Analysts on Wall Street project that Pinnacle Financial (PNFP) will announce quarterly earnings of $1.92 per share in its forthcoming report, representing an increase of 17.8% year over year. Revenues are projected to reach $492.81 million, increasing 34.4% from the same quarter last year.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted downward by 0.1% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections durin ...

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]

Financial Performance Highlights - Total revenues increased, with adjusted figures showing 14.2% growth[16] - Adjusted Fully Diluted EPS (FD EPS) increased by 24.2%[16] - Tangible book value per share grew by 10.6%[147] Loan and Deposit Growth - Net loan growth showed strategic expansion of $756 million[19] - Total deposits increased, with strategic expansion contributing $1.1 billion[110] - Average loans increased to $36042 million[28] - Average deposits increased to $43019 million[35] Asset Quality - Classified Asset Ratio decreased to 4.4%[105] - ACL decreased to 1.16% of total loans[52] - Net charge-offs are estimated to be between 0.16% and 0.20% of average loans for 2025[58] BHG Financial Overview - BHG reported Q1 earnings of $44.1 million, the highest since Q3 2023[53] - BHG's bank auction spreads finished at 9.5% for 1Q25[156] - Over 80% of BHG's Q1 2025 originations were to FICO scores of 700+[165] Forward Outlook - EOP loan growth for 2025 is estimated to be 8-11% over 2024[58] - EOP deposit growth for 2025 is estimated to be 7-10% over 2024[58] - Net interest income growth for 2025 is estimated to be 11-13% year over year[58]

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]