Pinnacle Financial Partners(US:PNFP)2021-01-20 19:00Financial Data and Key Metrics Changes - The fourth quarter was characterized by strong performance metrics, including a 9% year-over-year increase in total revenues and a 28% increase in fully diluted EPS compared to 2019 [8][44] - Adjusted PPNR for 2020 rose nearly 9.4% over 2019, with PPNR per share up 11.4% [8] - Asset quality remained robust, with NPAs at just 38 basis points and annualized net charge-offs at 19 basis points for the quarter [10][44] Business Line Data and Key Metrics Changes - Loan growth was reported at 13.3% year-over-year, with a nearly 8% annualized increase in the fourth quarter excluding PPP loans [9][13] - Fee income for the quarter exceeded $83 million, with a remarkable 40% growth in fee revenues for 2020 [21] - Non-interest bearing deposits grew significantly, ending at $7.4 billion, a 54% increase from the previous year [17] Market Data and Key Metrics Changes - The company experienced a significant increase in commercial check accounts, up almost 12% since year-end [17] - The average loan to average deposits ratio was at its lowest level, 83%, indicating a potential for future loan growth [17] Company Strategy and Development Direction - The company aims to focus on organic growth through hiring, with a plan to continue expanding its workforce in attractive markets [52] - There is a strong emphasis on maintaining asset quality and managing credit risk, particularly in light of the ongoing pandemic [35][41] - The company is optimistic about capitalizing on market share opportunities as the economy reopens post-pandemic [43][45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the economic recovery, supported by the rollout of COVID-19 vaccines and new stimulus measures [32][35] - The company anticipates challenges in the first half of 2021 but remains confident in its ability to navigate the environment due to strong client relationships and proactive measures taken during the pandemic [35][43] Other Important Information - The Board approved a $125 million buyback program, with plans to consider deploying those funds soon [25] - The company has increased its quarterly dividend, reflecting confidence in its financial position and future growth [25] Q&A Session All Questions and Answers Question: Follow-up on hiring and M&A interest - Management indicated a preference for organic growth through hiring rather than pursuing M&A, although they remain open to evaluating opportunities if they arise [51][53] Question: Changes in strategy post-pandemic - Management expects modest changes in strategy, focusing on geographic expansion and technology investments to enhance client service [54][55] Question: Loan growth and new hires - Management expressed optimism for increased hiring activity in 2021, contingent on the pace of vaccine distribution and economic recovery [58][59] Question: Guidance on expenses and reserves - Management clarified that expense guidance for 2021 is based on total expenses of $577 million, with no planned reserve releases anticipated for BHG [65][67] Question: Fee income outlook - Management expects strong fee income growth from non-mortgage units, projecting mid-single-digit growth overall [69] Question: Core deposit growth and future expectations - Management discussed the structural changes made to enhance core deposit growth and anticipates a slowdown in deposit growth moving forward [71][73]