Pinnacle Financial Partners(US:PNFP)2025-11-04 21:16Financial Performance - Diluted net income per common share for Q3 2025 was $2.19, up from $1.86 in Q3 2024, representing a 17.7% increase[149] - Net income available to common shareholders for Q3 2025 was $169.3 million, an 18.5% increase from $142.9 million in Q3 2024[173] - Basic net income per common share rose to $2.20 in Q3 2025, a 17.6% increase from $1.87 in Q3 2024[173] - Net interest income for Q3 2025 was $396.9 million, a 12.9% increase from $351.5 million in Q3 2024[157] - Net interest income for the nine months ended September 30, 2025, reached $1.1 billion, up 13.9% from $1.0 billion in the same period of 2024[174] - Noninterest income for Q3 2025 was $147.9 million, a 28.4% increase from $115.2 million in Q3 2024[173] - Noninterest income increased by $32.7 million, or 28.4%, in Q3 2025 compared to Q3 2024, largely due to a significant rise in income from equity method investments[159] Loans and Deposits - Total loans increased to $37.9 billion as of September 30, 2025, compared to $35.5 billion at December 31, 2024, reflecting a growth of 6.8%[149] - Total deposits rose to $45.7 billion at September 30, 2025, up from $42.8 billion at December 31, 2024, indicating a 6.8% increase[149] - Loans increased by $2.4 billion, or 6.9%, during the nine months ended September 30, 2025 compared to December 31, 2024[165] - Total deposits grew by 6.7% to $45.7 billion as of September 30, 2025, up from $42.8 billion as of September 30, 2024[173] - Noninterest-bearing deposits increased by $782.5 million, or 9.6%, to $9.0 billion at September 30, 2025[165] - Total loans outstanding increased to $37.9 billion as of September 30, 2025, up from $35.5 billion at December 31, 2024[217] - Total deposits rose by $2.9 billion to $45.7 billion between December 31, 2024, and September 30, 2025[217] Credit Losses and Allowance - Provision for credit losses was $31.9 million for Q3 2025, compared to $26.3 million in Q3 2024, reflecting a 21.3% increase[158] - The allowance for credit losses was $434.5 million at September 30, 2025, with a ratio of 1.15% to total loans, down from 1.17% at December 31, 2024[166] - Provision for credit losses increased by 21.5% to $31.9 million in Q3 2025 compared to $26.3 million in Q3 2024[173] - Provision for credit losses was $73.1 million for the nine months ended September 30, 2025, down from $90.9 million in the same period of 2024, reflecting a decrease of 19.5%[187] - The allowance for credit losses (ACL) was approximately $434,500 thousand as of September 30, 2025, representing 1.15% of total loans[227] Merger and Corporate Actions - The company entered into a merger agreement with Synovus, with Pinnacle Financial and Synovus merging into a newly formed entity, Newco[150] - The merger agreement includes a termination fee of $425 million payable under certain circumstances[156] - On July 24, 2025, the company entered into a Merger Agreement with Synovus, with Newco surviving the merger[169] - Merger-related expenses amounted to $7.7 million for the three months ended September 30, 2025, associated with the proposed merger with Synovus[213] Expenses and Efficiency - Noninterest expense increased by $43.8 million, or 16.9%, for the three months ended September 30, 2025 compared to the same period in 2024[161] - The efficiency ratio was 55.6% for the three months ended September 30, 2025, unchanged from the same period in 2024[162] - The efficiency ratio improved to 55.6% for the three months and 57.2% for the nine months ended September 30, 2025, compared to 55.6% and 61.3% for the same periods in 2024[215] Shareholder and Capital Information - Shareholders' equity increased to $6.9 billion as of September 30, 2025, up from $6.4 billion at December 31, 2024[237] - The company has approximately $246.3 million in cash available to support capital needs as of September 30, 2025[239] - The board authorized a share repurchase program for up to $125.0 million, effective through March 31, 2026[240] - The company’s capital ratios exceeded regulatory minimum requirements, indicating a well-capitalized status[237] Asset Management and Investments - The investment securities portfolio increased to $9.1 billion at September 30, 2025, up from $8.4 billion at December 31, 2024, with a tax equivalent yield of 4.41%[229] - The effective duration of the investment portfolio was 2.30% as of September 30, 2025, compared to 2.11% at December 31, 2024[229] - Securities purchased with an agreement to resell amounted to $83.1 million at September 30, 2025, compared to $66.4 million at December 31, 2024[231] Risk Management and Compliance - The bank aims to maintain a non-owner occupied commercial real estate, multifamily, and construction and land development loans to total risk-based capital ratio of less than 225%[219] - The bank's CECL models utilize macroeconomic factors such as the national unemployment rate and GDP to estimate future credit losses, indicating a data-driven approach to risk assessment[225] - The liquidity coverage ratio was compliant as of September 30, 2025, ensuring sufficient cash flows to meet obligations[260] - The company had an estimated $3.4 billion in additional borrowing capacity with the Federal Home Loan Bank (FHLB) as of September 30, 2025[263] Operational Highlights - Service charges on deposit accounts increased by $2.1 million, or 12.8%, in Q3 2025 compared to Q3 2024[160] - Income from wealth management services increased by 29.5% for the three months ended September 30, 2025, compared to the same period in 2024, driven by hiring more revenue producers[191] - Interchange revenues increased by 3.6% during the nine months ended September 30, 2025, primarily due to the volume of commercial credit card usage[203]