. Our return on average assets of 1.20 percent was an all-time high. Average loans outstanding during the first quarter were also at an all-time high, increasing at an annualized growth rate of approximately 15 percent during the quarter.”

GROWING THE CORE EARNINGS CAPACITY OF THE FIRM:

  • Loans at March 31, 2014 were a record $4.182 billion, an increase of $37.2 million from Dec. 31, 2013, and $409.3 million from March 31, 2013, reflecting year-over-year growth of 10.9 percent.
  • Average balances of noninterest bearing deposit accounts were $1.129 billion in the first quarter of 2014, down 4.3 percent from the fourth quarter of 2013 and up 18.5 percent over the same quarter last year.
  • Revenues for the quarter ended March 31, 2014 were a record $58.6 million, an increase from $57.5 million in the fourth quarter of 2013 and up 7.3 percent over the $54.7 million for the same quarter last year.
  • The firm’s net interest margin for the quarter ended March 31, 2014 was 3.76 percent, compared to 3.70 percent in the fourth quarter of 2013 and 3.90 percent for the same quarter last year.
  • Return on average assets was 1.20 percent for the first quarter of 2014, compared to 1.09 percent for the same quarter last year. First quarter 2014 return on tangible common equity amounted to 13.47 percent, compared to first quarter 2013 amount of 12.41 percent.

“Despite the strong growth in average loans outstanding during the quarter, period ending loans for the first quarter of 2014 were up just $37.2 million, less than the average quarterly growth we expect during 2014 but generally in line with our expectations based on historical first quarter performance trends,” Turner said. “We continue to believe we will meet or exceed the three-year loan growth targets we established for 2012-2014.”

OTHER FIRST QUARTER 2014 HIGHLIGHTS:

  • Revenue growth
    • Net interest income for the quarter ended March 31, 2014 was $45.9 million, compared to $45.0 million in the fourth quarter of 2013 and $42.8 million for the first quarter of 2013. Net interest income for the first quarter of 2014 was up 7.4 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 increased to 3.76 percent for the quarter ended March 31, 2014, up from 3.70 percent last quarter and down from 3.90 percent for the quarter ended March 31, 2013.
    • Noninterest income for the quarter ended March 31, 2014 was $12.7 million, compared to $12.5 million for the fourth quarter of 2013 and $11.9 million for the same quarter last year. Noninterest income was up 7.0 percent over the same quarter last year.
      • Wealth management revenues, which include investment services, insurance and trust fees, were $4.7 million during the first quarter of 2014, compared to $4.4 million during the fourth quarter of 2013 and $4.1 million during the same quarter last year.
      • Gains on mortgage loans sold, net of commissions, were $952,000 during the first quarter of 2014, compared to $1.1 million during the fourth quarter of 2013 and $1.8 million during the same quarter last year.

“As anticipated, we experienced an increase in the net interest margin during the first quarter,” said Harold R. Carpenter, Pinnacle’s chief financial officer. “More importantly, our net interest income and our total revenues were at historic highs. Loan yields appear to be stabilizing, and growth in several fee categories contributed to the record first quarter revenues.”

  • Noninterest and income tax expense
    • Noninterest expense for the quarter ended March 31, 2014 was $33.7 million, compared to $32.6 million in the fourth quarter of 2013 and $32.4 million in the same quarter last year.
      • Salaries and employee benefits costs were up from the fourth quarter of 2013 by approximately $256,000 and by $2.2 million from the first quarter of 2013.
      • Other real estate expenses were $651,000 in the first quarter of 2014, compared to $302,000 in the fourth quarter of 2013 and $721,000 in the same quarter last year.
    • Income tax expense was $8.1 million for the first quarter of 2014, compared to $7.3 million in the fourth quarter of 2013 and $6.6 million in the same quarter last year.

“Excluding other real estate expenses, our first quarter noninterest expense represents an increase of 2.1 percent over our expense amount for the fourth quarter of last year,” Carpenter said. “As compared to the fourth quarter of 2013, the ratio of expense (excluding ORE expenses) to average assets rose to 2.43 percent in the first quarter due primarily to seasonal salary adjustments and increases in various other expense categories. Increasing the operating leverage of our firm remains a key objective of our leadership.

“We anticipate our expense base in 2014 will increase as we continue to recruit relationship managers and other professionals to our firm. However, we expect to make continued progress toward our target range of expenses to total assets of 2.10 to 2.30 percent in 2014 primarily through achievement of our loan growth targets.”

  • Asset Quality
    • Nonperforming assets declined by $2.8 million from Dec. 31, 2013, a linked-quarter reduction of 8.28 percent. Nonperforming assets were 0.73 percent of total loans and ORE at March 31, 2014, compared to 0.80 percent at Dec. 31, 2013 and 1.02 percent at March 31, 2013.
    • Allowance for loan losses represented 1.61 percent of total loans at March 31, 2014, compared to 1.64 percent at Dec. 31, 2013 and 1.84 percent at March 31, 2013. The ratio of the allowance for loan losses to nonperforming loans increased to 432.7 percent at March 31, 2014, from 373.8 percent at Dec. 31, 2013 and 317.9 percent at March 31, 2013.
      • Net charge-offs were $934,000 for the quarter ended March 31, 2014, compared to $1.54 million for the fourth quarter of 2013 and $2.18 million for the quarter ended March 31, 2013. Annualized net charge-offs as a percentage of average loans for the quarter ended March 31, 2014 were 0.09 percent compared to 0.24 percent for the quarter ended March 31, 2013.
      • Provision for loan losses decreased from $2.17 million for the first quarter of 2013 to $488,000 for the first quarter of 2014 and $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. (CDT) on April 15, 2014 to discuss first quarter 2014 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 March 31, 2014. At March 31, 2014, 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 25, 2014. 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
       
      March 31, 2014     December 31, 2013

ASSETS

Cash and noninterest-bearing due from banks $ 94,172,230 $ 79,785,004
Interest-bearing due from banks 75,826,385 124,509,486
Federal funds sold and other   938,792         4,644,247  
Cash and cash equivalents 170,937,407 208,938,737
 
Securities available-for-sale, at fair value 735,400,911 693,456,314

Securities held-to-maturity (fair value of $38,194,567 and $38,817,467 at March 31, 2014 and December 31, 2013, respectively)

38,733,099 39,795,649
Mortgage loans held-for-sale 13,970,926 12,850,339
 
Loans 4,181,686,799 4,144,493,486
Less allowance for loan losses   (67,523,575 )       (67,969,693 )
Loans, net 4,114,163,224 4,076,523,793
 
Premises and equipment, net 71,627,370 72,649,574
Other investments 33,358,506 33,226,195
Accrued interest receivable 17,219,090 15,406,389
Goodwill 243,568,203 243,651,006
Core deposit and other intangible assets 3,603,074 3,840,750
Other real estate owned 15,037,823 15,226,136
Other assets   143,312,957         148,210,975  
Total assets $ 5,600,932,590       $ 5,563,775,857  
 

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:
Noninterest-bearing $ 1,180,202,107 $ 1,167,414,487
Interest-bearing 912,387,013 884,294,802
Savings and money market accounts 1,902,452,916 1,962,714,398
Time   505,534,750         519,049,037  
Total deposits 4,500,576,786 4,533,472,724
Securities sold under agreements to repurchase 68,092,650 70,465,326
Federal Home Loan Bank advances 150,604,286 90,637,328
Subordinated debt and other borrowings 98,033,292 98,658,292
Accrued interest payable 745,180 792,703
Other liabilities   40,383,743         46,041,823  
Total liabilities 4,858,435,937 4,840,068,196
 
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; 35,567,268 shares and 35,221,941 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively

35,567,268 35,221,941
Additional paid-in capital 551,461,564 550,212,135
Retained earnings 155,840,829 142,298,199
Accumulated other comprehensive loss, net of taxes   (373,008 )       (4,024,614 )
Stockholders’ equity   742,496,653         723,707,661  
Total liabilities and stockholders’ equity $ 5,600,932,590       $ 5,563,775,857  
 
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
March 31,
      2014     2013
Interest income:
Loans, including fees $ 43,695,658 $ 41,514,213
Securities
Taxable 3,720,279 3,670,934
Tax-exempt 1,597,797 1,656,408
Federal funds sold and other   277,058       314,772
Total interest income   49,290,792       47,156,327
 
Interest expense:
Deposits 2,595,240 3,412,396
Securities sold under agreements to repurchase 30,515 77,816
Federal Home Loan Bank advances and other borrowings   757,222       907,641
Total interest expense   3,382,977       4,397,853
Net interest income 45,907,815 42,758,474
Provision for loan losses   487,638       2,172,404
Net interest income after provision for loan losses 45,420,177 40,586,070
 
Noninterest income:
Service charges on deposit accounts 2,790,968 2,480,244
Investment services 2,127,834 1,792,640
Insurance sales commissions 1,384,921 1,393,304
Gains on mortgage loans sold, net 952,222 1,813,488
Trust fees 1,145,751 944,332
Other noninterest income   4,334,360       3,478,348
Total noninterest income   12,736,056       11,902,356
 
Noninterest expense:
Salaries and employee benefits 21,749,960 19,572,356
Equipment and occupancy 5,709,030 5,113,050
Other real estate expense 651,152 720,962
Marketing and other business development 908,901 790,671
Postage and supplies 560,614 591,488
Amortization of intangibles 237,675 520,987
Other noninterest expense   3,832,221       5,130,495
Total noninterest expense   33,649,553       32,440,009
Income before income taxes 24,506,680 20,048,417
Income tax expense   8,139,557       6,600,292
Net income $ 16,367,123     $ 13,448,125
 
Per share information:
Basic net income per common share $ 0.47     $ 0.40
Diluted net income per common share $ 0.47     $ 0.39
 
Weighted average shares outstanding:
Basic 34,602,337 33,987,265
Diluted 34,966,600 34,206,202
 
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) March December September June March December
    2014     2013     2013     2013     2013     2012
 
Balance sheet data, at quarter end:
Commercial real estate - mortgage loans $ 1,456,172 1,383,435 1,326,838 1,308,873 1,278,639 1,178,196
Consumer real estate - mortgage loans 703,592 695,616 687,259 697,490 675,632 679,927
Construction and land development loans 294,055 316,191 319,973 298,509 306,433 313,552
Commercial and industrial loans 1,568,937 1,605,547 1,513,632 1,504,086 1,403,428 1,446,577
Consumer and other 158,931 143,704 121,600 116,407 108,232 93,910
Total loans 4,181,687 4,144,493 3,969,302 3,925,365 3,772,364 3,712,162
Allowance for loan losses (67,524 ) (67,970 ) (67,280 ) (68,695 ) (69,411 ) (69,417 )
Securities 774,134 733,252 743,885 727,889 724,004 707,153
Total assets 5,600,933 5,563,776 5,391,201 5,373,168 5,070,935 5,040,549
Noninterest-bearing deposits 1,180,202 1,167,414 1,138,421 1,098,887 977,496 985,689
Total deposits 4,500,577 4,533,473 4,333,543 4,096,578 3,902,895 4,015,188
Securities sold under agreements to repurchase 68,093 70,465 84,032 117,346 129,100 114,667
FHLB advances 150,604 90,637 115,671 325,762 200,796 75,850
Subordinated debt and other borrowings 98,033 98,658 99,283 99,908 105,533 106,158
Total stockholders’ equity 742,497 723,708 712,216 696,569 691,434 679,071
 
Balance sheet data, quarterly averages:
Total loans $ 4,130,289 3,981,214 3,932,218 3,845,476 3,681,686 3,580,056
Securities 748,539 731,651 739,625 745,969 714,104 719,861
Total earning assets 5,023,692 4,903,233 4,825,552 4,710,534 4,513,273 4,493,216
Total assets 5,514,031 5,388,371 5,313,003 5,210,600 4,992,018 4,964,521
Noninterest-bearing deposits 1,128,743 1,179,340 1,100,532 1,012,718 952,853 978,366
Total deposits 4,509,493 4,407,806 4,198,779 3,963,393 3,949,742 3,883,423
Securities sold under agreements to repurchase 62,500 85,096 110,123 129,550 130,740 142,333
FHLB advances 83,787 42,012 181,392 293,581 98,989 124,781
Subordinated debt and other borrowings 98,651 100,030 100,995 102,573 106,777 108,489
Total stockholders’ equity 740,743 722,919 705,275 699,559 688,241 680,383
 
Statement of operations data, for the three months ended:
Interest income $ 49,291 48,405 48,177 47,544 47,156 47,203
Interest expense   3,383       3,436       3,604       3,945       4,398       4,960  
Net interest income 45,908 44,969 44,573 43,599 42,758 42,243
Provision for loan losses   488       2,225       685       2,774       2,172       2,488  
Net interest income after provision for loan losses 45,420 42,744 43,888 40,825 40,586 39,755
Noninterest income 12,736 12,488 11,387 11,326 11,902 13,108
Noninterest expense   33,650       32,637       33,323       30,862       32,440       34,851  
Income before taxes 24,507 22,596 21,952 21,289 20,048 18,012
Income tax expense   8,140       7,274       7,305       6,978       6,600       6,282  
Net income $ 16,367       15,321       14,647       14,311       13,448       11,730  
 
Profitability and other ratios:
Return on avg. assets (1) 1.20 % 1.13 % 1.09 % 1.10 % 1.09 % 0.94 %
Return on avg. equity (1) 8.96 % 8.41 % 8.24 % 8.21 % 7.92 % 6.86 %
Return on avg. tangible equity (1) 13.47 % 12.81 % 12.73 % 12.75 % 12.41 % 10.83 %
Dividend payout ratio (18) 19.16 % 20.38 % - - - -
Net interest margin (1) (2) 3.76 % 3.70 % 3.72 % 3.77 % 3.90 % 3.80 %
Noninterest income to total revenue (3) 21.72 % 21.73 % 20.35 % 20.62 % 21.77 % 23.68 %
Noninterest income to avg. assets (1) 0.94 % 0.92 % 0.85 % 0.87 % 0.97 % 1.05 %
Noninterest exp. to avg. assets (1) 2.47 % 2.40 % 2.49 % 2.38 % 2.64 % 2.79 %

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

2.43 % 2.38 % 2.44 % 2.27 % 2.51 % 2.52 %
Efficiency ratio (4) 57.38 % 56.80 % 59.55 % 56.19 % 59.35 % 62.96 %
Avg. loans to average deposits 91.59 % 90.32 % 93.65 % 97.02 % 93.21 % 92.19 %
Securities to total assets 13.82 % 13.18 % 13.80 % 13.55 % 14.28 % 14.03 %
 
 
 
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
    March 31, 2014     March 31, 2013

Average
Balances

Interest

Rates/
Yields

Average
Balances

Interest

Rates/
Yields

Interest-earning assets
Loans (1) $ 4,130,289 $ 43,696 4.30 % $ 3,681,686 $ 41,514 4.58 %
Securities

 

Taxable 573,330 3,720 2.63 % 537,951 3,671 2.77 %
Tax-exempt (2) 175,209 1,598 4.94 % 176,153 1,656 5.09 %
Federal funds sold and other   144,864       277     0.92 %       117,483       315     1.25 %
Total interest-earning assets 5,023,692 $ 49,291     4.04 % 4,513,273   47,156     4.30 %
Nonearning assets
Intangible assets 247,360 248,940
Other nonearning assets   242,979   229,805
Total assets $ 5,514,031 $ 4,992,018
 
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking $ 921,034 $ 429 0.19 % $ 775,136 $ 606 0.32 %
Savings and money market 1,951,787 1,427 0.30 % 1,632,715 1,624 0.40 %
Time   507,929       739     0.59 %       589,038       1,182     0.81 %
Total interest-bearing deposits 3,380,750 2,595 0.31 % 2,996,889 3,412 0.46 %
Securities sold under agreements to repurchase 62,500 31 0.20 % 130,740 78 0.24 %
Federal Home Loan Bank advances 83,787 123 0.59 % 98,989 191 0.78 %
Subordinated debt and other borrowings   98,651       634     2.61 %       106,777       717     2.72 %
Total interest-bearing liabilities 3,625,688 3,383 0.38 % 3,333,395 4,398 0.54 %
Noninterest-bearing deposits   1,128,743       -     -         952,853       -     -  
Total deposits and interest-bearing liabilities 4,754,431 $ 3,383     0.29 % 4,286,248 $ 4,398     0.42 %
Other liabilities 18,857 17,529
Stockholders' equity   740,743   688,241
Total liabilities and stockholders' equity $ 5,514,031 $ 4,992,018
Net interest income $ 45,908 $ 42,758
Net interest spread (3) 3.66 % 3.76 %
Net interest margin (4) 3.76 % 3.90 %
 
 
 
(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 March 31, 2014 would have been 3.75% compared to a net interest spread of 3.88% for the quarter ended March 31, 2013.
(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) March December September June March December
    2014     2013     2013     2013     2013     2012
 
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans $ 15,606 18,183 19,989 20,561 21,837 22,823
Other real estate (ORE)   15,038       15,226       15,522       15,992       16,802       18,580  
Total nonperforming assets $ 30,644       33,409       35,511       36,553       38,639       41,403  

Past due loans over 90 days and still accruing interest

$ 7,944 3,057 - 747 152 -
Troubled debt restructurings (5) $ 15,108 19,647 19,661 20,427 20,667 27,450
Net loan charge-offs $ 934 1,535 2,100 3,491 2,178 2,163
Allowance for loan losses to nonperforming loans 432.7 % 373.8 % 336.6 % 334.1 % 317.9 % 304.2 %
As a percentage of total loans:
Past due accruing loans over 30 days 0.22 % 0.31 % 0.33 % 0.39 % 0.23 % 0.29 %
Potential problem loans (6) 2.01 % 1.51 % 1.80 % 2.11 % 2.57 % 2.84 %
Allowance for loan losses 1.61 % 1.64 % 1.70 % 1.75 % 1.84 % 1.87 %
Nonperforming assets to total loans and ORE 0.73 % 0.80 % 0.89 % 0.93 % 1.02 % 1.11 %
Nonperforming assets to total assets 0.55 % 0.60 % 0.66 % 0.68 % 0.76 % 0.82 %
Classified asset ratio (Pinnacle Bank) (8) 21.2 % 18.5 % 20.6 % 23.3 % 26.4 % 29.4 %

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

0.09 % 0.24 % 0.27 % 0.30 % 0.24 % 0.29 %
Avg. commercial loan internal risk ratings (6) 4.5 4.5 4.5 4.5 4.5 4.5
 
Interest rates and yields:
Loans 4.30 % 4.28 % 4.33 % 4.41 % 4.58 % 4.64 %
Securities 3.17 % 3.16 % 3.04 % 3.03 % 3.34 % 3.16 %
Total earning assets 4.04 % 3.98 % 4.02 % 4.10 % 4.30 % 4.24 %
Total deposits, including non-interest bearing 0.23 % 0.24 % 0.26 % 0.30 % 0.35 % 0.38 %
Securities sold under agreements to repurchase 0.20 % 0.16 % 0.20 % 0.22 % 0.24 % 0.24 %
FHLB advances 0.59 % 0.97 % 0.38 % 0.31 % 0.78 % 1.24 %
Subordinated debt and other borrowings 2.61 % 2.60 % 2.62 % 2.72 % 2.72 % 2.77 %
Total deposits and interest-bearing liabilities 0.29 % 0.29 % 0.31 % 0.35 % 0.42 % 0.46 %
 
Pinnacle Financial Partners capital ratios (8):
Stockholders’ equity to total assets 13.3 % 13.0 % 13.2 % 13.0 % 13.6 % 13.5 %
Leverage 11.0 % 10.9 % 10.8 % 10.7 % 10.8 % 10.6 %
Tier one risk-based 12.2 % 11.8 % 12.0 % 11.7 % 11.7 % 11.8 %
Total risk-based 13.5 % 13.0 % 13.2 % 12.9 % 13.0 % 13.0 %
Tier one common equity to risk-weighted assets 10.5 % 10.1 % 10.2 % 9.9 % 9.9 % 9.9 %
Tangible common equity to tangible assets 9.3 % 9.0 % 9.0 % 8.8 % 9.2 % 9.0 %
Pinnacle Bank ratios:
Leverage 10.5 % 10.5 % 10.5 % 10.5 % 10.7 % 10.5 %
Tier one risk-based 11.7 % 11.3 % 11.6 % 11.5 % 11.6 % 11.6 %
Total risk-based 12.9 % 12.6 % 12.9 % 12.7 % 12.8 % 12.9 %
 
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) March December September June March December
    2014     2013     2013     2013     2013     2012
 
Per share data:
Earnings – basic $ 0.47 0.45 0.43 0.42 0.40 0.35
Earnings – diluted $ 0.47 0.44 0.42 0.42 0.39 0.34
Common dividends per share $ 0.08 0.08 - - - -
Book value per common share at quarter end (9) $ 20.88 20.55 20.27 19.86 19.74 19.57
Tangible common equity per common share $ 13.93 13.52 13.22 12.78 12.64 12.39
 
Weighted avg. common shares – basic 34,602,337 34,355,691 34,282,899 34,172,274 33,987,265 33,960,664
Weighted avg. common shares – diluted 34,966,600 34,765,424 34,606,567 34,431,054 34,206,202 34,527,479
Common shares outstanding 35,567,268 35,221,941 35,133,733 35,073,763 35,022,487 34,696,597
 
Investor information:
Closing sales price $ 37.49 32.53 29.81 25.71 23.36 18.84
High closing sales price during quarter $ 38.64 33.25 29.99 26.17 23.73 20.60
Low closing sales price during quarter $ 31.02 29.67 26.56 21.68 19.29 18.05
 
Other information:
Gains on mortgage loans sold:
Mortgage loan sales:
Gross loans sold $ 61,290 70,194 105,817 123,181 120,569 132,485
Gross fees (10) $ 1,504 1,842 2,470 3,346 3,158 3,269
Gross fees as a percentage of loans originated 2.45 % 2.62 % 2.33 % 2.72 % 2.62 % 2.47 %
Investment gains and losses on sales and impairments, net (17) $ - - (1,441 ) (25 ) - 1,988
Brokerage account assets, at quarter-end (11) $ 1,611,232 1,560,349 1,445,461 1,387,172 1,333,676 1,242,379
Trust account managed assets, at quarter-end $ 613,440 605,324 576,190 630,322 515,970 496,264

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

$ 53,959 52,703 50,797 45,585 42,721 39,668
Core deposits (12) $ 4,087,477 4,100,037 3,903,000 3,771,425 3,537,860 3,674,662
Core deposits to total funding (12) 84.8 % 85.5 % 84.3 % 81.3 % 84.0 % 87.3 %
Risk-weighted assets $ 4,740,545 4,785,028 4,568,667 4,531,730 4,388,341 4,239,384
Total assets per full-time equivalent employee $ 7,528 7,408 7,305 7,335 7,038 6,900
Annualized revenues per full-time equivalent employee $ 319.7 303.5 300.8 300.8 307.7 301.4
Number of employees (full-time equivalent) 744.0 751.0 738.0 732.5 720.5 730.5
Associate retention rate (13) 95.6 % 94.4 % 93.9 % 93.0 % 91.2 % 93.2 %
 
Selected economic information (in thousands) (14):
Nashville MSA nonfarm employment - February 2014 827.5 817.3 814.7 817.1 807.1 799.7
Knoxville MSA nonfarm employment - February 2014 337.1 334.2 337.7 337.9 337.4 333.5
Nashville MSA unemployment - January 2014 5.2 % 5.8 % 6.5 % 6.6 % 6.2 % 6.3 %
Knoxville MSA unemployment - January 2014 5.6 % 6.3 % 7.0 % 6.9 % 6.6 % 6.5 %
Nashville residential median home price - March 2014 $ 195.0 198.8 197.9 205.9 169.0 181.0
Nashville inventory of residential homes for sale - March 2014 (16) 4.6 4.0 10.2 10.5 9.9 9.1
 
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
 
March December September June March December
(dollars in thousands, except per share data)     2014     2013     2013     2013     2013     2012
 
Tangible assets:
Total assets $ 5,600,933 5,563,776 5,391,201 5,373,168 5,070,935 5,040,549
Less: Goodwill (243,568 ) (243,651 ) (243,808 ) (243,900 ) (244,012 ) (244,040 )
Core deposit and other intangible assets   (3,603 )     (3,841 )     (4,087 )     (4,334 )     (4,582 )     (5,103 )
Net tangible assets $ 5,353,762       5,316,284       5,143,306       5,124,934       4,822,342       4,791,406  
 
Tangible equity:
Total stockholders' equity $ 742,497 723,708 712,216 696,569 691,434 679,071
Less: Goodwill (243,568 ) (243,651 ) (243,808 ) (243,900 ) (244,012 ) (244,040 )
Core deposit and other intangible assets   (3,603 )     (3,841 )     (4,087 )     (4,334 )     (4,582 )     (5,103 )
Net tangible common equity $ 495,326       476,216       464,321       448,335       442,840       429,928  
 
Ratio of tangible common equity to tangible assets   9.25 %     8.96 %     9.03 %     8.75 %     9.18 %     8.97 %
 
 
For the three months ended
March December September June March December
2014     2013     2013     2013     2013     2012
 
Net interest income $ 45,908 44,969 44,573 43,599 42,758 42,243
 
Noninterest income 12,736 12,488 11,387 11,326 11,902 13,108
Less: Investment gains and losses on sales and impairments, net - - 1,441 25 - (1,988 )
Net noncredit related loan losses   -       -       -       771       -       -  

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

  12,736       12,488       12,828       12,122       11,902       11,120  

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

  58,644       57,457       57,401       55,721       54,660       53,363  
 
Noninterest expense 33,650 32,637 33,323 30,862 32,440 34,851
Less: Other real estate expense 651 302 699 1,391 721 1,365
FHLB restructuring charges   -       -       -       -       877       2,092  

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

  32,999       32,335       32,624       29,471       30,842       31,394  
 
Adjusted pre-tax pre-provision income (15) $ 25,645       25,122       24,777       26,250       23,818       21,969  
 
 
Efficiency Ratio (4) 57.4 % 56.8 % 59.5 % 56.2 % 59.4 % 63.0 %
 
 
Total average assets $ 5,514,031       5,388,371       5,313,003       5,210,600       4,992,018       4,964,521  
 
Noninterest expense (excluding ORE expense and FHLB restructuring charges) to avg. assets (1) 2.43 % 2.38 % 2.44 % 2.24 % 2.45 % 2.51 %
 
 
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 (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