Financial Performance - Diluted net income per common share for Q1 2025 was $1.77, up from $1.57 in Q1 2024, representing a 12.7% increase[142] - Net interest income for Q1 2025 was $364.4 million, up $46.4 million or 14.6% compared to Q1 2024[143] - Noninterest income decreased by $11.7 million or 10.6% in Q1 2025 compared to Q1 2024, primarily due to a prior year mortgage servicing right[145] - The efficiency ratio for Q1 2025 was 59.5%, compared to 56.6% in Q1 2024, indicating increased expenses relative to revenue[148] - Income tax expense for Q1 2025 was $30.0 million, with an effective tax rate of 17.6%, down from 18.1% in Q1 2024[149] Loan and Deposit Growth - Total loans increased to $36.1 billion at March 31, 2025, a rise of $651 million or 1.8% from December 31, 2024[150] - Total deposits reached $44.5 billion at March 31, 2025, an increase of $1.6 billion or 3.8% from December 31, 2024[150] - The average balance of loans increased to $36.04 billion for the three months ended March 31, 2025, with an interest yield of 6.24%, compared to $33.04 billion and 6.67% in the same period in 2024[157] - Total loans outstanding increased to $36.1 billion as of March 31, 2025, compared to $35.5 billion at December 31, 2024[192] - Total deposits rose by $1.6 billion to $44.5 billion between December 31, 2024, and March 31, 2025[192] Credit Quality - Provision for credit losses decreased to $17.0 million in Q1 2025, down 50.8% from $34.5 million in Q1 2024[144] - The allowance for credit losses was $417.5 million at March 31, 2025, slightly up from $414.5 million at December 31, 2024[151] - Loans past due 30 to 89 days decreased to $55.26 million from $62.13 million as of December 31, 2024, while loans past due 90 days or more decreased to $96.26 million from $103.95 million[198] - Nonperforming assets increased to $175.2 million from $149.1 million at December 31, 2024, with nonaccrual loans accounting for $171.6 million[199] - The allowance for credit losses (ACL) was approximately $417.5 million as of March 31, 2025, representing 1.16% of total loans, a slight decrease from 1.17% at December 31, 2024[200] Noninterest Expenses - Noninterest expense increased by $33.1 million or 13.7% in Q1 2025, driven by a rise in salaries and employee benefits[146] - Total noninterest expense for the three months ended March 31, 2025, was $275.5 million, an increase of 13.7% from $242.4 million in the same period last year[179] - Salaries and employee benefits increased by $26.1 million to $172.1 million for the three months ended March 31, 2025, reflecting a rise of 17.9% compared to the same period in 2024[179] - Cash incentive expense rose to $20.3 million for the three months ended March 31, 2025, compared to $13.6 million in the same period last year, an increase of 49.0%[182] - Equipment and occupancy expenses rose to $46.2 million for the three months ended March 31, 2025, up from $39.6 million in the same period of 2024, partly due to the relocation of corporate headquarters[185] Investment and Funding - The investment securities portfolio amounted to $8.7 billion at March 31, 2025, compared to $8.4 billion at December 31, 2024, with a tax equivalent yield of 4.30%[205] - Core funding as a percentage of total funding increased from 83.9% at December 31, 2024, to 85.1% at March 31, 2025[209] - Total noncore funding decreased to $7.04 billion at March 31, 2025, from $7.33 billion at December 31, 2024[210] - Pinnacle Bank had approximately $2.6 billion in additional availability with the Federal Home Loan Bank as of March 31, 2025[208] - The company had approximately $6.5 billion in available Federal Reserve discount window lines of credit as of March 31, 2025[238] Shareholder Actions - Shareholders' equity increased from $6.4 billion at December 31, 2024, to $6.5 billion at March 31, 2025[212] - During Q1 2025, the bank paid dividends of $30.4 million, remaining within regulatory limits[216] - The company authorized a new share repurchase program for up to $125 million, effective through March 31, 2026[215] Economic and Regulatory Factors - The company’s CECL models utilize macroeconomic factors such as unemployment rate, GDP, and commercial property price index to estimate future credit losses[201] - Management's model governance and validation processes are subject to regulatory review to ensure compliance with guidelines[228] - The liquidity coverage ratio was in compliance as of March 31, 2025, indicating adequate liquidity management[234] - Interest rate sensitivity modeling showed a more neutral position as of March 31, 2025, compared to the previous year[222] - The company expects to continue incurring costs associated with planned technology improvements to enhance infrastructure[241]

Forward Looking Statements All statements, other than statements of historical fact, included in this presentation, 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," "aim," "anticipate," "intend," "may," "should," "plan," "looking for," "believe," "seek," "estimate" and similar expressions are intended to identify such forward-looking ...

Financial Data and Key Metrics Changes - Pinnacle Financial Partners reported a 14.2% revenue growth in Q1 2025 compared to Q1 2024, continuing a double-digit growth trajectory with a 10.1% CAGR over the last four years [15][16] - Adjusted EPS grew by 24.2% in Q1 2025 over Q1 2024, while tangible book value per share increased by 10.6% in the same period [16][16] - The company maintained a net interest margin (NIM) of 3.21%, with expectations for it to remain flat with some upward bias in Q2 2025 [42][42] Business Line Data and Key Metrics Changes - End-of-period loans increased by 7.3% on a quarter annualized basis, driven by new markets and recruited bankers [35][36] - Deposit growth was a highlight, with an increase of $1.6 billion in Q1 2025, following a $1.9 billion increase in the previous quarter [39][39] - The company anticipates total deposit growth of 7% to 10% for 2025, despite expecting a slowdown in Q2 due to seasonal factors [40][40] Market Data and Key Metrics Changes - The company has reduced its concentration in commercial real estate, which has impacted loan growth but has allowed for a focus on C&I loan growth [30][25] - The average years of experience for newly hired revenue producers is 18 years, contributing to high-quality loan growth [26][28] Company Strategy and Development Direction - Pinnacle's strategy focuses on continuously attracting top bankers and enabling them to consolidate their client relationships, which is seen as a sustainable growth model [18][23] - The company aims to maintain its unique work environment and culture, which has been recognized as one of the best workplaces in America [31][32] - The management emphasizes a market share takeaway strategy that is less reliant on overall economic growth [22][25] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current economic volatility but remains confident in the company's ability to grow and produce shareholder value [13][34] - The outlook for 2025 includes expectations for client balance sheet growth consistent with prior guidance, despite uncertainties in the broader economy [34][34] - The company is monitoring potential impacts from tariffs and trade wars on its portfolio, particularly in sectors like trucking and multifamily [111][114] Other Important Information - The company reported a decrease in net charge-offs to 16 basis points in Q1 2025, with expectations for charge-offs to remain around 16 to 20 basis points for the year [45][45] - BHG had a strong quarter, providing fee revenues of over $20 million, leading to an upward revision of earnings estimates for 2025 from 10% growth to 20% growth over 2024 [50][51] Q&A Session Summary Question: Did you change the baseline assumption under CECL for calculating the reserves? - The company kept the baseline unchanged but used an adverse scenario to influence qualitative assumptions [62] Question: Is the growth or higher target for BHG dependent on continued securitizations? - BHG has plenty of room through the bank channel and plans for another ABS issuance towards the end of the year [64] Question: What are the expectations for deposit growth in Q2? - April is traditionally a tough month for deposit growth, but the company believes it has advantages in deposit pricing [72] Question: How does the company view the current loan pricing environment? - The company is not overly concerned about volume but is more focused on the pricing aspect of loans [76] Question: What areas are credit officers focusing on regarding tariffs and trade wars? - Credit officers are focused on trucking, multifamily, and leveraged lending to assess potential impacts [111] Question: What is the outlook for capital ratios given the growth outlook? - The company has not set a specific floor for CET1 but aims to maintain stability in risk-based capital ratios [134]

Core Insights - Pinnacle Financial reported revenue of $462.85 million for the quarter ended March 2025, reflecting an 8.1% increase year-over-year, but fell short of the Zacks Consensus Estimate of $478.5 million by 3.27% [1] - The company's EPS was $1.90, up from $1.53 in the same quarter last year, exceeding the consensus estimate of $1.82 by 4.40% [1] Financial Performance Metrics - Net Interest Margin stood at 3.2%, matching the average estimate of three analysts [4] - Efficiency Ratio was reported at 59.5%, higher than the estimated 55.5% by three analysts [4] - Nonaccrual loans totaled $171.57 million, exceeding the average estimate of $157.20 million from two analysts [4] - Annualized net loan charge-offs to average loans were 0.2%, consistent with the average estimate of 0.2% from two analysts [4] - Average balances of total interest-earning assets were $47.68 billion, slightly above the average estimate of $47.63 billion [4] - Total nonperforming assets reached $175.23 million, surpassing the average estimate of $158.91 million from two analysts [4] - Net Interest Income was $364.43 million, close to the average estimate of $365.05 million based on three analysts [4] - Total noninterest income was reported at $98.43 million, below the average estimate of $113.42 million from three analysts [4] - Gains on mortgage loans sold, net, were $2.51 million, slightly lower than the average estimate of $2.65 million from two analysts [4] Stock Performance - Pinnacle Financial's shares have returned -12.4% over the past month, compared to a -3.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Company Performance - Pinnacle Financial reported quarterly earnings of $1.90 per share, exceeding the Zacks Consensus Estimate of $1.82 per share, and up from $1.53 per share a year ago, representing an earnings surprise of 4.40% [1] - The company posted revenues of $462.85 million for the quarter ended March 2025, which missed the Zacks Consensus Estimate by 3.27%, compared to year-ago revenues of $428.14 million [2] - Over the last four quarters, Pinnacle Financial has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Performance and Outlook - Pinnacle Financial shares have declined approximately 21.3% since the beginning of the year, while the S&P 500 has decreased by 8.8% [3] - The current consensus EPS estimate for the upcoming quarter is $1.94 on revenues of $497.13 million, and for the current fiscal year, it is $7.78 on revenues of $2.01 billion [7] Industry Context - The Zacks Industry Rank for Banks - Southeast, to which Pinnacle Financial belongs, is currently in the bottom 44% of over 250 Zacks industries, indicating potential underperformance compared to the top 50% of ranked industries [8]

Financial Performance - Pinnacle Financial Partners reported a diluted EPS of $1.77 for Q1 2025, up 12.7% from $1.57 in Q1 2024; adjusted diluted EPS was $1.90, a 24.2% increase from $1.53[1][2]. - Pre-tax income for Q1 2025 was $170,407 thousand, up from $151,275 thousand in Q1 2024, indicating a 12.7% increase[36]. - Basic earnings per common share for Q1 2025 were $1.78, compared to $1.58 in Q1 2024, marking a 12.7% increase[38]. - Diluted earnings per common share for Q1 2025 were $1.77, up from $1.57 in Q1 2024, reflecting a 12.8% increase[38]. - Net income available to common shareholders was $136,610 thousand for the quarter, compared to $120,146 thousand in the same quarter of the previous year, reflecting a 13.66% increase[28]. Asset and Loan Growth - Year-over-year loan growth was 9.0%, with total loans reaching $36.1 billion as of March 31, 2025, compared to $33.2 billion a year earlier[3][5]. - Total assets increased to $54.3 billion, reflecting a year-over-year growth of 11.0%[4]. - Total assets reached $54,254,804 thousand, representing a 3.16% increase from $52,589,449 thousand in December 2024[28]. - Total loans increased to $36,136,746 thousand in March 2025, up 1.83% from $35,485,776 thousand in December 2024[28]. - The company anticipates loan growth guidance of 8% to 11% for 2025 compared to 2024 year-end loan balances[5]. Income and Revenue - Net interest income rose to $364.4 million, a 14.6% increase from $318.0 million in Q1 2024; net interest margin improved to 3.21% from 3.04%[8][9]. - Noninterest income decreased to $98.4 million, down 10.6% year-over-year, but adjusted noninterest income increased by 12.9% to $110.9 million[9][10]. - Total revenues excluding adjustments for Q1 2025 were $475,366 thousand, compared to $416,325 thousand in Q1 2024, reflecting a 14.2% year-over-year growth[36]. - Noninterest income totaled $98,426 thousand in March 2025, down from $111,55 thousand in Q4 2024, primarily due to a decline in other noninterest income[25]. Expenses and Efficiency - Noninterest expense for Q1 2025 was $275.5 million, a 13.7% increase from $242.4 million in Q1 2024; adjusted noninterest expense rose by 17.2%[11][12]. - Salaries and employee benefits increased by 17.9% to $172.1 million, driven by headcount growth and higher incentive payouts[14]. - The efficiency ratio improved to 59.52% in March 2025, compared to 63.37% in March 2024[28]. - The efficiency ratio for Q1 2025 was 59.52%, compared to 56.61% in Q1 2024, showing a decline in efficiency[36]. Credit Quality and Allowances - The annualized net loan charge-offs to average loans ratio improved to 0.16% compared to 0.24% in the previous quarter[15]. - Nonperforming assets to total loans increased to 0.48% from 0.42% in the previous quarter[15]. - The allowance for credit losses to total loans was 1.16%, consistent with the previous quarter[15]. - Provision for credit losses decreased to $16.96 million in Q1 2025 from $29.65 million in Q4 2024, indicating improved credit quality[25]. - Nonaccrual loans increased to $171,570 thousand in March 2025, up 16.0% from $147,825 thousand in December 2024[33]. Capital and Equity - Shareholders' equity to total assets was 12.1%, a slight decrease from 12.2% as of December 31, 2024[15]. - The book value per common share increased to $81.57 from $80.46 at the end of 2024[15]. - The tangible book value per common share at the end of Q1 2025 was $57.47, up from $51.98 in Q1 2024, indicating an increase of 10.5%[38]. - Net tangible common equity rose to $4,456,749 thousand in Q1 2025, compared to $4,344,072 thousand in Q4 2024, an increase of 2.6%[41]. Employee Metrics - The number of employees (full-time equivalent) increased to 3,595 in March 2025, up from 3,565.5 in December 2024[35]. - The annualized revenues per full-time equivalent employee were $522.2 thousand, a decrease from $530.4 thousand in the previous quarter[35]. - The total assets per full-time equivalent employee increased to $15,092 thousand in March 2025, compared to $14,750 thousand in December 2024[35]. Market Position and Recognition - Pinnacle Financial is recognized as the No. 1 bank in the Nashville-Murfreesboro-Franklin MSA according to 2024 FDIC deposit data[17]. - Pinnacle Financial has been recognized as one of America's Best Banks to Work For for 12 consecutive years[17]. - The firm plans to continue expanding its operations in urban markets across the Southeast[18].

Company Overview - Pinnacle Financial (PNFP) shares increased by 10.4% to $96.34 in the last trading session, following a significant volume of trading, contrasting with a 12.4% loss over the previous four weeks [1][2] - The stock's recent surge was influenced by a broader market rally, particularly due to President Trump's announcement of a 90-day tariff pause for non-retaliating nations, which positively impacted investor sentiment [2] Earnings Expectations - Pinnacle Financial is projected to report quarterly earnings of $1.82 per share, reflecting a year-over-year increase of 19% [2] - Expected revenues for the upcoming report are $478.5 million, marking an 11.8% rise compared to the same quarter last year [2] Earnings Estimate Revisions - The consensus EPS estimate for Pinnacle Financial has been slightly revised upward over the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [4] - Monitoring the earnings estimate revisions is crucial, as they are strongly linked to near-term stock price movements [3] Industry Context - Pinnacle Financial operates within the Zacks Banks - Southeast industry, which includes other regional banks like WesBanco (WSBC) [4] - WesBanco's consensus EPS estimate has decreased by 0.4% over the past month to $0.39, representing a year-over-year decline of 30.4% [5]

Core Viewpoint - Analysts expect Pinnacle Financial (PNFP) to report quarterly earnings of $1.82 per share, reflecting a year-over-year increase of 19% and revenues of $478.5 million, up 11.8% from the previous year [1]. Earnings Estimates - Over the last 30 days, there has been a 0.1% upward revision in the consensus EPS estimate for the quarter, indicating a collective reassessment by covering analysts [2]. - Revisions to earnings estimates are significant indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3]. Key Financial Metrics - Analysts project a 'Net Interest Margin' of 3.2%, up from 3% in the same quarter last year [5]. - The 'Efficiency Ratio' is expected to be 55.5%, compared to 56.6% a year ago [5]. - 'Nonaccrual loans' are projected to reach $157.20 million, up from $108.33 million in the same quarter last year [6]. - The estimated 'Average balances - Total interest-earning assets' is $47.63 billion, compared to $43.62 billion a year ago [6]. - 'Total nonperforming assets' are expected to be $158.91 million, up from $111.09 million in the same quarter last year [7]. - 'Net Interest Income' is projected at $365.05 million, compared to $318.03 million in the same quarter last year [7]. - The consensus estimate for 'Total noninterest income' stands at $113.42 million, compared to $110.10 million in the same quarter last year [8]. Stock Performance - Over the past month, Pinnacle Financial shares have recorded returns of -12.4%, compared to the Zacks S&P 500 composite's -13.5% change [8].

Financial Assets and Risks - As of December 31, 2024, the company had $1.0 billion in bank owned life insurance (BOLI) contracts, which are illiquid long-term assets providing tax savings[217] - The company is exposed to liquidity, credit, and interest rate risks associated with BOLI investments, which could adversely affect its financial condition and results of operations[217] - The company faces substantial competition from various financial service providers, including non-banks, which may have lower operating costs and regulatory constraints[229] - Regulatory changes, such as the Community Reinvestment Act, may impose additional requirements on the company, affecting its competitive position[231] - The financial services industry is becoming more competitive due to technological advancements and consolidation, allowing non-banks to offer traditional banking products[232] - Climate change poses risks to the company's operations and customer relationships, potentially leading to market volatility and disruptions[233] - The company is facing transition risks due to changing climate conditions, which may restrict business operations and increase expenses[234] Risk Management and Compliance - The company has implemented a risk management framework to identify and manage various risks, including credit, market, and operational risks, but there is no assurance of its effectiveness[218] - Cybersecurity risks have significantly increased, particularly with the rise of mobile-payment and internet-based product offerings, which could negatively impact the company's operations and financial condition[222] - The company is subject to regulatory oversight and litigation, which could result in significant financial liabilities and reputational harm[240] - The company operates in a highly regulated industry, with potential increases in operating costs due to changes in regulations and compliance requirements[260] - Regulatory scrutiny may increase, impacting the company's operational flexibility and growth potential, particularly in relation to mergers and acquisitions[261] - Non-compliance with anti-money laundering regulations could result in fines or sanctions, restricting the company's ability to make acquisitions[269] Growth and Expansion Strategies - The company is continuously evaluating and may implement new lines of business or products, but these efforts carry substantial risks and uncertainties[236] - The company plans to expand in high-growth markets in the southern U.S. but faces risks related to management of growth and operational costs[250] - Regulatory and economic factors may adversely affect the company's growth and expansion plans, potentially allowing competitors to gain market share[253] - The company must successfully implement improvements to its information and control systems to accommodate growth, which may require additional expenditures[254] - Failure to address issues related to recent expansions could materially affect the company's financial condition and results of operations[255] - The company plans to focus on organic growth in existing markets while evaluating merger and acquisition opportunities in select southern U.S. markets[258] - The company may face risks related to future acquisitions, including maintaining loan quality amid significant loan growth and attracting sufficient deposits to fund anticipated growth[256] Financial Performance and Shareholder Considerations - The trading price of the company's capital stock may be volatile, influenced by various factors including financial performance and market conditions[270] - The ability to declare and pay dividends is limited and depends on various factors including capital levels and earnings performance[272] - Future dividends will be declared at the discretion of the board of directors and may rely on cash held and dividends received from Pinnacle Bank[273] - Federal and state regulations restrict the amount of dividends that can be declared, particularly under Basel III capital rules[274] - The company may issue additional common stock or equity securities, which could dilute existing shareholders' ownership[276] - The Series B Preferred Stock dividends are non-cumulative and discretionary, meaning if not declared, they do not accrue[285] - As of December 31, 2024, Pinnacle Financial had approximately $133.0 million in outstanding junior subordinated debentures, which must be paid before any dividends on common or preferred stock[289] - Pinnacle Financial has an aggregate of $300 million of subordinated notes outstanding, which rank senior to common and preferred stock[291] - Holders of the Series B Preferred Stock have limited voting rights unless dividends are in arrears for six periods[287] - The Series B Preferred Stock ranks junior to all indebtedness and will only receive distributions after all liabilities are satisfied in case of liquidation[280] - The company may issue additional preferred stock or securities that could negatively affect the value of existing shares[277] - Pinnacle Financial's common stock and depositary shares have lower liquidity compared to larger companies on the Nasdaq Global Select Market, with trading volumes being relatively low[294] - The market prices of Pinnacle Financial's common stock and depositary shares have experienced significant fluctuations, which may not correlate with the company's performance[296] - The company’s amended charter allows the board to issue preferred stock without shareholder approval, potentially complicating acquisition attempts[298] - Investments in Pinnacle Financial's common stock or depositary shares are not insured by the FDIC, presenting inherent risks to shareholders[299] Technology and Innovation - The company has made significant investments in technology but may require additional investments to maintain operational efficiency[242] - The use of artificial intelligence and machine learning tools may introduce new costs and cybersecurity risks, potentially affecting business results[300]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Pinnacle Financial (PNFP) - Pinnacle Financial currently holds a Momentum Style Score of B, indicating a positive outlook based on price changes and earnings estimate revisions [2] - The company has a Zacks Rank of 1 (Strong Buy), suggesting strong potential for outperformance in the market [3] Price Performance - Over the past week, PNFP shares increased by 6.85%, outperforming the Zacks Banks - Southeast industry, which rose by 5.77% [5] - In a longer timeframe, PNFP's monthly price change is 7.94%, significantly higher than the industry's 0.89% [5] - Over the past quarter, PNFP shares have risen by 17.81%, and over the last year, they have gained 37.42%, compared to the S&P 500's increases of 5.33% and 26.85%, respectively [6] Trading Volume - The average 20-day trading volume for PNFP is 392,626 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the last two months, two earnings estimates for PNFP have been revised upwards, while none have been lowered, leading to an increase in the consensus estimate from $7.49 to $7.60 [9] - For the next fiscal year, three estimates have moved upwards with no downward revisions, indicating a positive trend in earnings expectations [9] Conclusion - Considering the positive price performance, trading volume, and favorable earnings outlook, PNFP is positioned as a 1 (Strong Buy) stock with a Momentum Score of B, making it a strong candidate for near-term investment [11]